DCIT Cir 15(1), V. Rattan Vanaspati Ltd.,

ITA 1711/DEL/2008

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5510 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 11-03-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 05-05-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BANITA NAREEN
• Assessee Lawyers: M K MADAAN
• Keywords: Additional evidence; Bad and doubtful debts
• Section: 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 1711/DEL/2008 ASSESSMENT YEAR: 2003-04 DCIT, CIRCLE 15(1), C.R. BLDG., I.P. ESTATE, NEW DELHI. VS. M/S RATTAN VANASPATI LTD., B-26, SECTOR-9, NOIDA. AAACR4322B (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. BANITA NAREEN, SR. DR RESPONDENT BY: SH. M.K. MADAAN, CA O R D E R PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DI RECTED AGAINST THE ORDER OF CIT(A) DATED 26.02.08 FOR A.Y. 2003-04. G ROUNDS OF APPEAL READ AS UNDER: - 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF EXCISE DUTY TO THE T UNE OF RS. 2,23,699/-. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE C IT(A) HAS ERRED IN ALLOWING BAD DEBTS OF RS. 16,63,284/- MADE THROUGH COMPUTATION OF LOSS BEYOND TIME LIMIT GIVEN U/S 139(5) OF THE I .T. ACT. 3. THE APPELLANT CRAVES TO BE ALLOWED TO AMEND, DEL ETE OR ADD ANY OTHER GROUNDS OF APPEAL DURING THE COURSE OF HEARIN G OF THIS APPEAL. 2. APROPOS GROUND NO. 1 THE ASSESSEE ORIGINALLY HAD FILED RETURN COMPUTING LOSS AT AN AMOUNT OF RS. 1,61,66,428/- AN D LATER ON REVISED COMPUTATION WAS FILED AT A LOSS OF RS. 1,51,77,130/ - WHICH ACCORDING TO 2 ITA NO. 1711/DEL/2008 AO COULD NOT BE CONSIDERED AS THE SAME WAS BEYOND T HE PERIOD PRESCRIBED AS ENUMERATED IN SEC. 139(5) OF THE INCO ME TAX ACT, 1961. THE ISSUE RELATING TO DISALLOWANCE ON ACCOUNT OF EX CISE DUTY OF A SUM OF RS. 2,23,599/- HAS BEEN DISCUSSED BY AO IN PARA 5 P AGE 5 OF THE ASSESSMENT ORDER AND ACCORDINGLY THE CLAIM OF THE A SSESSEE REGARDING EXCISE DUTY OF RS. 2,23,599/- WAS DISALLOWED. BEFO RE CIT(A) IT WAS SUBMITTED THAT IN THE EARLIER RETURN A SUM OF RS. 2 7,85,064/- WAS DEBITED IN THE PROFIT AND LOSS ACCOUNT. HOWEVER, AT THE TI ME OF AUDIT, IT WAS SEEN THAT ASSESSEE DID NOT INCLUDE EXCISE DUTY IN ITS VA LUATION OF CLOSING STOCK OF A SUM OF RS. 2,25,705/-. THEREFORE, IN THE REVI SE COMPUTATION AN AMOUNT OF RS. 2,25,705/- WAS OFFERED WHICH WAS ADDE D BY THE AO, WHEREAS THE CLAIM OF THE SAME WAS MADE ON THE DEBIT SIDE OF THE PROFIT AND LOSS ACCOUNT WHICH IS REJECTED BY AO. THE DIFF ERENCE OF RS. 2,25,705/- IN THE CLOSING STOCK AND THE CLAIM OF RS . 2,23,599/- IS OF 2,106/- WHICH OF CLOSING BALANCE IN PLA AND THUS, I T WAS SUBMITTED THAT AO COULD NOT ADOPT DIFFERENT STANDARD OR DIFFERENT YARDSTICKS WHEN HE ACCEPTED THE SURRENDER OF RS. 2,25,705/- AND REJECT ED THE CLAIM OF RS. 2,23,599/- BOTH ON ACCOUNT OF EXCISE DUTY. ACCEPTI NG THESE SUBMISSIONS LD. CIT(A) HAS DELETED THE ADDITION. 3. LD. DR POINTED OUT THAT LD. CIT(A) HAS DELETED T HE ADDITION WITHOUT EXAMINING THE FACT THAT WHETHER OR NOT THE ASSESSEE HAD MADE THE PAYMENT OF EXCISE DUTY WITHIN THE STIPULATED TIME A ND THUS, CIT(A) WAS WRONG IN DELETING THE ADDITION. 3 ITA NO. 1711/DEL/2008 4. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. AR TH AT THE PAYMENT OF EXCISE DUTY WAS MADE IN THE MONTH OF APRIL OF THE P ROCEEDING YEAR AND MUCH BEFORE THE DUE DATE OF FILING THE RETURN. HE SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED BACK TO THE FILE OF AO WITH A DIRECTION TO DELETE THE AMOUNT IF THE ASSESSEE IS A BLE TO SHOW THE PAYMENT OF THE SAME BEFORE THE DUE DATE OF FILING O F THE RETURN. 5. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOT H THE PARTIES, WE RESTORE THIS ISSUE TO THE FILE OF AO WITH A DIRECTI ON TO GIVE OPPORTUNITY TO THE ASSESSEE TO FILE THE EVIDENCE OF HAVING PAID TH E SAID EXCISE DUTY BEFORE THE DUE DATE OF FILING THE RETURN. IF ASSES SEE IS ABLE TO PRODUCE SUCH EVIDENCE THEN NO ADDITION WILL BE MADE ON THIS ACCOUNT AND IF IT IS OTHERWISE THEN HE WILL RE-DECIDE THIS ISSUE AS PER PROVISIONS OF LAW. 6. APROPOS GROUND NO. 2 THE AO DISALLOWED THE CLAIM FIRSTLY ON THE GROUND THAT IN THE REVISE COMPUTATION IT COULD NOT BE CLAIMED AND ON THE SECOND ISSUE THAT ASSESSEE DID NOT PROVE THAT THE D EBT IN ITSELF HAD BECOME BAD. IT IS SEEN FROM THE ORDER OF CIT(A) TH AT CERTAIN ADDITIONAL EVIDENCES WERE FILED BY THE ASSESSEE BEFORE HIM WHI CH WERE FORWARDED TO THE AO FOR HIS COMMENTS BUT AO AT THE OUTSET AGI TATED THE ADMISSION OF SUCH EVIDENCE ON THE GROUND THAT REASONABLE AND SUFFICIENT OPPORTUNITIES WERE GIVEN TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, HE HAS NOT COMMEN TED UPON THE MERITS OF THE POSITION. IT WAS THE CASE OF THE ASS ESSEE BEFORE LD. CIT(A) THAT THE BAD DEBT WHICH HAS BEEN WRITTEN OF REPRESE NT THE AMOUNT OUTSTANDING OUT OF SALES MADE BY THE ASSESSEE TO TH E SAID PARTY. 4 ITA NO. 1711/DEL/2008 HOWEVER, DURING THE COURSE OF HEARING OF PRESENT AP PEAL LD. AR OF THE ASSESSEE COULD NOT STATE ABOUT THE PARTICULARS OF B AD DEBTS THAT WHAT IS THE NAME OF THE PARTY AND IN WHOSE NAME SUCH BALANC E WAS OUTSTANDING AS THE SAID NAME WAS NOT EVEN FOUND PLACE EITHER IN THE ORDER OF AO OR CIT(A). HOWEVER, CONSIDERING THE INTEREST OF JUSTI CE, AFTER HEARING BOTH THE PARTIES, WE CONSIDER IT APPROPRIATE AND JUSTIFI ED TO RESTORE THIS ISSUE TO THE FILE OF AO WITH A DIRECTION TO RE-ADJUDICATE THE ISSUE AS PER PROVISIONS OF LAW AFTER GIVING THE ASSESSEE A REASO NABLE OPPORTUNITY OF HEARING. WE DIRECT ACCORDINGLY. FOR STATISTICAL P URPOSES THIS GROUND IS TREATED TO BE ALLOWED. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 19.03.2010 (R.C. SHARMA) ACCOUNTANT MEMBER (I.P. BANSAL) JUDICIAL MEMBER DATED: 19.03.2010 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR