Joint Commissioner of Income-tax, (OSD), Circle -7, Pune V. M/s. T.S. Wind Power Developers, Pune

ITA 210/PUN/2018

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9088 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-08-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 21-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Tax effect
• Section: 69; 263; 69C; 133A; 250

Judgement Text

आयकर अपीलीय अिधकरण “ए” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER . आयकर अपीलसं. / ITA No.210/PUN/2018 िनधाᭅरण वषᭅ / Assessment Year : 2013-14 The JCIT(OSD), Circle-7, Pune. Vs M/s.T.S.Wind Power Developers, 143, Building No.1, Navlakha Complex, Opp.Dhole Patil Road, Pune – 411001. PAN: AAEFT 9552 C Appellant / Revenue Respondent / Assessee Assessee by Shri V.L.Jain – AR Revenue by Shri S.P.Walimbe – DR Date of hearing 10/08/2022 Date of pronouncement 02/11/2022 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Revenue is directed against the order of ld.Commissioner of Income Tax(Appeals)-8, Pune, dated 27.10.2017 for the A.Y. 2013-14 under section 250 of the Income Tax Act, 1961(in short “the Act”). The Revenue has raised the following grounds of appeal: “1. Whether on the facts and circumstances of the case, the CIT- (A) erred in deleting the addition of Rs.4,10,00,000/- on unexplained expenditure u/s 639C of the Act, by relying on its decision in the assessee’s case for A.Y. 2012-13. 2. The appellant craves to leave, add, amend or alter the ground(s) of appeal on or before the appeal is heard and disposed off.” ITA No.210/PUN/2018 for A.Y. 2013-14 M/s.T.S.Wind Power Developers [R] 2 2. In this case the facts as emanating from the assessment order are as under : “5.1 Survey action u/s. 133A of the I. T. Act was carried out in the case of assessee on 02/02/2012. During the course of said survey, several incriminating documents were found and impounded. Majority of these incriminating documents related to payments of speed money to Government officials, land records officials, police, forest department employees etc by way of unaccounted cash payments. Based on all these documents, assessee had made disclosure of Rs. 1.45 crores for A.Y. 2011-12 and of Rs. 4.10 crores for A.Y. 2012-13. The assessee has honoured the disclosure by offering the amount so disclosed in its return for A.Y. 2011-12 and A.Y. 2012-13. However, in doing so, it has wrong fully added these amounts to its stock, thus, to the extent of disclosure, the assessee has wrongly increased its stock by R. 1.45 Crores for A.Y. 2011-12 and Rs. 4.10 crores for A.Y. 2012-13. However, while passing the assessment order for A.Y. 2012-13, the AO has rightly held the said disclosure to be unexplained expenditure within the meaning of Sec. 69C of the I. T. Act. Accordingly, in the computation for the said assessment order for A.Y. 2012-13, the AO has reduced the disclosure of Rs. 4,10,00,000/- from business income and has added it separately specifically stating that it was an addition u/s. 69C for which no other deduction is allowed. For the sake of ready reference, copy of assessment-order for –A.Y. 2012--13.dated 30/03/2015 is enclosed as Annexure-A of this order. 5.2 As a result and consequence of AO’s action for A.Y. 2012-13, since the said disclosure of Rs. 4.10 crores has been held to be unaccounted expenditure, it would have an impact on the closing stock / WIP of the assessee for the year ending on 31/03/2012. Thus, the closing stock / WIP as on 31/03/2012 (which was wrongly increased by the assessee by the amount of disclosure) would get reduced by an amount of Rs. 4.10 crores being addition made under Sec. 69C for A.Y. 2012-13. Accordingly, this reduced closing stock / WIP of F.Y.2011-12 would become opening stock / WIP for F. Y. 2012-13. In other words, the opening stock / WIP for the year under consideration i.e. A.Y. 2013-14 ITA No.210/PUN/2018 for A.Y. 2013-14 M/s.T.S.Wind Power Developers [R] 3 has to be reduced by Rs. 4.10 crores as a cascading effect of addition u/s. 69C in assessee’ case for A.Y. 2012-13. 5.6 In view of the foregoing facts and as a consequence of assessment order for A.Y. 2012-13 in the case of assessee, (making addition u/s. 69C), an addition of Rs. 4.1 crores is made to the total income of the assessee on account of reduction of opening stool WlP. Further, penalty proceedings u/s. 27l(1)(c) are initiated separately for concealment and furnishing of inaccurate particulars of income.” 3. Thus, the Assessing Officer(AO) had made addition under section 69 of Rs.4,10,00,000/-. 4. The ld.Authorised Representative(ld.AR) of the assessee submitted Department’s Appeal for A.Y.2012-13 has been dismissed on the ground that Low Tax Effect. Similarly, the ld.AR submitted that order under section 263 passed by the ld.Commissioner of Income Tax for A.Y. 2011-12 has been set-aside by ITAT vide order dated 08.06.2018 in ITA No.706/PUN/2016. The ld.AR, therefore submitted that the addition for A.Y. 2012-13 has been deleted by the ld.CIT(A) and the order of ld.CIT(A) has attained finality. Since the entire addition for A.Y. 2013-14 was based on addition for A.Y. 2012-13 which has been deleted by the ld.CIT(A). Hence, there is no merit in the addition for A.Y. 2013-14. The ld.AR supported the order of the ld.CIT(A). 5. On the other hand, the ld.Departmental Representative(ld.DR) for the Revenue supported the order of Assessing Officer. ITA No.210/PUN/2018 for A.Y. 2013-14 M/s.T.S.Wind Power Developers [R] 4 6. We have heard both the parties and perused the records. As mentioned in earlier para, the AO made an addition of Rs.4,10,00,000/- under section 69 for A.Y. 2012-13 on the ground that assessee has wrongly added survey declaration to its closing stock for A.Y. 2012-13. The AO therefore said that since closing stock for A.Y. 2012-13 becomes opening stock for A.Y. 2013-14, there needs to be an addition of Rs.4,10,00,000/- for A.Y. 2013-14. However, the ld.CIT(A) has directed the AO to delete the addition of Rs.4,10,00,000/- made for A.Y. 2012-13. This order or ld.CIT(A) has attained finality as Department’s appeal against this order has been dismissed by ITAT on the ground of Low Tax Effect. In these facts and circumstances, we agree with the ld.CIT(A)’s order that there is no merit in the addition of Rs.4,10,00,000/- for A.Y. 2013- 14. Therefore, the AO is directed to delete the addition of Rs.4,10,00,000/- made for A.Y. 2013-14. Accordingly, grounds of appeal of Revenue are dismissed. 7. In the result, appeal of the Revenue is dismissed. Order pronounced in the open Court on 2 nd November, 2022. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 2 nd Nov, 2022/ SGR* ITA No.210/PUN/2018 for A.Y. 2013-14 M/s.T.S.Wind Power Developers [R] 5 आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “ए” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.