Mehsana Dist. Co-Op Milk Producers Union Ltd., Mehsana V. The ACIT, Circle Mehsana, Mehsana

ITA 195/AHD/2023

AI Insights

The case involves the Mehsana Dist Cooperative Milk Producers Union Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi. The appeal was concerning the addition of Rs. 3,26,150 to the assessee's income for the Assessment Year 2017-18, which was identified as a discrepancy between the interest income reported in the assessee's books and that reflected in Form No. 26AS. The Assessing Officer added this amount under Section 56 of the Income Tax Act, categorizing it as 'income from other sources'. The assessee contended that this amount was already accounted for in different ledgers, and its addition constituted double taxation. The Tribunal agreed with the assessee, noting that the Assessing Officer had overlooked some ledger accounts that contained the relevant entries.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125383 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-08-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 28-03-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 72; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I .T .A . No .1 95 /A h d / 20 23 ( A s se ss m e nt Y e a r : 20 17- 18 ) M e hs a na D is t C o op er a ti v e M ilk P r o d uc e r s U ni on L t d., D u d h s a g ar R es ea r c h & D ev el o p me nt A s so c ia ti on , D u d h s ag a r D a ir y, H i gh wa y, M e hs a n a- 3 8 40 0 2 V s . As s is ta nt C o m mi s s i one r of In c o me Ta x , Cir c l e M e hs an a, Me h s a na [ P A N N o. A A A A M 0 3 2 9F ] (Appellant) .. (Respondent) Appellant by : Shri S. N. Divatia, A.R. Respondent by: Shri Ashok Kumar Suthar, Sr. D.R. D a t e of H ea r i ng 23.08.2023 D a t e of P r o no u n ce me nt 13.09.2023 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax(Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre, (in short “NFAC”), Delhi in Order No. ITBA/NFAC/S/250/2022-23/1049433205(1) vide order dated 06.02.2023 passed for Assessment Year 2017-18. 2. The assessee has taken the following grounds of appeal:- “1.1 The order passed u/s.250 on 06.02.2023 for A.Y. 2017-18 by NFAC CIT(A), Delhi upholding the addition on account of interest income of Rs.3,26,150/- is wholly illegal, unlawful and against the principles of natural justice. ITA No. 195/Ahd/2023 Mehsana Dist Cooperative Milk Producers Union Ltd. vs. ACIT Asst.Year –2017-18 - 2– 1.2 The Ld. NFAC CIT(A) has grievously erred in law and or on facts in not appreciating that there was a sufficient cause for alleged failure to respond to the so called notices of hearing issued. 2.1 The Ld. NFAC CIT(A) grievously erred in law and on facts in confirming addition on account of interest income of RS.3,26,150/-. 2.2 That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have upheld the addition on account of interest income of Rs.3,26,150/-. It is already disclosed in books of accounts. It is, therefore, prayed that the addition of Rs.3,26,150/- upheld by the NFAC CIT(A) may kindly be deleted. ” 3. The brief facts of the case are that the assessee is engaged in the business of Milk Procurement, Milk Processing and sale of Milk etc. The assessee filed its return of income for A.Y. 2017-18 declaring total income of Rs. 7.87 crores. Thereafter, assessment proceedings were initiated against the assessee. During the assessment proceedings, the Assessing Officer observed that there is a difference of interest income as reflected in Form No. 26AS (73,82,483/-) and the amount of interest income as declared in the books of account (70,56,333/-). Accordingly, the Assessing Officer added the difference of Rs. 3,26,150/- to the total income of the assessee under Section 56 of the Act under the head “income from other sources”. 4. Thereafter, the assessee filed rectification application dated 30.12.2019 to the Assessing Officer in which it was contended that the assessee is having three different ledgers in which they have booked the interest income. ITA No. 195/Ahd/2023 Mehsana Dist Cooperative Milk Producers Union Ltd. vs. ACIT Asst.Year –2017-18 - 3– However, during the course of assessment, the Assessing Officer took into consideration only one general ledger (interest received – other bank), however, the Assessing Officer failed to consider interest income which has been booked by the assessee in the other ledgers relating to interest income maintained by the assessee. However, the said application was rejected by the Assessing Officer vide order dated 11.02.2020. Being aggrieved, the assessee preferred appeal to CIT(A) who dismissed the appeal of the assessee on the ground that there was no response to notices issued from time to time. Accordingly, the CIT(A) confirmed the addition made by the Assessing Officer, on account of non-prosecution. 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A) confirming the additions made by the Assessing Officer. Before us, the Counsel for the assessee submitted that the assessee is maintaining more than one ledger accounts in which interest income is accounted for. The Counsel for the assessee drew our attention to Page 11 of the Paper Book i.e. Rectification Application dated 30.12.2019 submitted before the Assessing Officer, wherein it was pointed out that interest income amounting to Rs. 2,07,007/- has also been booked in the General Ledger in Interest Income – Others. Copy of the ledger was also submitted before the Assessing Officer for his perusal. It was submitted that if the interest income is added to the income of the assessee, it would clearly amount to double taxation. Further, our attention was drawn to Page 13 of the Paper Book i.e. ledger account maintained by the assessee from which it is evident that actual interest income amounting to Rs. 72 lakhs has been accounted for by the assessee as against the income of 70.56 lakhs stated to have been declared by the assessee as per ITA No. 195/Ahd/2023 Mehsana Dist Cooperative Milk Producers Union Ltd. vs. ACIT Asst.Year –2017-18 - 4– the Assessing Officer. Accordingly, it was submitted that adding the aforesaid income would clearly amount to double taxation. 6. In response, Ld. D.R. relied that observations made by the Assessing Officer and CIT(A) in their respective orders. 7. On going through the facts of the case, we are in agreement with the Counsel for the assessee that the Assessing Officer did not take into consideration the other ledger account maintained by the assessee reflecting interest income of Rs. 2,07,007/-. Accordingly, in view of the arguments made before us and the Rectification Applications filed by the assessee, alongwith supporting documents viz. ledger account produced before us for our perusal, we are hereby directing that the addition made by the Assessing Officer may be deleted. No cogent reason has been furnished by the Assessing Officer for rejecting the rectification application filed by the assessee. 8. In the result, appeal of the assessee is allowed. This Order pronounced in Open Court on 13/09/2023 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 13/09/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad