M/s Bihar State Warehousing Corpn. Ltd., Patna V. ACIT, Circle-2, Patna, Patna

ITA 239/PAT/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0230 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 11-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Bad and doubtful debts
• Section: 263; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA ‘DB’ BENCH AT KOLKATA [Virtual Court] Before SRI MANISH BORAD, ACCOUNTANT MEMBER & SRI SONJOY SARMA, JUDICIAL MEMBER I.T.A. No.: 239/Pat/2018 Assessment Year: 2011-12 M/s. Bihar State Warehousing Corporation Ltd........Appellant [PAN: AACCB 1034 G] Vs. ACIT, Circle-2, Patna............................................Respondent Appearances by: Sh. A.K. Rastogi, Sr. Adv. & Sh. Rakesh Kumar, Adv., appeared on behalf of the Assessee. Sh. Sanjay Mukherjee, CIT, ITAT, appeared on behalf of the Revenue. Date of concluding the hearing : July 19 th , 2022 Date of pronouncing the order : July 25 th , 2022 ORDER Per Manish Borad, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2011-12 is directed against the order passed u/s 250(6) of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals)-1, Patna [in short ld. “CIT(A)”] dated 30.05.2018 which is arising out of the assessment order framed u/s 263/143(3) of the Act dated 30.12.2016. I.T.A. No.: 239/Pat/2018 Assessment Year: 2011-12 M/s. Bihar State Warehousing Corporation Ltd. Page 2 of 5 2. Registry has informed that the appeal is time barred by 33 days. Condonation application has been filed by the assessee. After perusing the same, we find force in the reasons mentioned therein and are satisfied that the assessee was prevented for reasonable cause in filing the instant appeals. We, therefore, condone the delay and admit the appeal for adjudication. 3. The assessee is in appeal before this Tribunal raising the following grounds: “1. For that the Commissioner of Income Tax (Appeals) - 1, ["the CIT(A)] erred on facts and in law in dismissing the appeal filed by the appellant by confirming the assessment order passed by the assistant Commissioner of Income tax, Circle -2, Patna (A.O.) assessing the appellant at an income of Rs. 7,34,91,690/-, as against assessed income of Rs. 2,34,91,690/-, under section 143(3) of the Income Tax Act, 1961. ("the Act"). 2. For that the CIT(A) erred on facts and in law in confirming in disallowing the claim of provision for Storage Loss amounting to Rs. 5.00 Crore under section 36(1)(vii) of the Act, which is wrong, illegal and unjustified. 3. The Appellant prays that the addition of Rs. 5.00 Crore (Rs. Five Crore Only) made in respect of Provision for Storage Loss be deleted." 4. That the whole order passed by the CIT(A) is bad in the facts of law.” 4. Brief facts of the case are that the assessee is a State-owned Corporation engaged in warehousing transportation and handling services and income of Rs. 2,10,61,585/- declared in the return of income filed for AY 2012-13 on 29.03.2012. The case of the assessee assessed u/s 143(3) of the Act on 27.02.2014. Subsequently, an order u/s 263 was passed on 22.03.2016 by ld. Commissioner of Income Tax-1, Patna setting aside the I.T.A. No.: 239/Pat/2018 Assessment Year: 2011-12 M/s. Bihar State Warehousing Corporation Ltd. Page 3 of 5 assessment order and directing the ld. AO to pass a fresh assessment order. 5. In compliance to the order passed u/s 263 of the Act, ld. AO carried out the proceedings u/s 143(3) r.w.s. 263 of the Act and disallowed a sum of Rs. 5 Cr claimed by the assessee on account of provision for storage loss. Ld. AO made a disallowance observing that the said sum is not an ascertained liability. 6. Aggrieved, the assessee preferred appeal before ld. CIT(A) challenging the disallowance of Rs. 5 Cr made by ld. AO and failed to get any relief. 7. Aggrieved, the assessee is now in appeal before this Tribunal. Ld. Counsel for the assessee submitted that the finding of ld. CIT(A) is not on the issue raised by the assessee before ld. CIT(A) and needs to be restored to ld. CIT(A) for afresh adjudication. 8. Per contra, ld. D/R submitted that the alleged disallowance is part of the total storage loss of 12.46 Cr and thus, supported the finding of ld. CIT(A). 9. We have heard rival contentions and perused the records placed before us. 10. The assessee has challenged the finding of ld. CIT(A) in confirming the disallowance of storage loss amounting to Rs. 5 Cr u/s 36(1)(vii) of the Act. We, on perusal of the assessment order, find that ld. AO denied the assessee’s claim of provision of storage loss of Rs. 5 Cr on account of the fact that the liability for such storage loss could not be ascertained. However, on perusal of the I.T.A. No.: 239/Pat/2018 Assessment Year: 2011-12 M/s. Bihar State Warehousing Corporation Ltd. Page 4 of 5 finding of the ld. CIT(A) we find that it is not specifically with regard to the issue raised before us. Ld. CIT(A) has referred to the storage loss of Rs. 12.46 Cr in the warehouse and thereafter while concluding the finding, ld. CIT(A) observes that in spite of the attempts made by the appellant in respect of allowability of provision as bad debts, the so-called recovery being made on account of shortages are provisions only and not actual recoveries. We are unable to understand that how the issue of bad debts has been discussed by ld. CIT(A) when the issue in question is relating to storage loss. Bad debts relate to the irrecoverable sales while storage loss is part of the business loss which arises in the nature of business run by the assessee. 11. We are of the considered view that the issue needs to be restored to the ld. CIT(A) as the finding in the impugned order deals with some other issues which have not been raised by the ld. AO. Ld. D/R was fair enough not to raise any objection if the issues raised in the instant appeal is restored to ld. CIT(A). We, therefore, restore the sole issue raised by the assessee in the instant appeal for afresh adjudication to ld. CIT(A). Needless to mention that proper opportunity of being heard should be provided to the assessee. The assessee is directed to remain vigilant and file necessary documents, if considered, in support of its grounds of appeal and should not take adjournment, unless otherwise required for reasonable cause. In case after providing sufficient opportunity to the assessee, there is no compliance before the ld. CIT(A), then ld. CIT(A) can pass the speaking order in accordance with law. I.T.A. No.: 239/Pat/2018 Assessment Year: 2011-12 M/s. Bihar State Warehousing Corporation Ltd. Page 5 of 5 12. In the result, the appeal filed by the assessee is allowed for statistical purposes. Kolkata, the 25 th July, 2022. Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 25.07.2022 Bidhan (P.S.) Copy of the order forwarded to: 1. M/s. Bihar State Warehousing Corporation Ltd., 1 st Floor, Maurya Lok Complex, Patna-800 001. 2. ACIT, Circle-2, Patna. 3. CIT(A)-1, Patna. 4. CIT- 5. CIT(DR), Patna Bench, Patna. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata