The Indian Steel & Wire Products Ltd., Kolkata V. D.C.I.T., Circle-1(2), Kolkata, Kolkata

ITA 2147/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6351 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 07-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHERJEE
• Keywords: Corroborative evidences; Revenue expenditure
• Section: 143(3)

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI, M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 2147 / KOL / 20 16 ASSESSMENT YEAR :2011-12 THE INDIAN STEEL & WIRE PRODUCTS LTD., 7, RED CROSS PLACE, KOLKAT-001 [ PAN NO.AABCT 1067 C ] V/S . DCIT, CIRCLE-1(2) P-7, CHOWRINGHEE SQUARE, KOLKATA-69 /APPELLANT .. / RESPONDENT /BY APPELLANT NONE /BY RESPONDENT SHRI A. BHATTACHERJEE, ADDL. CIT-DR /DATE OF HEARING 11-06-2018 /DATE OF PRONOUNCEMENT 15-06-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12 ARISES AGAINST COMMISSIONER OF INCOME TAX (APPEALS)-1, KOLKATAS O RDER DATED 29.08.2016 PASSED IN CASE NO.147/CITAAAA-1/CIR-1(2)/2014-15, I NVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE PLEADE D IN THE INSTANT APPEAL CHALLENGES OF CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION DISALLOWING ITS ASSET WRITTEN OFF CLAIM AMOUNTING T O 17,06,434/-. THE CIT(A)S DISCUSSION ON THE INSTANT ISSUE READS AS FOLLOWS:- GROUND NO.4: THIS GROUND RELATES TO THE DISALLOWA NCE OF AN AMOUNT OF RS.17,06,434/-- BY THE AO UNDER THE ASSETS WRITTEN OFF THE AO HAS DEALT WITH THIS ISSUE IN THE ASSESSMENT ORDER AS UNDER: ASSETS WRITTEN OFF. THE ASSESSEE COMPANY IN ITS P //L. A/C DEBITED AN AMOUNT OF RS.17,06,434/- UNDER HEAD OPERATION AND O THER EXPENSES SUB HEAD ASSETS WRITTEN OFF. THE ASSESSEE WAS ASKED S UBMIT THE DETAILS OF ASSETS ITA NO.2147/KOL/2016 A.Y.201 1-12 THE INDIAN STEEL & WIRE PRODUCTS LTD VS. D CIT, CIR-1(2), KOL. PAGE 2 WRITTEN OF WITH EVIDENCE. THE A/R APPEARED ON 21.03 .2014 BUT FAILED TO SUBMIT ANY DETAIL AND SUPPORTING EVIDENCE IN THIS REGARD. THUS, THE SAID AMOUNT OF RS.1706433.87/- IS LIABLE TO BE DISALLOWED BEING CAPITAL LOSS IN ABSENCE OF SUPPORTING DOCUMENTS AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE APPELLANTS AR HAS MADE WRITTEN SUBMISSIONS AS UNDER: THE ASSET WERE DECLARED AS SCRAP AND WRITTEN OFF I N P/L ACCOUNT OF RS.17,06,434/-. SAME HAS BEEN APPEARED IN P/L ACCOU NT INCLUDED IN SCRAP SALE IN REFER SCHEDULE 3 FORMING PART OF P/L ACCOUN T. HENCE DEBIT AND CREDIT BOTH ACCOUNTED FOR DURING THE YEAR AND AUDITOR ACCE PTED THE SAME ACCOUNTING. I HAVE CONSIDERED THE MATERIAL BEFORE ME. THE AO HE LD THAT THE APPELLANTS AR WAS UNABLE TO SUBMIT ANY DETAILS AND SUPPORTING EVIDENCE TO SUBSTANTIATE THE AMOUNT OF RS.17,06,434/- WRITTEN-OFF A UNDER HE AD, OPERATION AND OTHER EXPENSES.THE APPELLANTS AR IN THE WRITTEN SUBMISS ION HAS CLAIMED THAT THE ASSET WRITTEN OFF PERTAINED TO THE ASSETS SCRAPPED , WHICH WAS REFLECTED IN SCHEDULE 3 TO THE PROFIT & LOSS ACCOUNT. ITS FOUND THAT THE APPELLANT WAS UNABLE TO DISCHARGE ITS ONUS TO SUBSTANTIATE ITS CL AIM EITHER DURING THE ASSESSMENT OR APPELLATE PROCEEDINGS AND HAS REITERA TED THE EARLIER CONTENTIONS. IN VIEW THEREOF, I AM OF THE OPINION T HAT THERE IS NO INFIRMITY IN THE FINDING OF THE AO. THEREFORE, THE DISALLOWANCE MADE BY THE AO OF RS.17,06,434/- IS CONFIRMED. THIS GROUND IS NOT ALL OWED. 3. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E STRONGLY SUPPORTING THE IMPUGNED DISALLOWANCE OF ASSETS WRIT TEN OFF DURING THE COURSE OF HEARING. CASE FILE SUGGESTS THAT ALTHOUGH THE AS SESSING OFFICER HAD QUOTED ASSESSEES FAILURE IN FILING ALL THE NECESSARY DETA ILS OF THE ASSET WRITTEN OFF, THE TAXPAYERS ON THE OTHER HAND PLEADED BEFORE CIT(A) T HAT IT HAD DECLARED THE SAME IN SCHEDULE-3 FORMING PART OF PROFIT AND LOSS ACCOUNT ALONGWITH ALL DEBIT AND CREDIT ENTRIES. LEARNED DEPARTMENTAL REPRESENTA TIVE FAILS TO DISPUTE THE CLINCHING FACT THAT THE ASSESSEES INCOME DERIVED F ROM SALE OF SUCH SCRAP ITEMS STANDS ASSESSED UNDER THE HEAD BUSINESS INCO ME. HON'BLE GUJARAT HIGH COURT IN DCIT VS. HARJIVANDAS ZAVERI 258 ITR 7 85 (GUJ) HOLDS SUCH AN INCOME TO BE ELIGIBLE FOR U/S 80IA DEDUCTION. THE R EVENUE THEREAFTER FAILS TO REBUT THE FACT THAT ASSESSEE HAD EITHER WRITTEN OFF THE RELEVANT SCRAP ASSETS. WE SEE NO REASON TO AGREE WITH BOTH THE LOWER AUTHO RITIES CONCLUSION THAT THIS WRITE OFF IS NOT ALLOWABLE AS REVENUE EXPENDITURE A S PER THE ABOVE INCOME ANALOGY. WE MAKE IT CLEAR THAT THERE IS NO ITEM-WI SE DISPUTE QUA THE ASSETS WRITTEN OFF SCRAP WHICH HAS ALREADY BEEN ACCEPTED A S A REVENUE ITEM FOR THE ITA NO.2147/KOL/2016 A.Y.201 1-12 THE INDIAN STEEL & WIRE PRODUCTS LTD VS. D CIT, CIR-1(2), KOL. PAGE 3 PURPOSE OF ASSESSMENT. WE TAKE INTO ACCOUNT ALL THE ABOVE NARRATED FACTS TO CONCLUDE THAT ASSESSEE IS ENTITLED TO CLAIM ITS WRI TE OFF THE REMAINING SCRAP ITEMS AS REVENUE EXPENDITURE. IT SUCCEEDS IN ITS SO LE SUBSTANTIVE GROUND. 4. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 15 /06/2018 SD/- SD/- ( %) (' %) (M.BALAGANESH) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 15 / 06 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-THE INDIAN STEEL & WIRE PRODUCTS LTD, 7 RED CROSS PLACE,KOL-001 2. /RESPONDENT-DCIT, CIRCLE-1(2), P-7, CHOWRINGHEE SQU ARE, KOLKATA-69 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,