M/s Murlidhar Castor Oil Inds., Dhoraji V. The Income Tax Officer, Ward-2(1)(1), RAJKOT-GUJARAT

ITA 125/RJT/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8874 (ITAT-RAJKOT)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 19-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DM RINDANI
• Section: 40A(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT , , BEFORE SHRI PRADIP KUMAR KEDIA , A CCOUNTANT MEMBER & SHRI MAHAVI R PRASAD , JUDICIAL MEMBER ./ I.T.A. NO. 125 /RJT/201 7 ( / ASSESSMENT YEAR : 2013 - 14 ) M/S. MURLIDHAR CASTOR OIL INDUSTIRES, JAMKANDORNA TALUKA DHORAJI. / VS. THE INCOME TAX OFFICER, WARD 2(1)(1), RAJKOT ./ ./ PAN/GIR NO. : AAJFM 7511 M ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI D.M. RINDANI, C.A. / RESPONDENT BY : SHRI PRAVIN VERMA, D.R. / DATE OF HEARING 12/03/2018 / DATE OF PRONOUNCEMENT 16 / 0 3 /201 8 / O R D E R PER MAHAVIR PRASAD JUDICIAL M EMBER : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE CO MMISSIONER OF INCOME TAX( APPEAL S ) - 2, RAJKOT [CIT( A ) IN SHORT] VIDE APPEAL NO.CIT(A) - 2/334/2015 - 16 DATED 27/01/2017 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.14 3(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 29 /0 2 /201 6 RELEVANT TO ASSESSMENT YEAR (AY) 201 3 - 14 . 2. THE G ROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER: - 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) - 2, RAJKOT ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN ITA NO. 125 /RJT / 201 7 M/S. MURLIDHAR CASTOR OIL INDUSTRIES VS. ITO ASSESSMENT YEAR 2013 - 14 - 2 - DISALLOWING RS.11,70,724/ - U/S. 40A(3) OF THE ACT BEING PAYMENT MADE TO PASCHIM GUJARAT VIJ CO. LTD. (PGVCL), A STATE GOVERNMENT UNDERTAKING, I N CASH. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 2, RAJKOT FAILED TO APPRECIATE THE EXPEDIENCY IN MAKING CASH PAYMENT, PARTICULARLY TO A GOVERNMENT UNDERTAKING. 3. ON EXAMINING THE DETAILED ACCOUNTS AND PAYMENTS BY THE LD.AO OBTAINED FROM PGV CL, IT IS SEEN THAT THE APPELLANT HAS MADE CASH PAYMENT S TO THE ELECTRICITY BILL AS DETAILED BELOW: DATE OF BILL PAYMENT AMOUNT PAID IN CASH (RS.) 27.04.2012 99,350/ - 31.05.2012 1,51,920/ - 06.07.2012 1,55,710/ - 28.07.2012 1,04,000/ - 28.08.2012 1,04,000/ - 25.09.2012 55,500/ - 29.01.2013 1,69,070/ - 22.01.2013 1,65,474/ - 21.03.2013 1,65,670/ - TOTAL RS. 11,70,724/ - 4. THEREAFTER, A SHOW - CAUSE NOTICE WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO THE SAID NOTICE A PPELLANT REPLIED THAT CASH PAYMENT OF RS.11 , 70 , 724/ - TO PG VCL TOWARD S E LECTRIC B ILL S . ENTIRE PAYMENT WAS MADE ON PIECEMEAL BASIS FROM APRIL, 2012 TO MARCH, 2013. THE BI LL AMOUNT IS MOSTLY MORE THAN 1 LAKH AND AS SUCH THE PAYMENT IS MADE BEFORE DUE DATE TO AVOID PENAL INTEREST AND OTHER COERCIVE ACTION SUCH AS DISCONNECTION OF POWER SU PPLY. THEREFORE, WE WERE COMPELLED TO MAKE CASH PAYMENT. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGNED ORDER. LD. AR ARGUED THAT BENEFIT OF RULE 6DD SHOULD BE GIVE N TO THE ITA NO. 125 /RJT / 201 7 M/S. MURLIDHAR CASTOR OIL INDUSTRIES VS. ITO ASSESSMENT YEAR 2013 - 14 - 3 - APPELLANT AS IT IS CLEARLY MENTIONED IN RULE 6DD(B), WHEREIN, IT IS MENTIONED WHERE THE PAYMENT IS MADE TO THE GOVERNMENT AND UNDER THE RULE FRAMED BY IT, SUCH PAYMENT IS REQUIRED TO BE MADE IN LEGAL TENDER. 6. SO FAR PASCHIM GUJARAT VIJ CO . LTD. (PGVCL) IS CONCERNED THAT THE COMPANY PGVCL HAVING ITS HEAD OFFICE AT VADODARA AND REGISTERED OFFICE AT RAJKOT. THE COMPANY IS REGISTERED AS GOVERNMENT HOLDING COMPANY WITH REGISTRAR OF COMPANIES (ROC). THE COMPANY IS PUBLIC SECTOR UNDER TAKING (PSU) AND WHOLLY OWNED BY STATE GOVERNMENT OF GUJARAT. THE SHARE HOLDING IS OF THE STATE GOVERNMENT OF GUJARAT (STATE GOVT.). THE POLICY IS FRAMED BY THE STATE GOVT. CASH PAYMENTS HAS BEEN MADE TO THE GOVT. COMPANY AND IN SUCH CASE DISALLOWANCE CANNOT BE MADE U/ S.40A(3) OF THE ACT. THUS, WE ALLOW THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE APPELLANT IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 16 / 0 3 /201 8 SD/ - SD/ - ( ) ( ) ( PRADIP KUMAR KEDIA ) ( MAHAVIR PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 16 / 03 /2018 PRITI YADAV , SR. PS ITA NO. 125 /RJT / 201 7 M/S. MURLIDHAR CASTOR OIL INDUSTRIES VS. ITO ASSESSMENT YEAR 2013 - 14 - 4 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - 2 , RAJKOT . 5. , , /DR,ITAT, RAJKOT 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, RAJKOT 1. DATE OF DICTATION 12/03/2018 (DICTATION - PAD 2 PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 13/03/2018 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S .. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S . 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER .. 10. DATE OF DESPATCH OF THE ORDER