Evergreen Drumps & Cans Pvt Ltd., Howrah V. D.C.I.T Cir - I,kolkata., Kolkata

ITA 186/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5009 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 28-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D LAHIRI
• Assessee Lawyers: D NIYOGY
• Keywords: Non compliance
• Section: 143(3); 142(1); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C, KOLKATA (BEFORE SHRI P. M. JAGTAP, A.M. & SHRI S.S.VISWANET HRA RAVI, J.M.) ITA NO. 186/KOL/2013 : ASSTT. Y EAR : 2009-2010 EVERGREEN DRUMS & CONS PVT. LTD. PAN: AAACE 5344E VS DCIT, CIRCLE-1, KOLKATA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.NIYOGY, FCA RESPONDENT BY : SHRI D. LAHIRI , JCIT, SR.DR DATE OF HEARING : 29.01.2016 DATE OF PRONOUNCEMENT : 26-04-2016 ORDER PER SHRI S.S.VISWANETHRA RAVI, J.M . THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31.12.2012 PASSED BY THE CIT(A)-XXIV, KOLKATA FOR THE ASSESSME NT YEAR 2009-10 PASSED UNDER SECTION 143(3) OF THE I.T.ACT. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS: 1.A) THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEAL) WAS NOT JUSTIFI ED IN REDUCING THE DISALLOWANCE UNDER THE HEAD MISCELLANEOUS EXPENSES TO RS.1,00,000/= FROM RS.4,46,975/=. (B) THAT THE APPELLANT SUBMITS THAT THERE SHOULD NO T BE ANY DISALLOWANCE UNDER THE HEAD MISCELLANEOUS EXPENSES AS THE ENTIRE EXPENDITURE UNDER THIS HEAD WERE INCURRED FOR WHOLLY AND EXCLUSIVELY FOR T HE PURPOSE OF BUSINESS. 2.A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEAL) WAS NOT JUSTIFI ED IN CONFIRMING THE REJECTION OF APPELLANT'S CLAIM FOR DEDUCTION U/S. 8 01B OF THE INCOME TAX ACT. (B) THAT THE APPELLANT SUBMITS THAT THE ASSESSEE WA S PREVENTED BY SUFFICIENT CAUSES FOR THE ALLEGED NON COMPLIANCE AND AS SUCH F ROM THE POINT OF EQUITY 2 ITA NO.186/KOL/2013 E VERGREEN DRUMS & CONS PVT. LTD. ASSESSMENT YEAR: 2009-10 AND JUSTICE FURTHER OPPORTUNITY SHOULD BE GIVEN TO TNE ASSESSEE SUBMITTING THE FORM NO. 10CCB IN SUPPORT OF ITS CLAIM U/S. 80LB OF THE INCOME TAX ACT. 3. THAT THE APPELLANT CRAVE RESERVE ITS-SELF TO ADD , AMEND OR ALTER ANY GROUNDS OF APPEAL OR THE WHOLE OF IT AT THE TIME OF THIS APPEAL HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING DRUMS AND CANS. THE RETUR N OF INCOME WAS FILED DISCLOSING THE TOTAL INCOME OF RS.79,73,658/-. NOTI CES UNDER SECTION 143(2) AND 142(1) OF THE ACT ISSUED AND IN RESPONSE TO SUCH NO TICES, THE A.R. FILED VARIOUS RELEVANT DOCUMENTS BEFORE THE AO. 4. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE INCURRED A SUM OF RS.4,46,975/- FOR FACTORY MISCELLANEOUS EXPE NSES AND FOR NOT FILING SUPPORTING DOCUMENTS NOR ANY EXPLANATION, ADDED BAC K TO THE TOTAL INCOME OF THE ASSESSEE. 5. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE CONTEN DED THAT THE DETAILS OF MISCELLANEOUS EXPENSES WERE FURNISHED TO THE AO, BU T, HOWEVER, THE AO DID NOT PROPERLY EXAMINE THE DETAILS DURING THE COURSE OF A SSESSMENT PROCEEDINGS, NOR ASK FOR ANY SPECIFIC DETAILS REGARDING THE FACTORY MISC ELLANEOUS EXPENSES. THE CIT(A) RESTRICTED THE DISALLOWANCE ON MISCELLANEOUS EXPENS ES UPTO RS.1,00,000/- AGAINST THE CLAIM OF RS.4,46,975/-. 6. IN SECOND APPEAL BEFORE THIS TRIBUNAL, LD. COUNS EL FOR THE ASSESSEE CONTENDED THAT THE DETAILS OF FACTORY MISCELLANEOUS EXPENSES WERE SUBMITTED BEFORE THE CIT(A), HAVING EXAMINING AND VERIFYING THE SAME RESTRICTED THE SAME UPTO RS.1,00,000/- ON THE BASIS OF ESTIMATION AND IT IS NOT PERMISSIBLE A S PER LAW. FURTHER HE DREW OUR ATTENTION TO THE ANNEXURE-C PLACED IN PAPER BOOK AND LD. D.R. RELIED ON AOS ORDER. 3 ITA NO.186/KOL/2013 E VERGREEN DRUMS & CONS PVT. LTD. ASSESSMENT YEAR: 2009-10 7. HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE CONTENTION OF THE ASSESSEE IS THAT ALL THE DETAILS WERE SUBMITTED BEFORE THE AO, BUT DID NOT CONSIDER THE SAME ON THE GROUND THAT THERE WAS NO BREAK-UP OF FACTORY EXPENSES AS IT WAS PRODUCED UNDER THE HEAD OF MISCE LLANEOUS WHERE, THE ASSESSEE HAS SHOWN THE FACTORY MISCELLANEOUS EXPENSES UNDER THE SUB-HEAD . THE BREAK-UP OF SAID EXPENSES WERE PRODUCED BEFORE THE CIT(A) AS SE EN IN ANNEXURE-C. WE FIND THAT THE ASSESSEE INCURRED THE SAID EXPENSES FOR PACKING FINISHED GOODS WITH BOPP TAPE MATERIAL AT THREE DIFFERENT LOCATIONS AT KOLKATA, C HITTOOR AND PONDICHERRY TO AN AMOUNT OF RS.4,46,975/-. THE SAID STATEMENT CONTAIN ING FACTORY MISCELLANEOUS EXPENSES WAS BEFORE THE LD. CIT(A) AND HAVING EXAMI NING THE SAME, HE RESTRICTED THE FACTORY MISCELLANEOUS EXPENSES UPTO RS.1,00,000/- O N THE BASIS OF ESTIMATION. IT IS OBSERVED THAT THE CIT(A) DID NOT GIVE REASONS AS TO WHY AND WHAT BASIS ESTIMATION WAS APPLIED HAVING EXAMINING THE STATEMENT OF EXPEN SES. IN THE ABSENCE OF SUCH REASONS AND TAKING INTO CONSIDERATION THE STATEMENT OF FACTORY MISCELLANEOUS EXPENSES AS IN ANNEXURE C, WE ARE OF THE VIEW THAT THE ORDER OF CIT(A) IS NOT JUSTIFIED IN RESTRICTING THE DISALLOWANCE UPTO RS.1 ,00,000/-. THE CLAIM OF RS.4,36,975/- AS IT WAS SHOWN IN ANNEXURE C INC URRED FOR THE PACKING OF FINISHED GOODS AND WE TREAT IT HAS BEEN INCURRED FOR THE PUR POSE OF BUSINESS ACTIVITY AND IT IS AN ALLOWABLE EXPENDITURE. THEREFORE, GROUND NO.1 IN VOLVING RS.1,00,000/- IS ALLOWED. 8. GROUND NO.2 RELATES TO A DEDUCTION OF RS.3,64,92 0/- UNDER SECTION 80IB OF THE ACT. THE AO DISALLOWED THE SAID AMOUNT FOR NON-SUBM ISSION OF FORM 10CCB. BEFORE THE CIT(A), IT WAS SUBMITTED THAT THE FORM 1 0CCB WAS CERTIFIED BY THE ASSESSEES AUDITOR, BUT FOR THE SUDDEN DEMISE OF SA ID AUDITOR IN JUNE 2010 AND DUE TO CLOSURE OF HIS FIRM OF M/S. T. DASGUPTA & CO THEREA FTER, THE ASSESSEE COULD NOT SUBMIT THE SAME BEFORE THE AO. THE CIT(A) CONFIRMED THE DISALLOWANCE OF RS.3,64,920/- MADE BY THE AO UNDER SECTION 80IB OF THE ACT. 4 ITA NO.186/KOL/2013 E VERGREEN DRUMS & CONS PVT. LTD. ASSESSMENT YEAR: 2009-10 9. BEFORE US, THE ASSESSEE REITERATED THE SUBMISSIO N MADE BEFORE THE CIT(A). THE LD. D.R. SUBMITTED THAT THE ASSESSEE FAILED TO FILE AUDIT REPORT AS FORMULATED UNDER FORM NO.10CCB BEFORE THE AO, AS WELL AS BEFORE THE LD. CIT(A) AND IT IS MANDATED IN ORDER TO CLAIM DEDUCTION. RELIED ON THE ORDERS O F BOTH THE AUTHORITIES BELOW. 10. HEARD SUBMISSIONS OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE FILED AN AUDIT REPORT CER TIFIED BY THE AUDITOR AS PER FORM NO.10CCB WITH A COVERING LETTER DATED 11.01.2006 AS IT IS PLACED AS IN PAPER BOOK ALONG WITH BALANCE-SHEET, PROFIT AND LOSS ACCOUNT A ND COMPUTATION OF INCOME BEFORE THIS TRIBUNAL. SINCE IT IS MANDATORY TO CLAIM DEDUC TION AS SUBMITTED BY THE LD.DR IN SUCH CIRCUMSTANCES, WE HAVE NO OTHER ALTERNATIVE EX CEPT TO REMAND BACK GROUND NO.2 FOR FRESH CONSIDERATION OF AO. ACCORDINGLY, WE REMI T THE FILE SPECIFICALLY ON GROUND NO.2 TO AO AND HE IS DIRECTED TO AFFORD AN OPPORTUN ITY TO AO TO FILE ANY MATERIAL EVIDENCE IN SUPPORT OF ITS CASE IN RESPECT OF GROUN D NO.2 TO DECIDE THE ISSUE AS PER LAW. THE ASSESSEE IS ALSO DIRECTED NOT TO SEEK ANY FURTHER ADJOURNMENTS BEFORE THE AO. THUS, GROUND NO.2 IS ALLOWED FOR STATISTICAL PU RPOSES. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES, AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH APRIL, 2016. SD/- SD/- ( P.M.JAGTAP) (S.S.VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26/04/2016 TALUKDAR/SR.PS 5 ITA NO.186/KOL/2013 E VERGREEN DRUMS & CONS PVT. LTD. ASSESSMENT YEAR: 2009-10 COPY OF ORDER FORWARDED TO: 1 EVERGREEN DRUMS & CONS PVT. LTD., 29, JANAKI DEVI J ALAN ROAD, HOWRAH- 711 204. 2 DCIT, CIRCLE-=1, KOLKATA 3 THE CIT(A), 4 5 CIT, 5. D.R. TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA