Kaushal Roller and Flour Mills Pvt. Ltd., Una V. Addl. CIT, Palampur

ITA 1151/CHANDI/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7408 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 20-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: R R THAKUR
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice
• Section: 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 1151/CHD/2010 ASSESSMENT YEAR: 2006-07 KAUSHAL ROLLER &FLOUR MILLS V ADDL.CIT, RANGE PVT. LTD., INDL. AREA, PALAMPUR. TAHLIWAL, UNA. PAN: AAACK-6899E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.R.THAKUR DEPARTMENT BY: SMT. JAISHREE SHARMA DATE OF HEARING : 17.01.2012 DATE OF PRONOUNCEMENT : 25.01.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 14.07.2010 PASSED BY THE LD . CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'TH E ACT'). 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN NOT DECIDING T HE GROUNDS OF APPEAL OF THE APPELLANT AT SR.NO.1 WHEREIN THE GROUND WAS RELATING TO WRONGLY COMPUTING THE INCOME U/S 144 BY INVOKING THE SUB- SECTION 3 OF SECTION 145 WITHOUT POINTING OUT MISTAKE IN THE BOOKS OF ACCOUNTS. THE ADDITION ON THIS ACCOUNT MAY KINDLY BE DELETED. 2 2. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE WRONGLY ESTIMATED TAXABLE SALE OF RS.1,00,00,000/- OUT OF TAX FREE SALE WITHOUT GOING THROUGH THE FACT S AND CIRCUMSTANCES OF THE CASE. THE ESTIMATE OF THE LD. AO IS NOT BASED ON ANY CIRCUMSTANCES AND MAY BE DELETED. 3. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.8,25,945/- IN THE CASE OF THE APPELL ANT BY APPLYING A GP RATE OF 8.5% WHICH MAY KINDLY BE DELETED. 4. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.15,700/- UNDER THE HEAD OF CHARITY AND DONATION. THE ADDITION MAY KINDLY BE DELETED. 5. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.20,000/- OF PENALTY WHICH WAS PAID T O THE STATE GOVT.OF PUNJAB FOR THE BENEFIT OF THE CON CERN AND MAY KINDLY BE DELETED. 6. THAT THE CIT(A) HAS ERRED TO CONFIRM THE DIFFERENCE OF DEPRECIATION WHICH WAS WRONGLY CALCULATED BY THE LD AO. THE EXCESS DIFFERENCE OF DEPRECIATION ADDED IN THE INCOME OF THE APPELLANT MAY KINDLY BE DELETED. 7. ANY OTHER GROUND WHICH MAY BE TAKEN AT THE TIME OF HEARING WITH THE APPROVAL OF THE HON'BLE ITAT. 2. GROUND NOS. 6 & 7 ARE GENERAL IN NATURE AND NEED NO SEPARATE ADJUDICATION. 3. GROUND NO.1 RAISED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED, AS STATED BY THE LD. 'AR' IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS. 4. IN GROUND NO. 2, LD. 'AR' CONTENDED THAT THE CIT (A) ERRED IN CONFIRMING THE ESTIMATED TAXABLE SALE OF R S.1 CRORE OUT OF TAX FREE SALE WITHOUT GOING THROUGH THE FACT S AND CIRCUMSTANCES OF THE CASE. CONSEQUENTLY, IT WAS PR AYED THAT 3 THE SAID ADDITION MAY BE DELETED. LD. 'AR' STATED THAT THE CIT(A) HAS NOT CORRECTLY WORKED OUT THE DETAILS OF CLOSING STOCK AS ON 31.3.2005. CONSEQUENTLY, THE CONCLUSIO N DRAWN BY THE REVENUE AUTHORITY IS NOT BASED ON CORRECT FA CTUAL POSITION. LD. 'DR' PLACED RELIANCE ON THE ORDER OF THE LOWER AUTHORITIES. LD. 'AR' FILED THE WORKING OF THE TRA DING ACCOUNT, WHICH IS REPRODUCED HEREUNDER : TRADING ACCOUNT WHEAT BRAN PERIOD 2005-06 DR CR QTL. AMOUNT QTL. AMOUNT TO 2827.71 1255814.28 BY 35 150.11 15610515.34 OPENING SALES STOCK PURCHASES 2620.07 1163599.28 BRAN MILLING GAIN 30630.00 13603089.30 & PRODUCTION WHEAT BRAN BY SALES 0 RETURN RETURN CLOSING 927.67 411987.52 BALANCE TOTAL 36077.78 16022502.86 TOTAL 360 77.78 16022502.86 5. THE BRIEF FACTS OF THE CASE ARE THAT THE AO MADE AN ADDITION OF RS.1,50,000/- BY REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE AND APPLYING GP RATE AT 8.5% AT RS. 1 CRORE, ESTIMATED SALES STATING THAT THE COMPANY HAS TRANSF ERRED THE SALES FROM TAXABLE ITEM TO TAX FREE ITEM. THE LD. CIT(A), AFTER APPRECIATING SUBMISSION FILED BEFORE HER, UPH ELD THE FINDING OF THE AO BUT RESTRICTED THE SALES AT RS.97 ,17,229/- AFTER GIVING CREDIT FOR OPENING STOCK OF BRAWN AT RS.2,82,771/-. THE CONTENTION OF THE LD. 'AR' IS T HAT THE CIT(A) HAS NOT CONSIDERED OPENING STOCK OF BRAWN. PERUSAL OF THE TRADING ACCOUNT REVEALS THAT THE OPENING STO CK, AS MENTIONED BY THE CIT(A) REPRESENTS THE QUANTUM (QUI NTALS OF 4 2827.71) WHEREAS THE CIT(A) HAS TAKEN THE SAME IN V ALUE AS RS.2,82,771/-. THE LD. 'AR' HAS WORKED OUT THE OPE NING STOCK OF BRAN AT RS.12,55,814/-. IN VIEW OF THIS FA CTUAL DISCREPANCY, AS TRANSPIRED IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS BEFORE THE BENCH, IT IS CONSIDERED FAIR AND REASONABLE TO MEET THE ENDS OF NATURAL JUSTICE, TO RESTORE THIS ISSUE TO THE FILE OF THE CIT(A) FOR THE PURPOS E OF FRESH ADJUDICATION IN THE LIGHT OF THE RELEVANT MATERIAL TO BE PRODUCED BY THE ASSESSEE AND IN ACCORDANCE WITH REL EVANT PROVISIONS OF THE ACT. THE ASSESSEE IS DIRECTED TO RENDER NECESSARY COOPERATION TO THE LD. CIT(A), WHO WOULD GIVE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ISS UES RAISED BY ASSESSEE IN GROUND NOS. 2 & 3 STANDS DISP OSED OF. 6. IN GROUND NO.4, ASSESSEE CONTENDED THAT CIT(A) E RRED IN MAKING ADDITION OF RS.15,700/- CLAIMED UNDER THE HEAD CHARITY AND DONATIONS. LD. 'AR' VIDE GROUND NO.5 ALSO CONTENDED THAT THE CIT(A) HAS ERRED IN CONFIRMING T HE ADDITION OF RS.20,000/- OF PENALTY WHICH WAS PAID T O THE STATE GOVERNMENT OF PUNJAB FOR BENEFIT OF THE CONCE RN. 7. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS AND FOUND THAT CIT(A) HAS VALIDLY UPHELD THE SAID ADDIT IONS ON THE GROUND THAT THE IMPUGNED PENALTY ATTRIBUTED TO THE INFRACTION OF LAW BY THE ASSESSEE. THEREFORE, NO S UCH EXPENDITURE INCURRED BY THE ASSESSEE, IN THE FORM O F PENALTY ON THE GROUND OF INFRACTION OF THE LAW IS ADMISSIBL E EXPENDITURE UNDER THE SCHEME OF INCOME-TAX ACT. SIM ILARLY, THE ASSESSEE HAS FAILED TO ADDUCE ANY DOCUMENTARY 5 EVIDENCE, JUSTIFYING THE DONATION CLAIMED BY HIM. ACCORDINGLY, CIT(A) UPHELD THE SAID ADDITION. NO S UCH EVIDENCE WAS FILED BY THE ASSESSEE, EVEN BEFORE THE BENCH AND ACCORDINGLY, WE UPHOLD THE ADDITION MADE BY THE CIT(A). 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES, ON THE TERMS, AS INDICATED AB OVE. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JAN.,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25 TH JAN.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH