Sanskruti Wines , Ahmednagar V. Principal Commissioner of Income-Tax -1, Pune

ITA 193/PUN/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0095 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 20-05-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gross profit estimation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘B’ PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.193/PUN/2021 नधा रण वष / Assessment Year : 2015-16 Sanskruti Wines, Shop No.03, Darshan Palace, Gulmohar Road, Savedi, Ahmednagar, Maharashtra 414 003 PAN : AAKFV7888H Vs. Pr.CIT, Pune-1 Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP : This appeal by the assessee is directed against the order dated 19-03-2021 passed by the Pr.CIT, Pune u/s.263 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2015-16. 2. Briefly stated, the facts of the case are that the assessee is a wine merchant who furnished its return declaring total income of Rs.4,88,140/-. The assessment was made on total income of Rs.6,88,140/-, making an addition of Rs.2.00 lakh on account of Assessee by Shri Bharat Shah Revenue by Shri Sardar Singh Meena Date of hearing 24-08-2022 Date of pronouncement 24-08-2022 ITA No.193/PUN/2021 Sanskruti Wines 2 low gross profit. The ld. Pr.CIT noticed that the case was selected for complete scrutiny through Computer Aided Scrutiny Selection (CASS). He observed that the assessee debited payment of license fee to State Excise department, which had two components, namely, Rs.5,07,450/- towards regular license fee and Rs.3,11,604/- being 1/5 th of Rs.15,58,020/- towards transfer fees paid in connection with the transfer of license from one concern to another. It was opined that the regular license fee was deductible but the amount of transfer fee paid by the assessee in connection with the transfer of license from one concern to another concern was in the nature of capital expenditure and hence ought to have been disallowed u/s.37(1) of the Act. As the Assessing officer (AO) had not examined this issue, the ld. Pr. CIT set-aside the assessment order and remitted the matter to the file of the AO for examining it afresh. Aggrieved thereby, the assessee has come up in appeal before the Tribunal 3. After considering the rival submissions and perusing the relevant material on record, it is seen that the assessee paid two types of license fees. There is no dispute on the deductibility of the regular license fee. The assessee also transferred license of one concern with another for which it had to pay transfer fee to State ITA No.193/PUN/2021 Sanskruti Wines 3 Excise department amounting to Rs.15.58 lakh. Treating the same as preliminary expenditure, the assessee debited its Profit and loss account with 1/5 th of such amount for the year under consideration. The case of the ld. Pr. CIT is that such transfer fees is capital expenditure and hence cannot be allowed as deduction. It is seen that the AO did not examine the license transfer fee during the course of assessment proceedings. The ld. AR also could not point out any case law on the point for allowing such deduction. This shows that the AO ought to have examined this aspect from the angle of deductibility, which he did not. In view of the fact that the ld. Pr.CIT has simply directed the AO to examine this issue afresh and the assessee will have ample opportunity to put across its point of view, we hold that no interference is warranted in the impugned order. We, therefore, countenance the impugned order on this score. 4. In the result, the appeal is dismissed. Order pronounced in the Open Court on 24 th August, 2022. Sd/- Sd/- (S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 24 th August, 2022 सतीश ITA No.193/PUN/2021 Sanskruti Wines 4 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. The Pr.CIT-1, Pune 4. DR, ITAT, ‘B’ Bench, Pune 5. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 24-08-2022 Sr.PS 2. Draft placed before author 24-08-2022 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *