Asstt. Commissioner of Income Tax ,, Lucknow V. M/s. Gyan Security Press (P) Ltd., Lucknow

ITA 128/LKW/2013

• Counselvise Citation: 12823714 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 06-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.128/LKW/2013 ASSESSMENT YEAR:2006 - 07 A.C.I.T., RANGE - 3, LUCKNOW. VS. M/S GYAN SECURITY PRESS (P) LTD., B.N. ROAD, CHAULAKHI, LUCKNOW. PAN:AABCG2178D (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ALOK MITRA, D.R. RESPONDENT BY NONE DATE OF HEARING 12/05/2014 DATE OF PRONOUNCEMENT 1 3 /06/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT (A) - II, LUCKNOW DATED 26/12/2012 FOR ASSESSMENT YEAR 2006 - 2007. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ALLOWING THE DISALLOWANCE OF RS.5,22,014/ - ON ACCOUNT OF EXPENSES CLAIMED TOWARDS SALARY AND WAGES (RS.4,73,52 4/ - ) AND SECURITY SERVICE WAGES (RS.88,490/ - ) WITHOUT APPRECIATING THE FACT THAT THE DIARY DIVISION WAS NOT WORKING DURING THE YEAR UNDER C ONSIDERATION FOR WHICH EXPENSES WERE CLAIMED. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.60,00,000/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD NOT CO - OPERATED WITH THE A.O. DURING REMAND REPORT PROCEEDING AND ALSO HAD NOT SUBMITTED THE 2 CONFIRMATION FR OM THE PARTIES REGARDING UNSECURED LOAN BEFORE THE A.O. 3. APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUND OF APPEAL, AS STATED ABOVE AS AND WHEN NEED OF DOING SO ARISES WITH THE PRIOR PERMISSION OF THE HON'BLE BENCH. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF NOTICE AND HENCE , WE PROCEED TO DECIDE THE APPEAL OF THE REVENUE EX - PARTE QUA THE ASSESSEE. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D.R. AND GONE THROUGH THE DOC UMENTS AVAILABLE ON RECORD. WE FIND THAT AS PER THE FIRST GROUND OF APPEAL, THE REVENUE IS DISPUTING THE DISALLOWANCE OF RS.5,22,014/ - DELETED BY CIT(A). THIS DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER ON THE BASIS THAT THE ASSESSEE HAS CLAIMED DEDUC TION OF SALARY AND WAGES OF DAIRY DIVISION FOR THIS YEAR AMOUNTING TO RS.4,33,524/ - AND SECURITY SERVICE WAGES OF RS.88,490/ - . IT WAS INTIMATED BY THE ASSESSEE TO THE ASSESSING OFFICER THAT THE DAIRY UNIT HAD CLOSED DOWN IN EARLIER YEAR. THE ASSESSING OF FICER HELD THAT WHEN THE DAIRY DIVISION WAS NOT WORKING DURING THE RELEVANT YEAR THEN THERE WAS NO JUSTIFICATION FOR CLAIMING EXPENDITURE OF SALARY AND WAGES AND SECURITY SERVICE WAGES WITH RESPECT TO DAIRY DIVISION. THE CIT(A) HAS DELETED THIS DISALLOWAN CE BY STATING THAT THE ASSESSING OFFICER FAILED TO MAKE ANY ENQUIRY TO ASCERTAIN AS TO WHAT SERVICE WAS GIVEN BY THE EMPLOYEES ONCE A PARTICULAR DIVISION WAS CLOSED. HE HAS FURTHER HELD THAT THE ASSESSEE CLAIMED THAT THERE WAS COMPLETE UNITY IN THE TWO DI VISIONS AND EMPLOYEES WERE INTERCHANGEABLE DESERVES CONSIDERATION. TO THIS EXTENT, WE ARE IN AGREEMENT WITH CIT(A) THAT THIS ARGUMENT OF THE ASSESSEE DESERVES CONSIDERATION BUT WE ALSO FIND THAT NO SUCH ARGUMENT WAS MADE BY THE ASSESSEE BEFORE THE ASSESSI NG OFFICER AND WHEN SUCH 3 ARGUMENT WAS MADE BY THE ASSESSEE BEFORE THE CIT(A), THE CIT(A) SHOULD HAVE OBTAINED REMAND REPORT FROM THE ASSESSING OFFICER ON THIS ASPECT . AS PER THE GROUNDS OF APPEAL, IT IS ALSO SEEN THAT EVEN DURING THE REMAND PROCEEDINGS , THE ASSESSEE HAS NOT CO - OPERATED WITH THE ASSESSING OFFICER. THERE IS NO MENTION IN THE ORDER OF CIT(A) ALSO THAT HE HAS OBTAINED ANY REMAND REPORT ON THIS ASPECT FROM THE ASSESSING OFFICER. HENCE, ON THIS ASPECT, WE FEEL THAT THE ORDER OF CIT(A) IS NOT SUSTAINABLE BECAUSE THE SAME IS WITHOUT OBTAINING ANY REMAND REPORT FROM THE ASSESSING OFFICER. IN OUR CONSIDERED OPINION, THIS ISSUE SHOULD GO BACK TO CIT(A). ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) FOR FRESH DECISION AFTER OBTAINING REMAND REPOR T FROM THE ASSESSING OFFICER ON THIS ASPECT. THE ASSESSEE SHOULD CO - OPERATE WITH THE ASSESSING OFFICER IN REMAND PROCEEDINGS AND BRING ALL EVIDENCE ON RECORD BEFORE THE ASSESSING OFFICER AS REQUIRED BY HIM. 6. REGARDING THE SECOND ISSUE, BEING DELETION OF ADDITION OF RS.60 LAC MADE BY THE ASSESSING OFFICER U/S 68, WE FIND THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE BASIS THAT THE ASSESSEE HAS NOT SUBMITTED ANY DOCUMENTARY EVIDENCE WITH REGARD TO I DENTITY AND CREDITWORTHINESS OF THE LOAN PROVIDERS AND THE ASSESSEE HAS ALSO FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS. ON THIS ASPECT, THE FINDING OF CIT(A) IS THAT THE LOAN WAS OBTAINED BY THE ASSESSEE FROM BANKING CHANNELS. IN OUR CONSID ERED OPINION, MERELY OBTAINING THE LOAN FROM BANKING CHANNEL DOES NOT ESTABLISH THE CREDITWORTHINESS OF THE LOAN CREDITOR. HENCE, ON THIS ASPECT ALSO, WE FEEL THAT THE ORDER OF CIT(A) IS NOT SUSTAINABLE. HOWEVER, WE FEEL THAT ON THIS ISSUE ALSO, THE MATT ER SHOULD GO TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER OBTAINING REMAND REPORT FROM THE ASSESSING OFFICER IN WHICH THE ASSESSEE SHOULD CO - OPERATE WITH THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) FOR FRESH DECISION AFTER 4 OBTAI NING REMAND REPORT FROM THE ASSESSING OFFICER ON THIS ISSUE AL S O . THE ASSESSEE SHOULD CO - OPERATE WITH THE ASSESSING OFFICER IN REMAND PROCEEDINGS AND BRING ALL EVIDENCE ON RECORD BEFORE THE ASSESSING OFFICER AS REQUIRED BY HIM. 7. IN THE RESULT, THE APPE AL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE D: 1 3 /06/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR