Vardhman Chemtech Limited, Chandigarh V. Addl. CIT, Chandigarh

ITA 1230/CHANDI/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90186 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 02-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 26-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Depreciation; Opportunity of being heard; Additional evidence; Reasonable cause; Agreed addition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 1230/CHD/2012 ASSESSMENT YEAR: 2009-10 M/S VARDHMAN CHEMTECH LTD., VS THE ADDL.CIT, SCO 350-352, 3 RD FLOOR, RANGE-1, SECTOR 34-A, CHANDIGARH. CHANDIGARH. PAN: AABCV3290P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIL BATRA RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 02.06.2015 DATE OF PRONOUNCEMENT : 04.06.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS) CHANDIGARH DATED 25.09.2012 FOR ASSESS MENT YEAR 2009-10. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSI DERED THE MATERIAL AVAILABLE ON RECORD. EARLIER APPEAL OF TH E ASSESSEE WAS DISMISSED FOR DEFAULT VIDE ORDER DATED 07.11.2013. THE ASSESSEE EXPLAINED THE REASONABLE CAUSE FOR FAILURE TO APPEA R ON THE DATE OF HEARING, THEREFORE MISCELLANEOUS APPLICATION OF THE ASSESSEE WAS ALLOWED VIDE ORDER DATED 12.12.2014 AND APPEAL OF THE ASSESSEE WAS RESTORED. 2 3. THE GROUND NO. 1 IS GENERAL AND NEEDS NO ADJUDIC ATION. 4. ON GROUND NO. 2, ASSESSEE CHALLENGED THE DISALLO WANCE OF EXPENDITURE OF RS. 30,24,633/- FOR NON DEDUCTION OF TAX AT SOURCE UNDER SECTION 40(A)(IA) OF THE INCOME TAX AC T. ON GROUND NO. 3, ASSESSEE CHALLENGED THE ADDITION OF RS. 2,51 ,002/- ON ACCOUNT OF UNVOUCHED EXPENSES AND ON GROUND NO. 4 A SSESSEE CHALLENGED THE ADDITION OF RS. 3,57,814/- ON ACCOUN T OF CREDIT BALANCE FROM M/S DAURALA SUGARS AND M/S SOLVOCHEM. 5. BRIEFLY THE FACTS OF ALL THE ABOVE GROUNDS ARE T HAT ASSESSING OFFICER NOTICED THAT ASSESSEE HAS NOT DEDUCTED TAX ON INTEREST PAYMENT OF RS.30,24,633/- TO M/S GLOBAL TRADE PVT. LTD. THE ASSESSING OFFICER DISALLOWED THE AMOUNT. THE ASSES SEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS). T HE LD. CIT(APPEALS) ON GOING THROUGH THE RECORD OF THE CAS E FOUND THAT COUNSEL FOR ASSESSEE HAD OFFERED THE IMPUGNED AMOUN T OF RS. 30,24,633/- FOR TAXATION VIDE HIS LETTER DATED 08.1 2.2011 TO THE ASSESSING OFFICER. SINCE IT WAS AN AGREED ADDITION , LD. CIT(APPEALS) DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 6. THE LD. CIT(APPEALS) WITH REGARD TO ADDITION OF RS. 2,51,002/- FOUND THAT ASSESSING OFFICER MADE THE AD DITION BECAUSE OF THE UNVOUCHED EXPENSES AND ASSESSEE AGRE ED FOR THE ADDITION. THE LD. CIT(APPEALS) FOUND THAT LD. COUN SEL FOR THE ASSESSEE VIDE LETTER DATED 08.12.2011 BEFORE ASSESS ING OFFICER ALSO AGREED TO THE ABOVE ADDITION. THEREFORE, IT WA S AN AGREED ADDITION, AND THE APPEAL OF THE ASSESSEE WAS DISMIS SED. 3 7. THE LD. CIT(APPEALS) FURTHER CONSIDERED DISALLOW ANCE OF RS. 3,57,814/-. THE ASSESSING OFFICER ON EXAMINING THE RECORD ASKED THE ASSESSEE TO PRODUCE COPY OF ACCOUNT AND C ONFIRMATION FROM SUNDRY CREDITOR DAURALA SUGAR WORKS AMOUNTING TO RS. 3,44,883/-. FURTHER, IT WAS NOTICED THAT THERE IS A DIFFERENCE OF RS. 12,931/- IN THE ACCOUNT OF ONE OF THE SUNDRY CR EDITOR NAMELY M/S SOLVOCHEM AS COMPARED WITH THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSEE WAS ASKED TO EXPLAIN THE DI SCREPANCY IN THE ACCOUNT. SINCE ASSESSEE COULD NOT EXPLAIN THE DISCREPANCY AND NO RECONCILIATION WAS FILED, THEREFORE ADDITION WAS MADE FOR A SUM OF RS. 3,57,814/-. THE LD. CIT(APPEALS) FOUN D THAT THE ASSESSEE AGREED FOR ADDITION OF RS. 12,931/- ON ACC OUNT OF DIFFERENCE IN THE BALANCE OF M/S SOLVOCHEM VIDE LET TER DATED 08.12.2011 BEFORE THE ASSESSING OFFICER, THEREFORE ON AGREED ADDITION, APPEAL OF THE ASSESSEE WAS DISMISSED. 8. WITH REGARD TO DIFFERENCE IN THE ACCOUNT OF M/S DAURALA SUGAR WORKS, CONFIRMATION WAS FILED BEFORE LD. CIT( APPEALS) BUT NO REASON WAS GIVEN WHY CONFIRMATION WAS NOT FILED BEFORE THE ASSESSING OFFICER. THEREFORE, ASSESSEE WAS NOT ALLO WED TO FILE THE SAME AT THE APPELLATE STAGE. THE GROUND OF APPEAL OF THE ASSESSEE WAS ACCORDINGLY, DISMISSED. 9. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES. THE ASSESSEE'S COUNSEL HAS FILED COPY OF THE LETTER DAT ED 08.12.2011 REFERRED TO BY LD. CIT(APPEALS) IN THE IMPUGNED ORD ER WHICH IS FILED BY LD. COUNSEL FOR THE ASSESSEE BEFORE ASSESS ING OFFICER IN WHICH THE LD. COUNSEL FOR THE ASSESSEE, ON BEHALF O F THE ASSESSEE HAS AGREED FOR ABOVE ADDITIONS AND OFFERED THE SAME 4 DISALLOWANCES FOR TAXATION. THE LD. CIT(APPEALS) W AS THEREFORE, JUSTIFIED IN HOLDING THAT SINCE THESE ADDITIONS WER E AGREED BEFORE ASSESSING OFFICER AT ASSESSMENT STAGE, THEREFORE, A SSESSEE HAS NO GRIEVANCE AND APPEAL OF THE ASSESSEE HAD BEEN CO RRECTLY DISMISSED. IT IS WELL SETTLED LAW THAT NO APPEAL L IES ON AGREED ADDITIONS. 10. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF BANTA SINGH KARTAR SINGH 125 ITR 239 HELD AS UNDER : HELD, THAT IT WAS ON THE AGREEMENT OF THE ASSES SEE, WHICH AGREEMENT MENTIONED THE RATE AS WELL AS THE FIGURE, THAT PENALTY HAD BEEN LEVIED. THE ASSESSEE HAD NO RIGHT TO AGITATE THIS QUESTION IN APPEAL. THE TRIBUNAL WAS RIGHT IN LAW IN NOT GOING INTO THE QUESTION WHETHER THE PENALTY WAS IN LAW THE MINIMUM PENALTY LEVIABLE UNDER S.271(1)(C) OF THE I.T. ACT, 1961. 11. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF JI VATLAL PURTAPSHI, 65 ITR 261 (BOM.) HELD AS UNDER : HELD, THAT THE DEPARTMENT, HAVING AGREED TO DELETE THE AMOUNT FROM THE COMMISSIONER AND HAVING CONCEDED THE DELETION BEFORE THE APPELLATE ASSISTANT COMMISSIONER, CANNOT BE HELD TO BE AGGRIEVED BY THI S PART OF THE ORDER TO ENABLE IT TO FILE AN APPEAL TO THE TRIBUNAL; THE APPEAL OF THE DEPARTMENT REGARDING TH E DELETION OF THE AMOUNT WAS NEITHER COMPETENT NOR CAPABLE OF BEING ENTERTAINED BY THE TRIBUNAL. 12. THE KERALA HIGH COURT IN THE CASE CIT VS. VAMAD EVAN BHANU 330 ITR 559 (KER) HELD AS UNDER : ASSESSMENT ASSESSMENT ON AGREED BASIS ASSESSEE CANNNOT APPEAL AGAINST SUCH ORDER- INCOME-TAX ACT, 1961. 5 13. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DECISIONS, IT IS CLEAR THAT ASSESSEE AGREED FOR THE ABOVE ADDITIONS, THEREFORE LD. CIT(APPEALS) WAS JUSTIFIED IN DISMISSING THESE GROUNDS OF APPEAL OF THE ASSESSEE ON BEING AG REED ADDITIONS. HOWEVER, WITH REGARD TO PART ADDITION OF RS. 3,44,883/-, ON GROUND NO. 4, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE CONFIRMATION OF CREDITOR M/ S DAURALA SUGAR WORKS BUT ASSESSEE FAILED TO PRODUCE COPY OF THE ACCOUNT AND CONFIRMATION. THE ASSESSEE CHALLENGED THE ADDI TION BEFORE LD. CIT(APPEALS) AND FILED THE CONFIRMATION BUT SAM E WAS NOT ADMITTED AS ADDITIONAL EVIDENCE. THE ASSESSEE IN G ROUND NO. 4 HAS NOT RAISED ANY FURTHER GROUND OF APPEAL CHALLEN GING THE REJECTION OF THE CONFIRMATION FOR ADMISSION OF ADDI TIONAL EVIDENCE. IN THE ABSENCE OF ANY CHALLENGE TO THE F INDING OF THE LD. CIT(APPEALS) REFUSING TO ADMIT ADDITIONAL EVIDE NCE, NO INTERFERENCE IS CALLED FOR IN THE MATTER. IN THE R ESULT, GROUND OF APPEAL NOS. 2 TO 4 OF THE APPEAL OF THE ASSESSEE AR E DISMISSED. 14. ON GROUND N O. 5, ASSESSEE CHALLENGED THE ADDIT ION OF RS. 3,52,000/- ON ACCOUNT OF CLAIM OF DEPRECIATION ON G ENERATOR AND ALSO SUBMITTED THAT THE LD. CIT(APPEALS) SHOULD HAV E EXTENDED THE BENEFIT UNDER RULE 46 OF THE IT RULES. THE ASS ESSING OFFICER DID NOT ALLOW DEPRECIATION ON GENERATOR BECAUSE ASS ESSEE DID NOT PRODUCE ANY EVIDENCE REGARDING PURCHASE OF GENERATO R. THE ASSESSEE PRODUCED THE BILL OF GENERATOR BEFORE LD. CIT(APPEALS) AND EXPLAINED THAT THE SAME BILL COULD NOT BE PRODU CED BEFORE ASSESSING OFFICER BECAUSE IT WAS WITH THE EXCISE DE PARTMENT. THE ASSESSEE REQUESTED THAT BILL MAY BE ADMITTE D UNDER RULE 6 46A OF THE IT RULES. THE LD. CIT(APPEALS), HOWEVER , DID NOT ADMIT THE SAME UNDER RULE 46A AND CONFIRMED THE ADD ITION. 15. AFTER HEARING RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT LD. CIT(APPEALS) SHOULD HAVE ADMITTED THE ADDITIONAL EV IDENCE AT THE FIRST APPELLATE STAGE BECAUSE THE BILL OF PURCHASE OF GENERATOR IS RELEVANT DOCUMENT FOR THE PURPOSE OF DISPOSAL OF TH E APPEAL. THE COPY OF THE BILL IS FILED AT PAGE 46 OF THE PAP ER BOOK WHICH PRIMA-FACIE SUPPORT THE CLAIM OF ASSESSEE FOR PURCH ASE OF GENERATOR. THE HON'BLE SUPREME COURT IN THE CASE O F TEK RAM VS CIT 262 ITR 118 HELD THAT WHEN THE ASSESSEE FILED CERTAIN DOCUMENTS BEFORE THE SUPREME COURT FOR THE FIRST TI ME WHICH ARE OF SOME RELEVANCE AND ARE REQUIRED TO BE LOOKED INT O BY THE HIGH COURT FOR DECIDING THE APPEAL, THE IMPUGNED ORDER P ASSED BY THE HIGH COURT WAS SET ASIDE AND THE MATTER WAS REMANDE D BACK TO THE HIGH COURT FOR FRESH DISPOSAL OF APPEAL AFTER A CCEPTING THE DOCUMENT FILED BY THE ASSESSEE. SINCE IN THE PRESENT CASE, THE BILL OF PURCHASE OF GENERATOR IS RELEVANT FOR GRANT OF DEPRECIATION TO THE ASSESSEE, THEREFORE, LD. CIT(APPEALS) SHOULD HAVE ADMITTED SUCH ADDITIONAL EVIDENCE AT FIRST APPELLATE STAGE F OR DECIDING THE MATTER IN ISSUE. WE ACCORDINGLY, ADMIT THE ADDITIO NAL EVIDENCE SO FILED BEFORE THE LD. CIT(APPEALS) AND SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MATTER IN ISS UE TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE TH IS ISSUE BY CONSIDERING THE BILL OF PURCHASE OF THE GENERATOR B Y GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FILE COPY OF THE BILL BEFORE ASSESSING 7 OFFICER AND SHALL PRODUCE THE ORIGINAL BILL FOR INS PECTION OF THE ASSESSING OFFICER. 16. IN THE RESULT, THIS GROUND OF APPEAL OF THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 17. NO OTHER POINT IS ARGUED OR PRESSED. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH JUNE, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 4 TH JUNE,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH