Suman Organics & Fertilizers (P) Ltd, Dhule V. Deputy Commissioner of Income tax, Dhule

ITA 1324/PUN/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0983 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 24-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HOSHANG BOMAN IRANI
• Assessee Lawyers: N O N E
• Keywords: Depreciation; Corroborative evidences; Set aside
• Section: 142(1); 201; 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / ITA NO . 13 24 /PUN/201 7 / ASSESSMENT YEAR : 20 1 2 - 13 SUMAN ORGANICS & FERTILIZERS (P) LTD., 13, JANKI NAGAR, WADI BHOKAR ROAD, DEOPUR, DHULE - 424002 PAN : AALCS4197A ....... / APPELLANT / V/S. DY. COMMISSIONER OF INCOME TAX , CIRCLE DHULE / RESPONDENT ASSESSEE BY : N O N E REVENUE BY : SHRI HOSHANG BOMAN IRANI / DATE OF HEARING : 20 - 11 - 2019 / DATE OF PRONOUNCEMENT : 16 - 12 - 2019 / ORDER PER S.S. VISWANETHRA RAVI, JM : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 21 - 03 - 2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 1, NASHIK [CIT(A)] FOR ASSESSMENT YEAR 201 2 - 13. 2. AT THE TIME OF HEARING , WE FIND NO REPRESENTATION ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION FILED SEEK ING ADJOURNMENT. THE ASSESSEE CALLED ABSENT AND S ET EX - PARTE. THEREFORE, WE PROCEED TO HEAR LD. DR AND PASS ORDER ON MERITS IN TERMS OF MATERIAL AVAILABLE ON RECORD. 2 ITA NO.1324/PUN/2017, A.Y. 2012 - 13 3. HEARD LD. DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE IS A PRIV ATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF FERTILIZERS AND ALLIED PRODUCTS AND CONDUCTS ITS BUSINESS UNDER THE NAME AND STYLE AS SUMAN ORGANICS & FERTILIZERS PRIVATE LIMITED. THE ASSESSEE FILED RETURN OF INCOME DECLARING A TOTAL INC OME OF RS.68,66,470/ - AND UNDER SCRUTINY, NOTICES U/S. 143(2) AND 142(1) OF THE ACT WERE ISSUED. THE ASSESSING OFFICER ASSESSED TOTAL INCOME OF THE ASSESSEE AT RS.87,18,722/ - BY MAKING DISALLOWANCES ON ACCOUNT OF PROFESSIONAL OR TECHNICAL SERVICES, ADDITI ON TO FIX ED ASSETS, DONATION FOR CHARITY PURPOSE, EMPLOYEES CONTRIBUTION, REPAIRS AND MAINTENANCE OF VEHICLES, EXCESS DEPRECIATION AND OTHER EXPENSES RELATING TO OFFICE STATIONERY AND TRAVELLING. WE NOTE THAT THE ASSESSING OFFICER PROCEEDED FOR ABOVE SAID DISALLOWANCES FOR FAILURE OF FURNISHING OF DETAILS RELATING THERETO BY THE ASSESSEE. FURTHER, IT IS NOTED THAT THE ASSESSING OFFICER SOUGHT SUPPORTING EVIDENCES IN TERMS OF CLAIMS MADE BY ASSESSEE BUT HOWEVER, IN SPITE OF HAVING OPPORTUNITY , THE ASSESSEE COULD NOT PRODUCE THE DETAILS AS SOUGHT BY THE ASSESSING OFFICER . 4. AS AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) ISSUED NOTICE DATED 19 - 08 - 2016 FIXING THE DATE OF HEARING ON 14 - 09 - 2016 BY SPEED POST AND THE SAME WAS RETURNED WITH AN ENDORSEMENT OF ASSESSEE LEFT. WE FIND ON WHICH DATE NO APPEARANCE WAS MADE ON BEHALF OF THE ASSESSEE BUT HOWEVER WRITTEN SUBMISSIONS W ERE FILED. SINCE 14 - 09 - 2016 THE SAID APPEAL WAS ADJOURNED FROM TIME T O TIME FOR NON - APPEARANCE OF ANY AUTHORIZED REPRESENTATIVE ON BEHALF OF THE ASSESSEE OR FOR CHANGE OF AUTHORIZED REPRESENTATIVE S BY THE ASSESSEE. TAKING INTO CONSIDERATION THE NEGLIGENT ATTITUDE OF THE ASSESSEE THE CIT(A) HELD THAT THE ASSESSEE IS NOT INT EREST ED IN PROSECUTING THE APPEAL AND PROCEEDED TO ADJUDICATE THE APPEAL ON MERITS AS PER MATERIAL 3 ITA NO.1324/PUN/2017, A.Y. 2012 - 13 AVAILABLE ON RECORD. WE FIND THAT THE CIT(A) PLACED RELIANCE ON MANY DECISIONS SUCH AS THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF FAIRDEAL FILAMENTS L TD. VS. CIT REPORTED IN 302 ITR 173, HIGH COURT OF DELHI IN THE CASE OF CIT VS. GOLD LEAF CAPITAL CORPORATION LTD., HIGH COURT OF BOMBAY IN THE CASE OF M/S. CHEMIPOL VS. UNION OF INDIA, HIGH COURT OF M ADHYA PRADESH I N THE CASE OF TUKOJIRAO HOLKAR VS. CWT R EPORTED IN 23 ITR 480 AND THE HONBLE SUPREME COURT IN THE CASES OF DR. P. NALLA THAMPY VS. SHANKAR AND NEW INDIA ASSURANCE VS. SRINIVASAN REPORTED IN 1984 (SUPP) SCC 63 AND (2003) 3 SCC 242, RESPECTIVELY FOR THE PROPOSITION THAT A NEGLIGENT ASSESSEE SHOUL D NOT BE GIVEN MANY OPPORTUNITIES JUST BECAUSE THAT QUANTUM OF AMOUNT INVOLVED IS HIGH AND NECESSARY COURSE OF ACTION IS TO DRAW ADVERSE INFERENCE. FURTHER, PLACED RELIANCE IN THE CASE OF WHIRLPOOL OF INDIA LTD. VS. DCIT OF ITAT, DELHI BENCHES BUT HOWEVER , PROCEEDED TO DISPOSE OF THE ISSUE S RAISED BEFORE HIM ON MERITS AND CONFIRMED THE ORDER OF ASSESSING OFFICER. 5. BEFORE US, THE ASSESSEE RAISED THREE GROUNDS OF APPEAL CHALLENGING THE ACTION OF CIT(A) IN CONFIRMING THE ADDITIONS MADE ON ACCOUNT OF REPA IRS AND MAINTENANCE OF VEHICLES, DEPRECIATION AND EXPENSES RELATING TO OFFICE STATIONERY AND TRAVELLING IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE ASSESSEE FILED THIS APPEAL ON 24 - 05 - 2017. AFTER SCRUTINY OF APPEAL MEMO THE REGISTRY, ITAT, PUNE BENCHES ISSUED NOTICE DATED 12 - 07 - 2019 TO ASSESSEE INTIMATING FIXATION OF DATE OF HEARING BY POST. ON SUCH DATE , NO REPRESENTATION WHATSOEVER MADE BEFOR E THIS TRIBUNAL AND THE APPEAL WAS ADJOURNED TO 23 - 09 - 2019 BY ORDER ING ISSUANCE OF FRESH NOTICE. AGAIN REGISTRY ISSUED ANOTHER NOTICE DATED 02 - 08 - 2019 INTIMATING THE FIXATION OF DATE OF HEARING ON 23 - 09 - 2019 AND THE RECORD SHOWS THAT NO REPRESENTATION ON BEHALF OF THE ASSESSEE AND AGAIN THE APPEAL WAS 4 ITA NO.1324/PUN/2017, A.Y. 2012 - 13 ADJOURNED TO 20 - 11 - 2019. IN PURSUANCE OF DIRECTION OF BENCH THE REGISTRY ISSUED ANOTHER NOTICE DATED 03 - 10 - 2019 TO THE ASSESSEE INTIMATING THE FIXATION OF DATE OF HEARING ON 20 - 11 - 2019 BY POST BUT HOWEVER AS DISCUSSED ABOVE NO REPRESENTATION WAS MADE BEFORE THIS TRIBUNAL ON THIS DAY AND THEREFORE, IN OUR OPINION THE ASSESSEE IS NOT INTEREST ED TO PROSECUTE ITS APPEAL AND WE PROCEED TO ADJUDICATE THE ISSUES RAISED BEFORE US IN TERMS OF RULE 24 OF ITAT RULES, 19 63. 7. THE GROUND NO. 1 RAISED INVOLVING THE ADDITION MADE ON ACCOUNT OF REPAIRS AND MAINTENANCE OF VEHICLES. 8. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER COMPARED IMMEDIATE PRECEDING A.YS. INCOME OF TRUCK LEASE RENT WITH THA T OF THE CURRENT YEAR OF INCOME WHEREIN HE FOUND THAT THE ASSESSEE HAS NOT SHOWN ANY INCOME DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN WHY THERE WAS NO INCOME DURING YEAR UNDER CONSIDERATION ON TRUCK LEASE REN T COMPARED TO IMMEDIATE PRECEDING ASSESSMENT YEAR OF RS.1,86,00,000/ - . THE ASSESSEE EXPLAINED THE TRUCKS WERE USED FOR LEASE PURPOSE EARLIER AND THERE WAS NO LEASE IN THE YEAR UNDER CONSIDERATION AND THE TRUCKS WERE USED FOR ASSESSEE ITSELF. THE ASSESSIN G OFFICER CONSIDERING THE SAME DISALLOWED RS.4,00,000/ - ONLY TO THE EXTENT EXPENDITURE THAT HAVE BEEN INCURRED IN CASH UNDER THE HEAD REPAIRS AND MAINTENANCE. ADMITTEDLY, THERE WAS NO EVIDENCE FILED IN THIS REGARD BEFORE THE CIT(A) AS WELL AS BEFORE THIS TRIBUNAL. WE FIND THE ASSESSING OFFICER SPECIFICALLY REQUESTED THE DETAILS OF REPAIRS AND MAINTENANCE SUCH AS VOUCHERS, WORK/SERVICES/GOODS RELATING TO REPAIRS AND MAINTENANCE OF VEHICLES. THE ASSESSEE DID NOT FILE ANY EVIDENCE WHATSOEVER IN SUPPORT OF G ROUND NO. 1 RAISED BEFORE US BY WAY OF PAPER BOOK , T HEREFORE, IN VIEW OF THE SAME IN THE ABSENCE OF ANY EVIDENCE 5 ITA NO.1324/PUN/2017, A.Y. 2012 - 13 SUPPORTING THE CLAIM OF ISSUE RAISED IN GROUND NO. 1 , WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AND IT IS JUSTIFIED. ACCORDINGLY, GR OUND NO. 1 RAISED IN THE APPEAL BY THE ASSESSEE IS DISMISSED. 9. THE GROUND NO. 2 RAISED CHALLENGING THE ACTION OF CIT(A) IN CONFIRMING THE ADDITION MADE ON ACCOUNT OF DEPRECIATION ON TRUCKS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. THE ASSESSEE CLAIMED DEPRECIATION ON TRUCKS @ 30%. ACCORDING TO ASSESSING OFFICER THE TRUCKS WERE NOT USED FOR A BUSINESS PURPOSE AND HELD IT IS AN EXCESS CLAIM AND RESTRICTED DEPRECATION TO 20%. THE CIT(A) CONSIDERING THE PROFIT AND LOSS ACCOUNTS AND FO UND NO LEASE RENT WERE SHOWN BY THE ASSESSEE ON TRUCKS AND IN THE ABSENCE OF EVIDENCE SHOWING THAT THE SAID TRUCKS W ERE USED FOR BUSINESS CONFIRMED THE ORDER OF ASSESSING OFFICER IN RESTRICTING THE DEPRECIATION @ 20% AS AGAINST CLAIM OF @ 30% BY THE ASSESS EE. WE FIND NO EVIDENCE BEFORE THE TWO AUTHORITIES BELOW INCLUDING THIS TRIBUNAL. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) IN CONFIRMING THE ORDER OF ASSESSING OFFICER. THUS, GROUND NO. 2 RAISED BY THE ASSESSEE FAILS AND IT IS DISMISSED. 11. GROUND NO. 3 INVOLVING THE ADDITION MADE ON ACCOUNT OF EXPENSES RELATING TO OFFICE PRINTING AND STATIONERY AND TRAVELLING IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 12. THE ASSESSEE CLAIMED EXPENSES RELATING TO ABOVE SAID THREE HEADS TO AN EXTENT OF RS.6,57,491/ - . THE ASSESSING OFFICER DISALLOWED TO THE EXTENT WHICH HAVE BEEN INCURRED IN CASH OF RS.1,31, 498/ - . AS DISCUSSED ABOVE, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF FERTILIZERS AND ALLIED PRODUCTS AND DECLARED INCOME OF RS. 68,66,470/ - IN THE RETURN OF 6 ITA NO.1324/PUN/2017, A.Y. 2012 - 13 INCOME. THERE IS NO DISPUTE THAT THE ASSESSEE ENGAGED IN NO BUSINESS ACTIVITY. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES RELATING TO EXPENDITURE INVOLVING OF OFFICE, PRINTING AND STATIONERY AND TRAVELLING , WE FIND THE CLAIM OF ASSESSEE AT RS.6,57,491/ - IS REASONABLE AND THEREFORE, THE ORDER OF CIT(A) IS NOT JUSTIFIED AND IT IS SET ASIDE. THUS, GROUND NO. 3 RAISED BY THE ASSESSEE IS ALLOWED. 13. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER P RONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER, 2019. SD/ - SD/ - (ANIL CHATURVEDI) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBE R / PUNE; / DATED : 16 TH DECEMBER, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 1, NASHIK 4. THE PR. COMMISSIONER OF INCOME TAX - 1, NASHIK 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRU E COPY // / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE