Shri Deepak J. Thakkar, Dhule V. I.T.O,Wd 3(1), Dhule,

ITA 1571/PUN/2005

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49920 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-04-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 14-09-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAMINDER KAUSHAL
• Assessee Lawyers: S U PATHAK
• Keywords: Opportunity of being heard; Diversion of income; Additional evidence
• Section: 43B; 37(1); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G S PANNU, ACCOUNTANT MEMBER ITA NO 1571/PN/05 (ASSTT. YEAR: 2002-03) SHREE DEEPAK J THAKKAR, .. APPELLANT PROP. JAY JAGDISH SUGARS, 8, PARAS BAFNA MARKET, OPP. MAHANGAR PALIKA, DHULE PAN AAFPT 2062 E VS. INCOME-TAX OFFICER, WD. 3(1), DHULE .. RESPONDENT AND ITA NOS 1592 & 1875/PN/05 (ASSTT. YEAR: 2002-03) INCOME-TAX OFFICER, WD. 3(1), DHULE .. A PPELLANT VS. SHRI DEEPAK JAGDISH THAKKAR, .. RESPONDENT DHULE ASSESSEE BY : S/SHRI S U PATHAK & NIKHIL PATH AK DEPARTMENT BY: SHRI RAMINDER KAUSHAL ORDER PER G.S. PANNU, AM THE CAPTIONED THREE APPEALS, ONE BY THE ASSESSEE AND TW O BY THE REVENUE PERTAINING TO SAME ASSESSEE, WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. I.T.A NO 1571/PN/2005 IS AN APPEAL BY THE ASSESSEE, WHICH IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCO ME-TAX (APPEALS)-I, NASHIK DATED 29.7.2005 WHICH, IN TURN, HAS ARISEN OUT OF THE ORDER OF THE ASSESSING OFFICER DATED 31.3.2005 PASSED UNDER SECTION 143(3 ) OF THE 2 INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2002-03. 3. IN THIS APPEAL, THE SUBSTANTIVE GRIEVANCE IS WITH RE GARD TO THE LIABILITY CLAIMED BY THE ASSESSEE ON ACCOUNT OF REFUNDING ADDITION AL SALES REALIZATION TO THE SUGAR FACTORIES. IN BRIEF, THE FACTS LEADING TO THE IMPUGNED DISPUTE CAN BE SUMMARIZED AS FOLLOWS. THE ASSESSEE I S A TRADER/COMMISSION AGENT IN SUGAR. DURING THE YEAR UNDE R CONSIDERATION, ASSESSEE OBTAINED A LICENSE FOR EXPORT OF SUGAR AND IN THA T REGARD IT EFFECTED PURCHASES OF SUGAR FROM THREE CO-OPERATIVE SUGAR FACTORIES, NAMELY, VASANT DADA SSK LTD., (II) NIPHAD SSK LTD., AND (III) AGASTI SSK LTD. THE DETAIL OF SUCH PURCHASES ARE CONTAINED IN PARA S 5 AND 6 OF THE ASSESSMENT ORDER. IN TERMS OF THE AGREEMENTS ENTERED WITH THE AFORESAID SUGAR FACTORIES, THE SUGAR PURCHASED WAS MEANT FOR EXPOR T PURPOSES. HOWEVER, THE AGREEMENT CONTAINED A CLAUSE THAT IF FOR A NY REASON THE ASSESSEE DOES NOT EXPORT THE SUGAR PURCHASED, THE ASSESSEE W OULD HAVE THE RIGHT TO SELL SUCH STOCKS IN THE DOMESTIC MARKET. THE AGR EEMENT WITH SUGAR FACTORIES ALSO EMPOWERED THE SUGAR FACTORIES IN SUCH A CASE TO DEMAND THE DIFFERENCE OF THE ADDITIONAL SALE PRICE RE ALIZED BY THE ASSESSEE BY SELLING THE SUGAR IN DOMESTIC MARKET. THE ASSESSE E EXPLAINED THAT SINCE SUGAR PURCHASED FROM THE THREE FACTOR IES WAS NOT OF THE DESIRED QUALITY, THE SAME COULD NOT BE EXPORTED A ND IT WAS SOLD IN THE DOMESTIC MARKET. THE ASSESSEE ALSO EXPLAINED WITH SUPPORT ING DOCUMENTS THE REASONS AS TO WHY THE CONTRACTED EXPORT COUL D NOT MATERIALIZE. IT WAS CLAIMED BY THE ASSESSEE THAT SINCE THE SUGAR COULD NOT BE EXPORTED AND WAS SOLD IN THE DOMESTIC MARKET DURING THE YEAR, THE LIABILITY FOR REFUNDING THE ADDITIONAL AMOUNT OF SAL ES REALIZED FROM 3 DOMESTIC MARKET DUE TO THE CONCESSIONAL PURCHASE RATE O F SUGAR, CRYSTALIZED DURING THE YEAR UNDER CONSIDERATION. THE ASS ESSEE ALSO EXPLAINED THAT NO PROFIT WAS EARNED ON THE SALE OF SUGA R IN THE DOMESTIC MARKET BECAUSE THE SAME WAS SOLD AT LOW PRICES ON ACCOUNT O F ITS INFERIOR QUALITY. HOWEVER, SINCE THERE WAS A FIRE IN THE ASSESSEE S PREMISES RESULTING IN DESTRUCTION OF RECORDS, ASSESSEE COULD NOT SUBST ANTIATE ITS CLAIM BEFORE THE ASSESSING OFFICER BY FURNISHING COPIES OF SALE BILLS FOR SALE EFFECTED IN THE DOMESTIC MARKET. 4. THE ASSESSING OFFICER MADE AN ADDITION OF RS 3,23,87,5 23/- TO THE RETURNED INCOME ON ACCOUNT OF SUPPRESSED PROFIT ON THE SALE OF EXPORT QUOTA SUGAR DIVERTED TO THE DOMESTIC MARKET. FOR THIS PU RPOSE, THE ASSESSING OFFICER ADOPTED SALE PRICE AT RS 1430/- PER QUIN TAL. BEFORE THE ASSESSING OFFICER, THE ASSESSEE SUBMITTED THAT AS PER AGREE MENT WITH THE SUGAR FACTORIES THE ASSESSEE WAS BOUND TO PAY THEM THE PR OFIT EARNED ON THE SALE OF SUCH SUGAR IN THE DOMESTIC MARKET AND, THEREF ORE, HE SUBMITTED THAT IF THE ASSESSING OFFICER ASSUMED THAT THE ASSESSEE HAD EARNED ANY PROFIT ON SUCH TRANSACTIONS, THE SAME WOULD B E LIABLE TO BE PAID OVER TO THE SUGAR FACTORIES AND, THUS, SOUGHT DEDU CTION FOR THE SAME. THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSE E AND INSTEAD TAXED THE SUPPRESSED PROFIT ON SUCH SALES AT RS 3,2 3,87,523/-. 5. IT WAS ALSO EXPLAINED BY THE ASSESSEE THAT IN RESPECT OF THE THREE IMPUGNED TRANSACTIONS, IT HAD APPROACHED THE ARBITRATO RS AND COPIES OF THE ARBITRATION AWARDS HAVE ALSO BEEN PLACED IN THE PA PER BOOK FILED BEFORE US. THE ISSUE BEFORE THE ARBITRATOR WAS REGARDIN G THE ESTIMATION OF SALE PROCEEDS OF SUGAR AS THE ASSESSEE DID NOT HAVE ACCESS TO THE RECORDS SINCE THEY WERE BURNT IN FIRE. THE ARBITRATORS H AVE ESTIMATED THE 4 SALE PRICE AROUND RS 1300/- PER QUINTAL, WHICH WAS BROU GHT TO THE NOTICE OF THE COMMISSIONER OF INCOME-TAX (APPEALS). BEFORE TH E COMMISSIONER OF INCOME-TAX (APPEALS), ASSESSEE ALSO SUBMITTED COPIES OF SALE BILLS PROCURED FROM THE CUSTOMERS TO PROVE THAT THE ESTIMATION OF SALE PRICE ADOPTED BY THE ASSESSING OFFICER WAS ABNORMALLY HIGH. TH E COMMISSIONER OF INCOME-TAX (APPEALS) HAS SINCE ACCEPTED SUCH MATERIAL AND ALLOWED PARTIAL RELIEF TO THE ASSESSEE BY REDUCING THE SALE PRICE TO RS 1350/- PER QUINTAL. WITH RESPECT TO ONE SUGAR FACTORY, NAMELY, AGASTHI SSK LTD., THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS A LSO ALLOWED DEDUCTION OF A SUM OF RS 41,12,929/-, WHICH WAS ACTUALLY PAID BY THE ASSESSEE. REGARDING THE OTHER TWO SUGAR FACTORIES, THE CO MMISSIONER OF INCOME-TAX (APPEALS) HAS NOT ALLOWED THE DEDUCTION BEC AUSE ACCORDING TO HIM THE SAID AMOUNT WAS NOT PAID OVER BY THE ASSESSEE TO THE SUGAR FACTORIES AND WAS IN DISPUTE. IN THE APPEAL OF THE REV ENUE IN ITA NO 1592/PN/05, THE PART RELIEF ALLOWED BY THE COMMISSION ER OF INCOME-TAX (APPEALS) IS IN DISPUTE, WHEREAS IN THE CROSS-APPEAL OF T HE ASSESSEE IN ITA NO 1571/PN/05, IT HAS CLAIMED DEDUCTION OF THE AM OUNTS PAYABLE TO THE OTHER TWO SUGAR FACTORIES. THE ASSESSEE HAS ALSO SOUGHT TO ATTACK THE ASSESSMENT OF PROFIT ON SALE OF SUGAR BY ESTIMATING THE SAL E PRICE AT A HIGHER FIGURE THAN THE AMOUNT ACTUALLY REALISED BY TH E ASSESSEE. 6. IN THIS BACKGROUND OF THE MATTER, THE LEARNED COUNSE L FOR THE ASSESSEE POINTED OUT THAT FOLLOWING ADDITIONAL GROUND O F APPEAL IS SOUGHT TO BE RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL: ON THE FACTS AND IN LAW, 1. THE ADDITION ON ACCOUNT OF ALLEGED EXCESS SALE PRICE RE CEIVED BY THE APPELLANT ON SALE OF SUGAR IN DOMESTIC MARKET IS NOT JUSTIFIED AS ASSUMING WITHOUT ADMIT TING THAT THE APPELLANT HAD RECEIVED THE ALLEGED EXCESS SALE PROCEEDS ON SALE OF SUGAR IN DOMESTIC MAR KET, THE APPELLANT WAS UNDER AN OBLIGATION TO RETURN THIS EXCESS AMOUNT TO THE SUGAR SOCIE TIES AND ACCORDINGLY, THIS AMOUNT DID NOT CONSTITUTE INCOME IN THE HANDS OF THE APPELLANT. 5 IT IS SOUGHT TO BE MADE OUT THAT THE SAID ADDITIONAL G ROUND IS TO THE EFFECT THAT HAVING REGARD TO THE AGREEMENTS WITH THE THREE SU GAR FACTORIES ANY INCREMENTAL INCOME COMING TO THE ASSESSEE ON ACCOUNT OF SALE OF SUGAR IN THE DOMESTIC MARKET WAS LIABLE TO BE REFUNDED TO THE SUGAR FACTORIES AND, THEREFORE, NO INCOME CAN BE SAID TO ACCRUE IN TH E HANDS OF THE ASSESSEE ON ACCOUNT OF ADDITIONAL REALIZATION FROM SALE OF SUGAR IN THE DOMESTIC MARKET, SINCE IT REFLECTED A DIVERSION OF INCOME BY OVERRIDING TITLE IN FAVOUR OF THE SUGAR FACTORIES. THE LEARNED C OUNSEL POINTED OUT THAT ALL THE NECESSARY FACTS AND MATERIAL HAVING A BEARING O N THE AFORESAID QUESTION ARE A PART OF RECORD AND, THEREFORE, THE AD DITIONAL GROUND WHICH INVOLVES A PURE POINT OF LAW IS ADMISSIBLE FOR ADJUDICATIO N IN THE LIGHT OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION V. CIT 229 ITR 383 (SC) A ND ALSO THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CAS E OF AHMEDABAD ELECTRICITY SUPPLY CO. V. CIT 199 ITR 351 (BOM). 7. IT IS ALSO SUBMITTED THAT THE SALE PRICE ESTIMATED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IS ON A HIGHER SIDE, ESPECIALLY WHEN ASSESSEE FURNISHED COPIES OF SALE BILLS OBTAINED FRO M THE CUSTOMERS SHOWING SALES EFFECTED BY THE ASSESSEE AT LOWER PRICES. I T IS ALSO SUBMITTED THAT SUBSEQUENT TO THE ORDER OF THE COMMISSION ER OF INCOME- TAX (APPEALS), ASSESSEE HAD MADE EFFORTS TO OBTAIN FEW MO RE COPIES OF SALE BILLS TO SUBSTANTIATE ITS CLAIM AND IT IS PRAYED THAT SUCH EVIDENCES SHOULD ALSO BE CONSIDERED AT THIS STAGE FOR THE ADVANCEMEN T OF JUSTICE, FOLLOWING THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT PRABHAVATI S SHAH V CIT 231 ITR 1 (BOM). 6 8. IN THIS BACKGROUND, THE LEARNED COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE ASSESSEE WOULD BE SATISFIED AT THE PR ESENT STAGE IF THE AFORESAID MATTER IS REMITTED BACK TO THE FILE OF THE COMMISSIONER OF INCOME-TAX (APPEALS) FOR ADJUDICATION AFRESH. IT IS AL SO POINTED OUT THAT THE DEPARTMENT IN ITS APPEAL BY WAY OF GROUND NO 3 H AS RAISED AN ISSUE THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSING OFFICER. IN VIEW OF THE AFORESAID AND CONSIDERING THE AD DITIONAL GROUND NOW SOUGHT TO BE RAISED, IT IS SOUGHT TO BE JUSTIFIED T HAT THE MATTER BE REMANDED TO THE FILE OF THE COMMISSIONER OF INCOME-TAX (APPEALS) FOR A DECISION AFRESH. 9. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE HAS NOT SERIOUSLY DISPUTED THE ULTIMATE PRAYER OF THE ASSE SSEE OF SETTING ASIDE THE MATTER TO THE FILE OF THE COMMISSIONER OF IN COME-TAX (APPEALS) FOR ADJUDICATION AFRESH. SO, HOWEVER, IT IS POINTED OU T THAT THE ISSUE SOUGHT TO BE RAISED IN THE ADDITIONAL GROUND BY THE A SSESSEE IS BELATED AND SHOULD NOT BE ENTERTAINED. IT IS SUBMITTED THAT E VEN BEFORE THE ASSESSING OFFICER ADEQUATE OPPORTUNITY WAS AVAILABLE WITH THE ASSESSEE, BUT NO SUCH CLAIM HAS BEEN SET-UP, AND NEITHER THE SAME WAS RAISED BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS). 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. IN SO FAR AS THE ADMISSION OF THE ADDITIONAL GROUND IS CONCERNED, WE ARE OF THE OPINION THAT THE SAME INVOLVES A PURE POINT OF LAW AND ITS EFFICACY IS LIABLE TO BE TESTED ON THE BASIS OF MATERIAL, WHICH HAS BEEN THE SUBJECT- MATTER OF CONSIDERATION BY THE ASSESSING OFFICER AS WELL A S THE COMMISSIONER OF INCOME-TAX (APPEALS). THEREFORE, THE AD DITIONAL GROUND 7 NOW SOUGHT TO BE RAISED DOES NOT INVOLVE ANY FRESH INV ESTIGATION OF FACTS. MOREOVER, THE PROPOSITION SOUGHT TO BE MADE OUT ON T HE BASIS OF THE ADDITIONAL GROUND GOES TO THE ROOT OF THE MATTER AND , IN OUR VIEW, THE SAME IS REQUIRED TO BE EXAMINED SO AS TO DETERMINE THE CORRECT TAX LIABILITY OF THE ASSESSEE. FOLLOWING THE PARITY OF REAS ONING LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THE RMAL POWER CORPORATION (SUPRA), WE DEEM IT FIT AND PROPER TO A DMIT THE ADDITIONAL GROUND FOR ADJUDICATION ON MERITS, SINCE THE SAME INVOLVE S A POINT OF LAW WHICH DOES NOT REQUIRE ANY FRESH INVESTIGATION OF FACTS A ND IS ALSO PERTINENT TO ASSESS THE CORRECT TAX LIABILITY OF THE ASSESSE E. AS A CONSEQUENCE TO OUR AFORESAID DECISION, WE ALSO FIND WEIG HT IN THE PRAYER OF THE ASSESSEE THAT THE MATTER REGARDING ADDITION ON ACCOUNT OF SALE OF EXPORT QUOTA OF SUGAR IN THE DOMESTIC MARKET BE REVISITED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) AFRESH IN ACCORDANCE WI TH LAW. THEREFORE, WE REMIT THE ENTIRE MATTER TO THE FILE O F THE COMMISSIONER OF INCOME-TAX (APPEALS) FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. NEEDLESS TO SAY, THE COMMISSIONER OF INCOME-TAX (APPEALS) SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE AND TH EN ADJUDICATE UPON THE ISSUE AFRESH AS PER LAW. THUS, ON THIS ISSUE ASSESSE E SUCCEEDS FOR STATISTICAL PURPOSES. 11. ANOTHER GROUND RAISED BY THE ASSESSEE IN ITA NO 1 571/PN/05 RELATES TO DISALLOWANCE OF RS 2,03,722/- SUSTAINED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON ACCOUNT OF INTEREST ON DELAYED PAYMENT OF EXCISE DUTY. IN BRIEF, THE FACTS ARE THAT ASSESSEE HAD PA ID INTEREST OF RS 10,11,266/- ON ACCOUNT OF DELAYED PAYMENT OF EXCISE DU TY. THE ENTIRE AMOUNT WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GRO UND THAT 8 INTEREST PAID WAS PENAL IN NATURE AND THUS NOT ALLOWAB LE IN TERMS OF EXPLANATION TO SECTION 37(1) OF THE ACT. THE COMMISSIONE R OF INCOME-TAX (APPEALS) HAS IN PRINCIPLE DISAGREED WITH THE ASSESSING OF FICER AND HELD THAT THE INTEREST PAID UNDER SECTION 11AB OF THE CENT RAL EXCISE ACT, 1944 IS COMPENSATORY IN NATURE AND, THEREFORE, WAS NOT HIT BY EXPLANATION TO SECTION 37(1) OF THE ACT. HOWEVER, HE DISALLOWED RS 5,94 9/- ON THE GROUND THAT NO EVIDENCE OF THE PAYMENT WAS PRODUCED, AND FURTHER RS 76,690/- AND RS 1,21,083/- HAVE BEEN DISALLOWED ON THE GROUND THAT THE SAID PAYMENTS HAVE BEEN MADE AFTER THE DUE DATE OF FIL ING RETURN. AS A RESULT, THE COMMISSIONER OF INCOME-TAX (APPEALS) ALLOWED RS 8,07,544/- AND DISALLOWED RS 2,03,722/-. 12. THE ASSESSEE IS IN APPEAL ON THE SUSTENANCE OF DISALLO WANCE OF RS 2,03,722/-, WHEREAS THE REVENUE BY WAY OF GROUND NO 1 IN ITA NO 1592/PN/05 IS CONTESTING THE RELIEF ALLOWED BY THE CO MMISSIONER OF INCOME-TAX (APPEALS). 13. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS ONLY OBJECTED TO THE DISALLOWANCE OF RS 76,690/- BY POINTIN G OUT THAT THE SAME WAS PAID ON 7.12.2001, I.E. BEFORE THE DUE DATE OF F ILING OF THE RETURN AND, THEREFORE, IN TERMS OF SECTION 43B THE SAME COULD NOT BE SUBJECTED TO DISALLOWANCE. IN SO FAR AS THE RELIEF ALLOWED BY THE C OMMISSIONER OF INCOME-TAX (APPEALS) IS CONCERNED, THE LEARNED COUNSEL RELIED UPON THE FOLLOWING JUDGMENTS TO SUBMIT THAT INTEREST PAID ON DE LAYED PAYMENT OF EXCISE DUTY IS NOT PENAL, BUT COMPENSATORY IN NATURE: I) MAHALAXMI SUGAR MILLS CO. V CIT 123 ITR 429 (DEL); II) PRAKASH COTTON MILLS P LD. V CIT 201 ITR 684 (SC); III) CIT V AHMEDABD COTTON MFG. CO. LTD. 205 ITR 163 (SC); AND 9 IV) SOUTHERN ELECTRODES LTD V ACIT 111 ITD 1 (HYD.). 14. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL RE PRESENTATIVE HAS ASSAILED THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) BY POINTING OUT THAT EVEN INTEREST PAID ON ACCOUNT OF DEL AYED PAYMENT OF EXCISE DUTY IS PENAL IN NATURE AND IS, THEREFORE, NOT ALLOWABLE AS A DEDUCTION IN TERMS OF EXPLANATION TO SECTION 37(1) OF T HE ACT. 15 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN VIEW OF TH E JUDGMENTS BROUGHT OUT BY THE ASSESSEE AND ALSO THE ANALY SIS OF THE RELEVANT PROVISIONS MADE OUT BY THE COMMISSIONER OF INCOM E-TAX (APPEALS) IN THE IMPUGNED ORDER, WE FIND THAT THE IN TEREST PAID BY THE ASSESSEE ON ACCOUNT OF DELAYED PAYMENT OF EXCISE DUTY CANNO T BE CONSIDERED AS PENAL IN NATURE SO AS TO JUSTIFY INVOKING OF EXPLANATION TO SECTION 37(1) OF THE ACT. TO THAT EXTENT, WE AFFIRM TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). IN SO FAR AS THE PL EA OF THE ASSESSEE THAT IT HAS PAID RS 76,690/- BEFORE THE DUE DATE OF FILING OF THE RETURN AND THUS THE SAME COULD NOT BE DISALLOWED UNDER SECTION 43B IS CONCERNED, WE REMIT THIS MATTER TO THE FILE OF THE ASSESS ING OFFICER FOR VERIFICATION AND PASSING AN APPROPRIATE ORDER THEREOF. IN SO FAR AS DISALLOWANCE RS 5949/- AND RS 1,21,083/- UPHELD BY TH E COMMISSIONER OF INCOME-TAX (APPEALS) IS CONCERNED, THE SAME ARE CONFIR MED IN THE ABSENCE OF ANY PLEA RAISED ON THIS ACCOUNT. THUS, WHEREAS GROUND NO. 5 RAISED BY THE ASSESSEE IS PARTLY ALLOWED, GROUND NO. 1 RA ISED BY THE REVENUE IN ITS APPEAL IS DISMISSED. 16. THE LAST GROUND IN ASSESSEES APPEAL RELATES TO THE ADDITION OF RS 10,85,927/- MADE ON ACCOUNT OF INTEREST FROM FDRS. BEFORE US, THE LEARNED COUNSEL SUBMITTED THAT BECAUSE THE RELEVANT BOO KS OF ACCOUNT 10 WERE DESTROYED IN FIRE, ASSESSEE COULD NOT PRODUCE THE N ECESSARY EVIDENCE BEFORE THE LOWER AUTHORITIES AND ONE MORE OP PORTUNITY MAY BE GIVEN TO THE ASSESSEE TO EXPLAIN THE CASE BEFORE THE COMMI SSIONER OF INCOME-TAX (APPEALS). AFTER HAVING CONSIDERED THE SUBMISSIO NS OF BOTH THE SIDES, WE FIND NO REASON TO INTERFERE WITH THE OR DERS OF THE AUTHORITIES BELOW ON THIS ASPECT OF THE MATTER. WE ACCORDINGLY AFFIR M THE DECISION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND DISMISS THIS G ROUND OF APPEAL OF THE ASSESSEE. 17. IN THE RESULT, ASSESSEES APPEAL IN ITA NO 1571/PN/0 5 IS PARTLY ALLOWED. 18. IN ITA NO 1592/PN/05 FILED BY THE REVENUE FOR T HE SAME ASSESSMENT YEAR 2002-03, THE MAIN ISSUE RELATES TO THE RE LIEFS ALLOWED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IN RESPECT OF TH E REDUCTION IN SALE PRICE OF SUGAR SOLD IN DOMESTIC MARKET AND THE DEDUCT ION OF RS 41,12,929/- REPRESENTING PAYMENT MADE TO AGASTI SSK L TD., WHILE COMPUTING THE ADDITION ON ACCOUNT OF SUPPRESSED PROFITS F ROM SALE OF SUGAR IN DOMESTIC MARKET. ON ACCOUNT OF OUR DECISION IN TH E CROSS-APPEAL OF THE ASSESSEE IN ITA NO 1571/PN/05 TO REMIT THIS ISSUE BACK TO THE FILE OF THE COMMISSIONER OF INCOME-TAX (APPEALS), THE ISSUES RAISED IN THE APPEAL OF THE REVENUE ARE LIABLE TO BE REVISITED BY T HE COMMISSIONER OF INCOME-TAX (APPEALS) FOR FRESH ADJUDICATION. THE ONLY OTHER ISSUE IN THE APPEAL RELATES TO THE DISALLOWANCE OF INTEREST ON DE LAYED PAYMENT OF EXCISE DUTY WHICH HAS BEEN DEALT BY US WHILE ADJUDICATI NG THE CROSS- APPEAL OF THE ASSESSEE IN ITA NO 1571/PN/05. 19. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO 1 592/PN/05 IS PARTLY ALLOWED. 11 20. I.T.A NO 1875/PN/05 IS AN APPEAL BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (AP PEALS)-I, NASHIK DATED 24.10.2005, WHICH IN TURN HAS ARISEN OUT OF THE ORDER OF THE ASSESSING OFFICER DATED 23.8.2005 GIVING EFFECT TO THE APP ELLATE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DATED 29.7.2005 . THE REVENUE HAS CONTESTED THE DIRECTION OF THE COMMISSIONER O F INCOME-TAX (APPEALS) IN ALLOWING DEDUCTION FOR RS 41,12,929/- PAI D TO AGASTI SSK LTD., FOLLOWING HIS ORDER DATED 29.7.2005. 21. SINCE THE ORIGINAL ORDER OF THE COMMISSIONER OF IN COME-TAX (APPEALS) DATED 29.7.2005 HAS BEEN SET ASIDE FOR RE-ADJUDICATION IN THE EARLIER CAPTIONED PROCEEDINGS, THE IMPUGNED PROCEEDINGS IN TH E INSTANT APPEAL HAVE BECOME INFRUCTUOUS. AS A RESULT THEREOF, THE IMPUGNE D APPEAL OF THE REVENUE IS INFRUCTUOUS. 22. RESULTANTLY, ITA NOS 1571/PN/05 AND 1592/PN/05 AR E PARTLY ALLOWED, AND ITA NO 1875/PN/05 IS DISMISSED AS INFRUCTUOUS. DECISION WAS PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF JUNE, 2011. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE: DATE 30TH JUNE, 2011 B COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-I, NASHIK 4. THE CIT-I, NASHIK 4. THE D.R, B BENCH, PUNE 5. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, NAGPUR BENCH, NAGPUR 12