ACIT, Circle - 2, Asansol, Asansol V. M/s. Eastern coalfields Limited, Burdwan

ITA 1357/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5321 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 22-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM; SHANKAR HALDER
• Keywords: Corroborative evidences; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1357/KOL/2018 ( / ASSESSMENT YEAR: 2004-05) ACIT, CIRCLE-2, ASANSOL VS. M/S EASTERN COALFIELDS LTD. CMDS OFFICE, SANCTORIA, P.O.- DISHERGARH, DIST. BURDWAN-71333 ./ ./PAN/GIR NO. : AAACE 7590 E (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI RADHEY SHYAM, CIT DR AND SHRI SHANKAR HALDER, JCIT, SR. DR RESPONDENT BY : NONE / DATE OF HEARING : 16/04/2019 /DATE OF PRONOUNCEMENT : 15/05/2018 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERT AINING TO ASSESSMENT YEAR 2004-05 IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEAL)-ASANSOL, WHICH IN TURN ARISES OUT OF AN AS SESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) DATED 29.12.2006. 2. THE GROUND NOS. 3 AND 4 RAISED BY THE REVENUE ARE AS FOLLOWS: 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A), ASANSOL IS JUSTIFIED IN DELETING THE ADDITI ON MADE ON ACCOUNT OF DISALLOWANCE OF CURRENT LIABILITIES AMOUNTING TO RS. 1,22,06,16,000/- MERELY BY RELYING ON THE PRESUMPTION THAT THE ASSES SEE, BEING A PSU, CANNOT CREATE A FICTITIOUS LIABILITY IN THE BOOKS. M/S EASTERN COALFIELDS LTD. ITA NO.1357/KOL/2018 ASSESSMENT YEAR:2004-05 P PP PA AA AG GG GE EE E | || | 2 22 2 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A), ASANSOL IS JUSTIFIED IN ALLOWING THE LIABIL ITY ON A THEORETICAL BASIS IN THE ABSENCE OF PARTY-WISE DETAILS WHICH WERE NOT SU BMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. 3. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD . DEPARTMENTAL REPRESENTATIVE(DR), WAS PRESENT FOR THE APPELLANT R EVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DIS POSED OF EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON M ERITS IN TERMS OF RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, RULES, 1963. 4. WE HAVE HEARD THE LD DR FOR THE REVENUE AND PERU SED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT LD. CIT(A) DID NOT EXAMINE PAR TY-WISE DETAILS OF LIABILITY. WE NOTE THAT THE LD. CIT(A) DID NOT DISCUSS THE ASSESS EES CASE ON MERITS BASED ON THE MATERIAL AVAILABLE BEFORE HIM. THE LD. DR FOR THE R EVENUE FURNISHED BEFORE US WRITTEN SUBMISSION, WHICH ARE REPRODUCED BELOW: IN THIS CASE, THE A.O. HAS ORIGINALLY PASSED AN OR DER DATED 29.12.2006 WHEREIN PROVISIONS UNDER THE HEADS 'EMPLOYEES REMUNERATION & BENEFIT' AND 'ARREAR SALARY AND WAGES' WERE CLAIMED IN THE PROFIT & LOSS A/C. THE A.O. MADE DISALLOWANCE RS.28557.50 LACS ON TWO GROUNDS. 1. THAT THE CLAIM OF THE APPELLANT, THAT THE PROVIS IONS WERE DULY PAID, WAS NOT VERIFIABLE IN ABSENCE OF ANY SUPPORTING DOCUMENTS. 2. THAT THE PROVISION MADE UNDER THE HEADS WERE NOT VERIFIABLE, THEREFORE IT WAS A FICTITIOUS LIABILITY. THE HON'BLE ITAT HAS DIRECTED THE CIT (A) VIDE ITS ORDER DATED 27.07.2016 TO DECIDE THIS GROUND OF APPEAL AFTER A FRESH OPPORTUN ITY GIVEN TO THE APPELLANT. THE CIT(A) HAS ALLOWED THIS CLAIM OF THE APPELLANT BY FOLLOWING THE DECISION HON'BLE SUPREME COURT IN CASE OF ROTORK CONTROLS PV T. LTD. VS CIT {180 TAXMANN 322 (SC)} ON THE GROUND THAT: I. THE ENTERPRISE HAD A PRESENT OBLIGATION AS A RES ULT OF A PAST EVENT; II. IT WAS PROBABLE THAT AN OUTFLOW OF RESOURCE WIL L BE REQUIRED TO SETTLE THE OBLIGATION; III. RELIABLE ESTIMATE COULD BE MADE OF THE AMOUNT OF OBLIGATION THEN SUCH PROVISION WAS DEFINITELY TO BE RECOGNIZED IN THE BO OKS OF ACCOUNT. HERE, IT IS PERTINENT TO MENTION THAT THE AO HAS NO T DISALLOWED THE PROVISIONS ON THE GROUND OF UNCERTAIN LIABILITY. THE A.O. HAS DIS ALLOWED THE PART OF AFORESAID M/S EASTERN COALFIELDS LTD. ITA NO.1357/KOL/2018 ASSESSMENT YEAR:2004-05 P PP PA AA AG GG GE EE E | || | 3 33 3 PROVISION ON THE GROUND THAT SUBSEQUENT PAYMENT MAD E BY THE APPELLANTS IS NOT VERIFIABLE NEITHER ANY SUPPORTING EVIDENCE HAS BEEN SUBMITTED. THE LD. CIT(A) HAS GROSSLY IGNORED THE FINDING OF T HE A.O. THAT NO EVIDENCE WAS PRODUCED AS TO WHOM THE PROVISIONS WERE MADE TO PAY . THE LD. CIT(A) SHOULD HAVE EXAMINED THE GENUINITY OF THE CLAIM AFTER ASCE RTAINING ALL THE EVIDENCES OF THE APPELLANTS CLAIM. AS THE LD. CIT(A) FAILED TO DO SO, THE ISSUE RAISED BY ASSESSING OFFICER, HAS NOT BEEN ADDRESSED. THEREFORE, THE MATTER REQUIRES TO B E RESTORED BACK TO LD. CIT(A) FOR EXAMINATION OF CLAIM MADE BY THE APPELLANT IN T HE LIGHT OF THE PAYMENTS AND EVIDENCES. THEREFORE, WE DEEM IT FIT AND PROPER TO SET ASIDE T HE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE LD. CIT(A) TO ADJUDICATE THE ISSUE AFRESH ON MERITS. FOR STATISTICAL PURPOSES, THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS TRE ATED TO BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 15.05 .2019 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 15/05/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. ACIT, CIRCLE-2, ASANSOL 2. M/S EASTERN COALFIELDS LTD. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES