Chemtech Processors, Tiruppur V. ITO, Tiruppur

ITA 2216/CHNY/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9881 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 05-05-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 04-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: T BANUSEKAR
• Section: 40A(3); 131

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2216/MDS/2014 ( )( / ASSESSMENT YEAR : 2010-11 M/S CHEMTECH PROCESSORS, NO.779, KANCHEEVARAM, NALLUR, TIRUPUR 641 606. PAN : AACFC 0996 M V. THE INCOME TAX OFFICER, WARD I(5), TIRUPUR. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. T. BANUSEKAR, CA -.+, / 0 / RESPONDENT BY : SHRI N. MADHAVAN, JCIT 1 / 2% / DATE OF HEARING : 05.05.2015 3') / 2% / DATE OF PRONOUNCEMENT : 26.06.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COIMBA TORE, DATED 30.06.2014 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2 I.T.A. NO.2216/MDS/14 2. SH. T. BANUSEKAR, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED THE PAYMENT MADE BY THE ASSESSEE UNDER SECTION 40A(3) OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT') ON THE GROUND THAT THE SAME WA S PAID TO SETTLE THE LIABILITY OF THE PREVIOUS YEAR WHICH WAS DUE TO PUR CHASE OF WIND ENERGY, PRE-EXPORT GARMENTS AND CLOTHS FROM M/S REL IANCE DYEING WORKS. FILING ADDITIONAL MATERIAL BEFORE THIS TRIB UNAL, THE LD. REPRESENTATIVE SUBMITTED THAT ON THE BASIS OF THE S TATEMENT RECORDED UNDER SECTION 131 OF THE ACT, THE ASSESSIN G OFFICER CAME TO A CONCLUSION THAT THE PAYMENT MADE BY THE ASSESS EE WAS TO BE DISALLOWED. HOWEVER, THE MATERIAL AVAILABLE ON REC ORD SUGGESTS THAT THE PAYMENT WAS MADE TOWARDS CURRENT ACCOUNT. THE MATERIAL AVAILABLE ON RECORD CLEARLY INDICATES THAT THE PAYM ENT WAS MADE TOWARDS RUNNING A CURRENT ACCOUNT. THEREFORE, THE PROVISIONS OF SECTION 40A(3) OF THE ACT IS NOT APPLICABLE. THE L D. REPRESENTATIVE FURTHER CLARIFIED THAT THE PAYMENT MADE BY THE ASSE SSEE DID NOT RELATE TO ANY EXPENDITURE AT ALL. THE LD. REPRESEN TATIVE FURTHER SUBMITTED THAT THE ASSESSING OFFICER MADE DISALLOWA NCE ONLY ON THE BASIS OF THE STATEMENT RECORDED FROM ONE SHRI S.P. SARAVANAN ON 08.03.2010 UNDER SECTION 131 OF THE ACT. IN VIEW O F THE MATERIAL AVAILABLE ON RECORD, ACCORDING TO THE LD. REPRESENT ATIVE, THERE CANNOT BE ANY DISALLOWANCE. 3 I.T.A. NO.2216/MDS/14 3. ON THE CONTRARY, SHRI N. MADHAVAN, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS NOW FILED ADDITIONAL MATERIAL BEFORE THIS TRIBUNAL FOR ADMISS ION UNDER RULE 29 OF THE APPELLATE TRIBUNAL RULES, 1963. ACCORDING T O THE LD. D.R., THESE DOCUMENTS WERE NOT AVAILABLE BEFORE THE LOWER AUTHORITIES. THEREFORE, IF THE TRIBUNAL INTENDS TO TAKE THE ADDI TIONAL MATERIAL ON RECORD, AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSIN G OFFICER TO EXAMINE THE SAME. THE LD. D.R. FURTHER POINTED OUT THAT THE MANAGING PARTNER OF THE ASSESSEE, DURING EXAMINATIO N ON 08.03.2010, ADMITTED THAT THE PAYMENTS WERE MADE TO WARDS LIABILITY OF THE PREVIOUS YEAR FOR PURCHASING OF WIND ENERGY, GARMENTS, ETC. THEREFORE, IT IS AN EXPENDITURE, HENCE, THE ASSESSI NG OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSES SING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE TOWARDS CASH P AYMENTS EXCEEDING ` 20,000/- ON THE GROUND THAT THE SAME WAS RELATABLE TO EXPENDITURE FOR PURCHASING OF WIND ENERGY, GARMENTS , ETC. NOW THE ASSESSEE CLAIMS THAT IT WAS NOT AN EXPENDITURE AND THE PAYMENTS WERE MADE TOWARDS RUNNING A CURRENT ACCOUNT. THE A SSESSEE HAS FILED ADDITIONAL MATERIAL BEFORE THIS TRIBUNAL TO E STABLISH THAT WHAT 4 I.T.A. NO.2216/MDS/14 WAS PAID BY IT IS ONLY A CURRENT ACCOUNT TRANSACTIO N AND NOT ANY EXPENDITURE. AS RIGHTLY SUBMITTED BY THE LD. D.R., THESE MATERIALS WERE NOT AVAILABLE BEFORE THE LOWER AUTHORITIES. T HEREFORE, THE ASSESSING OFFICER HAD NO OCCASION TO CONSIDER THESE MATERIALS. THIS TRIBUNAL BEING A FACT FINDING AUTHORITY, THE F ACTS ARE TO BE BROUGHT ON RECORD SO AS TO ENABLE THE APPELLATE FOR UM TO APPRECIATE THE GRIEVANCE OF THE ASSESSEE WHILE EXAMINING THE Q UESTION OF LAW. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE ADDITIONAL MATERIAL FILED BY THE ASSESSEE NEEDS TO BE EXAMINED BY THE ASSESSING OFFICER TO FIND OUT WHETHER THE PAYME NT MADE BY THE ASSESSEE WAS RELATING TO THE LIABILITY OF THE PREVI OUS YEAR OR IT IS ONLY A TRANSACTION IN THE NATURE OF CURRENT ACCOUNT. AC CORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE. THE ENTIRE ISSUE OF DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT IS REM ITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFI CER SHALL RE- EXAMINE THE ISSUE AFRESH IN THE LIGHT OF THE ADDITI ONAL MATERIAL FILED BEFORE THIS TRIBUNAL AND THEREAFTER DECIDE THE ISSU E AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 5 I.T.A. NO.2216/MDS/14 ORDER PRONOUNCED ON 26 TH JUNE, 2015 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 26 TH JUNE, 2015. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-II, COIMBATORE 4. 1 92 /CIT-III, COIMBATORE 5. 7: -2 /DR 6. ( ; /GF.