Sukhraman Kaur, Doraha V. ITO, Khanna

ITA 116/CHANDI/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8436 (ITAT-CHANDIGARH)
• Duration Of Justice: 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 19-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Depreciation; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 116/CHD/2016 (ASSESSMENT YEAR : 2008-09) SUKHRAMAN KAUR VS. THE INCOME TAX OFFICER, PROP.M/S LITTLE BEE PRODUCTS, WARD IV, VILLAGE MALHIPUR G.T. ROAD, KHANNA. DORAHA. PAN: ALOPK2746E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY JAIN RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 03.03.2016 DATE OF PRONOUNCEMENT : 03 .03.2016 O R D E R THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, LUDHIANA DATED 9.12.2015 FOR ASSESSMEN T YEAR 2008-09. 2. I HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 3. THE GROUND NO.1 IS GENERAL AND NEEDS NO ADJUDICATION. 4. ON GROUND NO.2, THE ASSESSEE CHALLENGED THE ADDITION OF RS.20,000/- OUT OF EXHIBITION EXPENSES. THE 2 ASSESSEE HAD CLAIMED EXPENSES OF RS.5,47,092/- UNDE R THE HEAD EXHIBITION EXPENSES. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD DEBITED EXPENSES OF RS.66,498/- ON 31.1.2008 IN CASH. THE ASSESSEE EXPLAINED THAT THE SAME WERE SPENT FOR DELHI EXHIBITION BUT DID NOT GIVE AN Y DOCUMENTARY EVIDENCE REGARDING IT. THEREFORE, IN T HE ABSENCE OF ANY DOCUMENTARY EVIDENCE, AN AMOUNT OF RS.66,498 /- WAS ADDED TO THE INCOME OF THE ASSESSEE. 5. THE ASSESSEE SUBMITTED BEFORE THE LEARNED CIT (APPEALS) THAT THE ASSESSING OFFICER HAS FAILED TO APPRECIATE THE FACT THAT IT IS NOT POSSIBLE TO GET EACH AND EV ERY VOUCHER OF EXPENSES INCURRED DURING THE COURSE OF EXHIBITIO N. THE ASSESSING OFFICER DID NOT DISPUTE THE EXPENSES INCU RRED BY THE ASSESSEE AND MADE THE ADDITION SIMPLY ON THE BASIS OF NON- AVAILABILITY OF VOUCHERS. THE LEARNED CIT (APPEALS ) NOTED THAT NO SPECIFIC DETAILS OF VOUCHERS, WHICH WERE NOT PRO DUCED BY THE ASSESSEE HAVE BEEN MENTIONED. THEREFORE, IT AP PEARS TO BE AN ADDITION ON ADHOC BASIS AND ACCORDINGLY, RESTRIC TED THE ADDITION TO RS.20,000/-. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, I AM N OT INCLINED TO INTERFERE WITH THE ORDER OF THE LEARNED CIT (APPEALS). THE ASSESSEE HAS SPECIFICALLY STATED BE FORE THE LEARNED CIT (APPEALS) THAT IT IS NOT POSSIBLE TO GE T EACH AND EVERY VOUCHER OF EXPENSES INCURRED DURING THE COURS E OF EXHIBITION. HOWEVER, THE LEARNED CIT (APPEALS) HAS ALREADY 3 GRANTED SUFFICIENT RELIEF TO THE ASSESSEE. THEREFO RE, IN THE ABSENCE OF PRODUCTION OF COMPLETE VOUCHERS OF EXPEN SES, THE ADDITION WAS RIGHTLY MADE OF RS.20,000/-. THIS GRO UND OF APPEAL RAISED BY THE ASSESSEE IS, THEREFORE, DISMIS SED. 7. ON GROUND NO.3, THE ASSESSEE CHALLENGED AN ADDI TION OF RS.30,000/- OUT OF TELEPHONE AND PETROL EXPENSES . THE ASSESSEE HAD CLAIMED EXPENSES OF RS.96,032/- AND RS.49,418/- ON ACCOUNT OF TELEPHONE AND PETROL EXPE NSES RESPECTIVELY. THE ASSESSING OFFICER WAS OF THE VIE W THAT PERSONAL USE OF TELEPHONE CANNOT BE RULED OUT AND ACCORDINGLY, DISALLOWED RS.30,000/-. 8. IT WAS SUBMITTED BEFORE THE LEARNED CIT (APPEAL S) THAT NO MATERIAL WAS BROUGHT ON RECORD TO POINT THA T SPECIFIC VOUCHERS WERE NOT PRODUCED. THE ADDITION HAS BEEN MADE ON ADHOC BASIS. HOWEVER, THE LEARNED CIT (APPEALS) FO UND THAT THE ASSESSEE HAS NOT MAINTAINED ANY CALL DETAILS/LO G BOOK, ETC. THEREFORE, PERSONAL USE OF THESE ITEMS CANNOT BE RULED OUT AND ACCORDINGLY, DISMISSED THIS GROUND OF APPEA L OF THE ASSESSEE. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS, I AM O F THE VIEW THAT THE ADDITION IS EXCESSIVE IN NATURE. THE NATURE OF BUSINESS OF THE ASSESSEE IS MANUFACTURING OF POTATO CHIPS AND ASSESSEE FILED THE RETURN OF INCOME AT RS.1,61,877/ -. IT IS ALSO ADMITTED FACT THAT THE ASSESSEE HAS NOT MAINTA INED ANY DETAILS OF THESE EXPENSES. THEREFORE, PERSONAL US AGE OF THESE 4 ITEMS CANNOT BE RULED OUT. HOWEVER, CONSIDERING TH E NATURE OF THE BUSINESS OF THE ASSESSEE AND RETURN OF INCOM E SO FILED, I REDUCE THE ADDITION TO RS.10,000/- AS AGAINST THE ADDITION OF RS.30,000/-. THIS GROUND OF APPEAL RAISED BY THE A SSESSEE IS PARTLY ALLOWED. 8. ON GROUND NO.4, THE ASSESSEE CHALLENGED THE ADDITION OF RS.60,000/- ON ACCOUNT OF HOUSEHOLD EXP ENSES. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD W ITHDRAWN RS.1,15,592/- FOR HOUSEHOLD PURPOSES. THE ASSESSIN G OFFICER NOTED THAT THE FAMILY OF THE ASSESSEE CONSISTS OF S ELF WITH HUSBAND IN A JOINT FAMILY AND HOUSEHOLD EXPENSES WE RE CONSIDERED TO BE VERY LOW. THEREFORE, AN AMOUNT OF RS.60,000/- WAS ADDED. IT WAS SUBMITTED BEFORE TH E LEARNED CIT (APPEALS) THAT THE ASSESSEE IS LIVING IN A JOIN T FAMILY AND ALL FAMILY MEMBERS ALSO CONTRIBUTED FOR HOUSEHOLD E XPENSES. THE LEARNED CIT (APPEALS), HOWEVER, DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE BECAUSE NO DETAILS OF FAMILY CONTRIBUTION HAVE BEEN FILED. 9. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, I AM OF THE VIEW THAT ADDITION IS STILL ON EXCESSIVE SIDE. EVEN IF NO DETAILS OF FAMILY CONTRIBUTION IS FILED, BUT IT ADM ITTED FACT THAT THE ASSESSEE IS LIVING IN JOINT FAMILY AND OTHER FA MILY MEMBERS WOULD ALSO CONTRIBUTE FOR HOUSEHOLD EXPENSES. CONS IDERING THE NATURE OF THE BUSINESS OF THE ASSESSEE AND RETU RN OF INCOME FILED AT VERY LOW AMOUNT, THE ADDITION IS RESTRICTED TO 5 RS.30,000/- AS AGAINST RS.60,000/-. THIS GROUND IS, THEREFORE, PARTLY ALLOWED. 10. ON GROUND NO.5, THE ASSESSEE CHALLENGED THE OR DER OF THE LEARNED CIT (APPEALS) IN NOT ALLOWING BENEFI T OF UNABSORBED LOSSES OF EARLIER YEARS WITHOUT APPRECIA TING THE FACT THAT THE ASSESSEE IS ENTITLED TO SET OFF OF UN ABSORBED BUSINESS LOSSES OF THE EARLIER YEARS, IRRESPECTIVE OF THE FACT THAT WHETHER THE INCOME-TAX RETURN FOR THE CURRENT RELEVANT ASSESSMENT YEAR HAVE BEEN FILED OR NOT. 11. THE ASSESSEE RAISED ADDITIONAL GROUND OF APPEA L ON WHICH REMAND REPORT FROM THE ASSESSING OFFICER WAS CALLED FOR. THE ASSESSING OFFICER SUBMITTED THAT THE DUE DATE OF FILING OF THE RETURN FOR ASSESSMENT YEAR UNDER APP EAL WAS 30.9.2008 BUT THE ASSESSEE FILED RETURN BELATEDLY O N 18.2.2009. THEREFORE, THE BENEFIT OF CARRY FORWARD OF LOSSES CANNOT BE ALLOWED TO THE ASSESSEE. THE ASSESSEE IN FURTHER SUBMISSION SUBMITTED THAT THE ASSESSEE IS ENTITLED TO UNABSORBED LOSSES OF THE EARLIER YEARS AND RELIED O N THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. M/S RAMCO INTERNATIONAL DHOGRI, 33 2 ITR 306. THE REVENUE ALSO RAISED FURTHER ARGUMENT THAT SINCE NO CLAIM WAS RAISED IN THE REVISED RETURN, THEREFORE, THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GOETZE (IND IA) LIMITED VS. CIT, 284 ITR 323 (SC) IS APPLICABLE. THE LEARN ED CIT (APPEALS) FOUND THAT THE ASSESSEE FILED RETURN OF INCOME LATE 6 AND ALSO FAILED TO CLAIM SET OFF OF LOSSES IN THE R ETURN . THE DECISION RELIED ON BY THE ASSESSEE WAS FOUND TO BE DISTINGUISHABLE BECAUSE IN THAT CASE, IN THE AUDIT REPORT, THE CLAIM WAS ELIGIBLE TO BE GIVEN TO THE ASSESSEE. HO WEVER, IN THE INSTANT CASE, THE ASSESSEE FILED THE RETURN LATE A ND HAS NOT CLAIMED ANY CARRY FORWARD OF THE LOSSES. THEREFORE , THIS GROUND OF APPEAL WAS DISMISSED FOLLOWING THE JUDGME NT OF HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA ) LIMITED (SUPRA). 12. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, I A M OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION A T THE LEVEL OF THE LEARNED CIT (APPEALS). THE HON'BLE DELHI HI GH COURT IN THE CASE OF CIT VS. JAI PARABOLIC SPRINGS LTD., 30 6 ITR 42, CONSIDERING THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF GOETZE (INDIA) LIMITED (SUPRA), HELD THAT THERE WAS NO PROHIBITION ON THE POWERS OF THE TRIBUNAL TO ENT ERTAIN AN ADDITIONAL GROUND, WHICH ACCORDING TO THE TRIBUNAL, AROSE IN THE MATTER AND FOR THE JUST DECISION OF THE CASE. SINCE THE ISSUE OF CARRY FORWARD OF UNABSORBED LOSSES OF THE EARLIER YEARS WAS RAISED BEFORE THE LEARNED CIT (APPEALS) B EING AN APPELLATE AUTHORITY, THEREFORE, THE LEARNED CIT (AP PEALS) SHOULD NOT HAVE REJECTED THE CLAIM OF THE ASSESSEE MERELY BECAUSE THE ASSESSEE FAILED TO CLAIM SET OFF OF LOS SES IN THE RETURN OF INCOME. THUS, THE ORDER OF THE LEARNED C IT (APPEALS) CANNOT BE SUSTAINED IN LAW. THE LEARNED COUNSEL FO R THE ASSESSEE ALSO FILED ASSESSMENT ORDER FOR PRECEDING ASSESSMENT 7 YEAR 2007-08 DATED 30.12.2009, IN WHICH THE ASSESSI NG OFFICER AT THE END OF THE ASSESSMENT ORDER NOTED TH AT BALANCE NET LOSS TO BE CARRIED FORWARD ON ACCOUNT OF DEPREC IATION OF RS.37,55,835/-. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CAS E OF CIT VS. HARYANA HOTELS LTD., 276 ITR 521 (P&H) HELD AS UNDER: HELD, (I) THAT THE ASSESSEE WAS ENTITLED TO GET U NABSORBED DEPRECIATION OF EARLIER YEARS 1984-85 AND 1985-86 SET OFF IN 1987-88 EVEN IF NO VALID RETURN FOR THE ASSESSMENT YEAR 1986-87 HAD BEEN FILED BY T HE ASSESSEE. (II) THAT IT WAS AN ADMITTED FACT THAT NO VALID RE TURN FOR THE ASSESSMENT YEAR 1986-87 HAD BEEN MADE BY THE ASSESS EE AND ACCORDINGLY NO ASSESSMENT COULD BE MADE AND THE BUSINESS LOSSES COULD NOT BE NOTIFIED TO THE ASSESSEE. THE ASSESSEE COULD NOT BE ALLOWED TO CARRY FORWARD AND SET OFF BUSINESS LOSS DURING THE ASSESSMENT YEAR 1987-8 8. 13. THE FINDINGS OF THE LEARNED CIT (APPEALS) AND GROUND OF APPEAL RAISED BY THE ASSESSEE SHOWS THAT THE ASS ESSEE CLAIMED SET OFF OF UNABSORBED LOSSES. SOMETHING DI FFERENT IS MENTIONED IN THE ASSESSMENT ORDER OF PRECEDING ASSE SSMENT YEAR 2007-08. THE CARRY FORWARD OF LOSS OR DEPRECI ATION IS NOTIFIED IN ASSESSMENT YEAR 2007-08, THEREFORE, IT IS TO BE SEEN WHETHER LATE RETURN FOR ASSESSMENT YEAR 2008- 09 HAS ANY IMPACT ON CARRY FORWARD OF LOSS/DEPRECIATION. THIS FACT HAS BEEN LOOKED INTO BY THE LEARNED CIT (APPEALS). THEREFORE, IT ALSO REQUIRES VERIFICATION OF FACT WHETHER IT WA S BROUGHT FORWARDED LOSSES OR BROUGHT FORWARD DEPRECIATION. IN VIEW OF THE ABOVE, I SET ASIDE THE ORDER OF THE LEARNED CIT (APPEALS) AND RESTORE THIS ISSUE TO THE FILE OF THE LEARNED C IT (APPEALS) 8 WITH DIRECTION TO REDECIDE THIS ISSUE ON MERITS STR ICTLY IN ACCORDANCE WITH LAW BY VERIFYING THE FACTUAL FACTS FROM THE RECORD AND SHALL ALSO TAKE INTO CONSIDERATION THE D ECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF HARYANA HOTELS LTD. (SUPRA). THE LEARNED CIT (APPE ALS) SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. THIS GROUND OF APPEAL RAISED BY THE ASSE SSEE IS ALLOWED FOR STATISTICAL PURPOSES. 14. NO OTHER POINT IS ARGUED OR PRESSED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 3 RD MARCH, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 9