Sri Gurukrupa Agro Industries, Nizamabad V. Dy. Commissioner of Income Tax , Circle-1, Nizamabad

ITA 1774/Hyd/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6486 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Assessment Year: 2015-2016
• Appeal Filed On: 03-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Section: 43B; 143(3); 37(1); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO .1774 /HYD/ 2018 ASSESSMENT YEAR: 20 15 - 16 SRI GURUKRUPA AGRO INDUSTRIES, NIZAMABAD. PAN: ABUFS 4528 A VS. DCIT, CIRCLE - 1, NIZAMABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI P. MURALI MOHAN RAO REVENUE BY: SRI NILANJAN DEY, DR DATE OF HEARING: 02.01 .201 9 DATE OF PRONOUNCEMENT: 11 . 01 .201 9 ORDER PER SMT. P. MADHAVI DEVI, J.M.: THIS IS ASSESSEES APPEALS FOR THE ASSESSMENT YEAR 2015 - 16 AGAINST THE ORDER OF THE CIT(A) - 5, HYDERABAD DATED 23.07.2018 FOR THE ASSESSMENT YEAR 2015 - 16. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) ERRED BOTH ON FACTS AND LAW IN UPHOLDING THE AS SESSMENT ORDER TO THE EXTENT IT IS PREJUDICIAL TO THE INTEREST OF APPELLANT. 2. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT A.O. ERRED IN LAW IN DISALLOWING THE EXPENDITURE CLAIMED TOWARDS VAT /CST AND OTHER HEADS MERELY RELYING ON A LETTER OF THE CTO ( COMMERCIAL TAX OFFICER) WHICH, IN ITSELF IS INCONCLUSIVE ON THE MATTER AND IS NON - COMMITTAL. 3. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT ON FACTS AND CIRCUMSTANCES OF THE CASE THE PROVISIONS OF SECTION 43B FIND NO APPLICATION TO THE CASE, AS THERE IS NO CONFIRMED DEMAND FROM THE VAT AUTHORITIES AND VAT AND CST RETURNS FILED BY THE APPELLANT ARE FOUND TO BE GENUINE BY THE SAID AUTHORITIES. 2 4. WITHOUT PREJUDICIAL TO THE ABOVE, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE HAS INCUR RED THE EXPENDITURE TOWARDS BUSINESS EXPEDIENCY AND SAME IS ALLOWABLE U/S 37(1) OF THE ACT. 5. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT ASSESSEE HAS SUBMITTED THE DETAILS REGARDING THE BILLS AND VOUCHERS WITH RESPECT TO BOOKS OF ACCOUNTS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RICE MILL FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 21,04,490/ - . AT THE TIME OF SCRUTINY PROCEEDINGS, A.O. NOTICED THAT THE ASSESSEE CLAIMED CST PAYMENTS OF RS. 11,2 5,426/ - AND VAT PAYMENTS OF RS. 74,97,596/ - IN THE PROFIT AND LOSS ACCOUNT. DURING ASSESSMENT PROCEEDINGS, ASSESSEE WAS ASKED TO FURNISH THE ORIGINAL CHALLANS TO THE SAID PAYMENT CLAIMS OF CST / VAT. IN RESPONSE, ASSESSEE COULD NOT FURNISH THE RELEVANT D ETAILS AS REQUIRED BY THE A.O. AND THEREFORE, ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT AND DISALLOWED THE CST AND VAT PAYMENTS OF RS. 86,23,022/ - BROUGHT IT TO TAX. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) NONE APPEARED ON BEHALF OF THE ASSESSEE AND NO DETAILS WERE FILED TO SUBSTANTIATE ITS CLAIM. THEREFORE, CIT(A) RELIED ON VARIOUS JUDGMENTS VIZ., CIT VS. B.N. BHATTACHARJEE (10 CTR 354), DECISION OF MP HIGH COURT IN THE CASE OF LATE TUKOJIRAOHOLKAR VS. CIT (223 ITR 480) AND CIT VS. MULTIPLAN (INDIA) PVT LTD (38 ITD 320) (DEL.) AND DISMISSED THE APPEAL EX PARTE . AGGRIEVED, ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS OF APPEAL. 4. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO CONFIRMED DEMAND FROM THE VAT AUTHORITIES AND THEY CONFIRMED THE VAT AND CST RETURNS FILED BY THE ASSESSEE AND CONSIDERED THEM AS GENU INE. HE FURTHER SUBMITTED THAT SINCE THE ASSESSEE HAS INCURRED THE SAID EXPENDITURE TOWARDS BUSINESS EXPEDIENCY, THE SAME IS ALLOWABLE U/S 37(1) OF THE ACT AND THE RELEVANT DETAILS REGARDING BILLS AND VOUCHERS 3 WITH RESPECT TO BOOKS OF ACCOUNT ARE SUBMITTE D TO THE REVENUE AUTHORITIES . LEARNED COUNSEL FOR THE ASSESSEE PLEADED THAT CONSIDERING THE ABOVE FACTUAL MATRIX OF THE CASE, THE ISSUE MAY BE REMANDED TO THE FILE OF THE CIT(A) AND THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO SUBSTANTIATE ITS CLAIM BEFORE THE FIRST APPELLATE AUTHORITY. 5. LEARNED DEPARTMENTAL REPRESENTATIVE IS ALSO HEARD, WHO RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND ON PERUSAL OF THE RECORD, WE FIND MERIT IN THE SUBMISSIONS MADE B Y THE LEARNED COUNSEL FOR THE ASSESSEE. ACCORDINGLY, WE GRANT ONE MORE OPPORTUNITY TO THE ASSESSEE TO PROVE ITS CASE BEFORE THE FIRST APPELLATE AUTHORITY AND REMIT THE MATTER TO THE FILE OF THE CIT(A). CIT(A) IS DIRECTED TO EXAMINE THE ISSUE AFRESH AND D ECIDE THE CASE ON MERITS IN ACCORDANCE WITH LAW. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY, 2019. SD/ - SD/ - (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 11 TH JANUARY, 2019 OKK COPY TO: - 1) SRI GURUKRUPA AGRI INDUSTRIES, C/O. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6 - 3 - 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD - 82. 2) DCIT, CIRCLE - 1, NIZAMABAD. 4 3) THE CIT(A) - 5 , HYDERABAD 4) THE PR. CIT - 5 , HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE