The Dharmapuri Roller Flour Mills, Salem V. ITO, Salem

ITA 1803/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90440 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 21-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS
• Assessee Lawyers: T VASUDEVAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . ! , ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A. NO.1803/MDS/2013. ( / ASSESSMENT YEAR : 2007-2008) THE DHARMAPURI ROLLER FLOUR MILLS, 297, MAIN RAOD, SHEVAPET, SALEM 636 002 [PAN: AABFT 7188F] ( %& /APPELLANT) VS THE INCOME TAX OFFICER, WARD I(2), SALEM ( '(%& /RESPONDENT) / APPELLANT BY : SHRI. T. VASUDEVAN, ADVOCATE / RESPONDENT BY : SHRI. A.V. SREEKANTH, IRS, JCIT /DATE OF HEARING : 21.05.2015 !' /DATE OF PRONOUNCEMENT : 29.05.2015 ) / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, DATED 29.07.2013 FOR THE ASSESSMENT YEAR 2007-2008. I.T.A.NO.1803/MDS/2013. :- 2 -: 2. THE ASSESSEE FILED THE FOLLOWING GROUNDS OF APPEALS ;- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS), SALEM IN CONFIRMING THE DISALLOWANCES OF 3,68,318/- AS PER ASSESSING OFFICER REMANDED REPORT IS BAD IN LAW AND AGAINST FACTS OF THE CASE. 2. THE APPELLANT CLAIMED EXPENSES RELTING TO IMPORT OF WHEAT THROUGH M/S. PEC LTD (A GOVERNMENT OF INDIA UNDERTAKING). THE APPELLANTS MADE ALL THE PAYMENTS DEMANDED BY PEC LTD THROUGH CHEQUES THE TOTAL NET PAYMENTS MADE WAS 55,98,273/- OUT OF THIS A SUM OF 3,86,318/- IS DISALLOWED. 3. 3,86,318/- BEING EXPENSES RELATED TO PURCHASES MADE IS AN ALLOWABLE EXPENDITURE INCURRED. THEREFOR E, THE ORDER OF CIT(APPEALS), SALEM CONFIRMING THE ADDITIO N BE SET ASIDE FOR REASONS STATED AND THAT MAY BE ADDUCED AT THE TIME OF HEARING AND JUSTICE RENDERED. 3. AT THE TIME OF HEARING, THE LD. AUTHORISED REPRESEN TATIVE FOR ASSESSEE DID NOT PRESS GROUND NOS. 2 & 3. THEREFORE , THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 4. COMING TO THE GROUND NO.4, THE FACT RELATING TO TH E ISSUE ARE THAT THE ASSESSEE CLAIMED AN EXPENDITURE OF E28,92, 822/- TOWARDS IMPORT EXPENSES. SINCE THE ASSESSEE HAS NOT PRODUC ED THE BILLS OR INVOICES OR ANY OTHER SUPPORTING MATERIAL IN RESPEC T OF THIS EXPENDITURE, THE SAME WAS DISALLOWED BY THE ASSESSI NG OFFICER. BEFORE THE FIRST APPELLATE STAGE, THE ASSESSEE PRODUCED CE RTAIN EVIDENCE IN SUPPORT OF THE CLAIM. THE COMMISSIONER OF INCOME T AX (APPEALS) I.T.A.NO.1803/MDS/2013. :- 3 -: ASKED THE ASSESSING OFFICER TO EXAMINE THE SAME AND SUBMIT A REPORT. THE ASSESSING OFFICER HAS SUBMITTED A DETAILED REPO RT AS UNDER:- DURING THE COURSE OF ASSESSMENT, THE ASSESSEE HAS NOT PRODUCED BILL/VOUCHERS IN SUPPORT OF EXPENSES CLAIM ED 28,92,822/-. HENCE, THE EXPENSES DISALLOWED IN THE ORIGINAL ASSESSMENT ORDER DATED 30.12.2009. AGGRIEVED OVER T HE ADDITION THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSEE WAS REQUIRED TO PRODUCE MATERIAL EVIDE NCE IN SUPPORT OF E28,92,822/-. THE ASSESSEE FIRM PURCHASED WHEAT FR OM PEC LTD, IN TWO INVOICES FOR E2,49,16,045/- AND E2,50,41,501/-. ON VERIFICATION OF INVOICES THERE WERE NO EXPENSES INCLUDED. THE EXPE NSES WERE REIMBURSEMENT BY THE COMPANY OUT OF ADVANCES MADE B Y THE ASSESSEE FIRM ON VARIOUS DATES. ACCORDING TO THE DEBIT NOTE DETAILS OF REIMBURSEMENT OF EXPENSES AS UNDER:- 02.03.2007 DEBIT NOTE : E27,05,452/- 31.03.2007 DEBIT NOTE : E25,06,503/- ---------------- E52,11,955/- ----------------- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER ACCEPTED E27,05,452/- AND E25,06,503/- WAS NOT ACCE PTED AS NO EVIDENCE PRODUCED. 4.1 THE ASSESSEE CLAIMED E28,92,821/- AS REIMBURSEM ENT OF EXPENSES FOR WHICH A DEBIT NOTE FOR E25,06,503/- WA S PRODUCED. THE I.T.A.NO.1803/MDS/2013. :- 4 -: ASSESSEE ALSO CLAIMED THAT THE ADVANCE MONEY OF E4, 75,000/- AS REIMBURSEMENT EXPENSES. IF IT IS TAKEN INTO ACCOU NT TOTAL COMES TO E29,81,503/- AS AGAINST E28,92,821/-. ACCORDING TO TWO DEBIT NOTES EXPENSE ALLOWABLE E52,11,955/- ONLY. E27,05,452/- H AS ALREADY BEEN ALLOWED IN THE ORIGINAL ASSESSMENT. THE COMMISSION ER OF INCOME TAX (APPEALS) MAY BE CONSIDERED TO ALLOW THE OTHER DEBI T NOTE TOWARDS REIMBURSEMENT OF EXPENSES E25,06,503/- AND THE BALA NCE WAS DISALLOWED. THUS (E28,92,821 25,06,503/-) E3,86, 318 WAS DISALLOWED. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. AT THE TIME OF HEARING, THE LD. AUTHORISED REPRESENTATIVE FOR ASSESSEE SUBMITTED THAT COMMISSI ONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN PLACING RELIANCE ON THE DEBIT NOTE TO THE TUNE OF E52,11,955/- WITHOUT GOING THROUGH THE DETAILS OF ENTIRE EXPENDITURE INCURRED BY THE ASSESSEE. ACCORDING TO THE LD. AUTHORISED REPRESENTATIVE FOR ASSESSEE THE COMMISSIONER OF INC OME TAX (APPEALS) HAS NOT APPRECIATED THE FACT IN PROPER PE RSPECTIVE THUS, THE MATTER NEEDS TO BE CONSIDERED AFRESH. I.T.A.NO.1803/MDS/2013. :- 5 -: 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE HAS NOT PUT SERIOUS OBJECTION FOR CONSIDERING THE PLEA OF THE ASSESSEE COUNSEL. 7. WE ARE OF THE OPINION THAT COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE EXPENDITURE INCURRED BY ASSESSEE IS ONLY E52,11,955/- ON THE BASIS OF TWO DEBIT NOTES. IN OUR OPINION, THE ENTIRE DETAILS OF EXPENDITURE TO BE SEEN AND THE SA ME IS TO APPRECIATED BY THE ASSESSING OFFICER AFRESH. ACCO RDINGLY, THE ISSUE WAS REMITTED BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH CONSIDERATION IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 29 TH DAY OF MAY, 2015, AT CHENNAI. SD/- SD/- ( . ! ) V. DURGA RAO ' / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ /CHENNAI. %& /DATED: 29.05.2015. KV &' () *) /COPY TO: 1. + APPELLANT 2. / RESPONDENT 3. , ( )/CIT(A) 4. , /CIT 5. )-. / /DR 6. .0 1 /GF. I.T.A.NO.1803/MDS/2013. :- 6 -: