KNS Overseas Pvt.Ltd., Bangaluru V. The Deputy Commissioner Of Income Tax Circle -4 (1)(1), Bangaluru

ITA 1808/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7355 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 28-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER IT A NO . 1808 / BANG/ 2018 ASSESSMENT YEAR : 2012 - 13 KNS OVERSEAS PVT. LTD., NO.1788/C, ROC LAYOUT, 9 TH CROSS, 5 TH MAIN, VIJAYANAGAR 2 ND STAGE, BENGALURU 560 040. PAN: AADCK 3092J VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(5), BENGALURU. APPELLANT RESPONDENT APP E LLANT B Y : NONE RESPONDENT BY : SHRI C.H. SUN DAR RAO, CIT(DR - I), ITAT , BENGALURU. DATE OF HE ARING : 01 .05.2019 DATE OF PRONOUNCEMENT : 01 .05.2019 ORDER PER B.R. BASKARAN, ACCOUNTANT MEMBER THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING T HE ORDER DATED 29.12.2017 PASSED BY LD. CIT(APPEALS)-4, BANGALORE AND IT RELATES TO THE ASSESSMENT YEAR 2012-13. THE ASSESSEE IS CHALLENGI NG THE ADDITION OF RS.690.00 LAKHS MADE BY THE ASSESSING OFFICER AND C ONFIRMED BY LD. CIT(A). 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, EVEN TH OUGH THE NOTICE OF HEARING WAS SENT BY REGISTERED POST AND ALSO THROUG H THE REVENUE TO THE ITA NO.1808/BANG/2018 PAGE 2 OF 3 ASSESSEE. HENCE WE PROCEED TO DISPOSE OF THE APPEA L EX PARTE , WITHOUT THE PRESENCE OF THE ASSESSEE. 3. WE HEARD LD. D.R AND PERUSED THE RECORD. THE AO NOTICED THAT THE ASSESSEE HAS RECEIVED AN ADVANCE OF RS.690.00 LAKHS FROM ITS CUSTOMER FOR SUPPLY OF IRON ORE GOODS IN AN EARLIER YEAR. T HE ASSESSEE DISCLOSED THE SAME AS LIABILITY IN ITS BOOKS OF ACCOUNTS. THE AS SESSEE SUBMITTED THAT IT COULD NOT MAKE SUPPLIES TO THE CUSTOMER IN VIEW OF BAN IMPOSED BY THE HONBLE SUPREME COURT. THE AO NOTICED THAT THE ASS ESSEE IS MAINTAINING BOOKS OF ACCOUNTS ON MERCANTILE BASIS. THE ASSESSE E WAS ALSO HAVING STOCK OF IRON ORE OF RS.1367.48 LAKHS. THE AO ALSO NOTICED THAT THE BAN IMPOSED BY HONBLE SUPREME COURT IS ONLY IN RESPECT OF MINING ACTIVITY. ACCORDINGLY, THE AO TOOK THE VIEW THAT THERE WAS NO BAN FOR THE ASSESSEE TO SELL ITS EXISTING STOCK TO ITS CUSTOMER. THE AO ALSO NOTICED THAT THE BAN WAS LIFTED ON 05-04-2011. ACCORDINGLY, HE TOOK THE VIEW THAT THE ADVANCE AMOUNT OF RS.690.00 LAKHS SHOULD HAVE BEEN OFFERED BY THE ASSESSEE AS ITS INCOME. ACCORDINGLY, HE ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) ALSO CONFIRMED THE SAME. 4. WE NOTICE THAT THE AO HAS ASSESSED THE ABOVE SAI D AMOUNT ONLY FOR THE REASON THAT THERE IS NO BAN FOR SALE OF ITS EXI STING STOCK TO ITS CUSTOMERS. THE QUESTION OF RECOGNIZING AN ADVANCE AMOUNT AS TR ADING RECEIPT SHALL ARISE ONLY IF THERE IS CORRESPONDING MOVEMENT OF GO ODS RESULTING IN SALES. WE NOTICE THAT THE AO HAS NOT EXAMINED THIS ASPECT. FURTHER, THERE SHOULD NOT BE ANY DISPUTE THAT ENTIRE SALES AMOUNT CANNOT BE ASSESSED AS INCOME OF THE ASSESSEE, I.E., THE CORRESPONDING COST SHOUL D BE ALLOWED AS DEDUCTION. THIS POINT HAS ALSO ESCAPED THE ATTENTI ON OF THE AO. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THIS IS SUE REQUIRES FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD. CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE AO FOR ITA NO.1808/BANG/2018 PAGE 3 OF 3 EXAMINING THE SAME AFRESH. WE ALSO DIRECT THE ASSE SSEE TO FULLY CO- OPERATE WITH THE AO FOR COMPLETION OF SET ASIDE PRO CEEDINGS. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF MAY, 2019. SD/- SD/- (PAVAN KUMA R GADALE) ( B.R. BASKARAN ) JUDICIAL M EMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 1 ST MAY, 2019. / D ESAI S MURTHY / COPY TO: 1. APP ELL ANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANG ALORE. 6. GU ARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.