ACIT, Erode V. M/s. V.R. Textiles Pvt. Ltd., Erode

ITA 2533/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4467 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 02-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 30-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO. : 2533/MDS/2016 / ASSESSMENT YEAR :2012-13 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-1, NO.15, GANDHIJI ROAD, ERODE-638 001. V. M/S. V.R. TEXTILES PVT. LTD. (ERSTWHILE DIYA INDUSTRIES PVT. LTD.), 386, SATHY MAIN ROAD, PUNJAI PULIAMPETTI, ERODE-638 459. PAN: AABCD6800H ( /APPELLANT) ( /RESPONDENT) /APPELLANT BY : SHRI A.V. SREEKANTH, JCIT /RESPONDENT BY : NONE /DATE OF HEARING : 02.05.2017 /DATE OF PRONOUNCEMENT : 31.05.2017 / 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)-3, COIMBAT ORE DATED 27.05.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2012 -13. NOTICE OF HEARING WAS SERVED ON THE ASSESSEE THROUGH DEPAR TMENT. EVEN AFTER RECEIPT OF NOTICE OF HEARING FROM THE TRIBUNA L, THE ASSESSEE 2 I.T.A. NO. 2533/MDS/2016 FAILED TO APPEAR BEFORE THIS TRIBUNAL WHEN THE APPE AL WAS TAKEN UP FOR HEARING. THEREFORE, WE HEARD THE LD. DEPARTMEN TAL REPRESENTATIVE AND PROCEEDED TO DISPOSE OFF THE APP EAL ON MERIT. 2. SHRI A.V. SREEKANTH, THE LD. DEPARTMENTAL REPRE SENTATIVE SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS ADDITION OF CREDIT BALANCE OF RS.34,03,198/-. ACCORDING TO THE LD.DR, THERE WAS A CREDIT BALANCE OF RS.34,03,198/- OUTSTANDING IN THE ACCOUNTS. THE AO CALLED FOR THE CONFIRMATION LETTE R FROM THE CREDITORS AND ALSO ACCOUNT COPY OF THE CREDITORS. THE ASSESSEE HAS NOT FILED ANY CONFIRMATION. THE CREDIT BALANCE OUTSTANDING IN THE ACCOUNT WAS FOUND TO BE NOT PROVED. THEREFORE THE AO MADE ADDITION. HOWEVER, THE CIT(APPEALS) FOUND THAT THE ENTIRE BALANCE IS OPENING BALANCE. THEREFORE IT CANNOT BE ADDED F OR THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDER ATION. ACCORDING TO THE LD.DR, WHETHER IT IS AN OPENING BA LANCE OR CLOSING BALANCE, THE ASSESSEE HAS TO ESTABLISH THAT THERE WAS A CLOSING BALANCE FOR THE EARLIER ASSESSMENT YEAR WHI CH CONTINUES TO BE THE OPENING BALANCE FOR THE YEAR UNDER CONSIDERA TION. SINCE, NO-ONE EXAMINED THE CLOSING BALANCE OF THE EARLIER YEAR, ACCORDING 3 I.T.A. NO. 2533/MDS/2016 TO THE LD.DR, THE CIT(APPEALS) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. 3. WE HAVE CONSIDERED THE SUBMISSION OF THE LD.DR A ND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE CLAIMS THAT THERE WAS A OPENING BALANCE OF RS.34,03,198/-. THEREFORE THE SAME CANNOT BE ADDED FOR THE YEAR UNDER CONSIDERATI ON. WHEN THE ASSESSEE CLAIMS THAT THERE WAS AN OPENING BALANCE F OR THE YEAR UNDER CONSIDERATION, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT THE SAME NEEDS TO BE SUBSTANTIATED BY PRODUCING BOO KS OF ACCOUNTS. UNFORTUNATELY, THE ASSESSEE DID NOT FURN ISH ANY BOOKS OF ACCOUNTS BEFORE BOTH THE AUTHORITIES BELOW. THE REFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN DELETING THE ADDIT ION ON THE PRESUMPTION THAT OPENING BALANCE CANNOT BE ADDED FO R THE YEAR UNDER CONSIDERATION. THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT EVEN THOUGH THE ASSESSEE CLAIMS THAT IT HAS OP ENING BALANCE, THE SAME NEEDS TO BE SUBSTANTIATED BY PRODUCING THE MATERIAL. IN THE ABSENCE OF ANY MATERIAL BEFORE THE TRIBUNAL, TH E SAME NEEDS TO BE RECONSIDERED BY THE AO. ACCORDINGLY, THE ORD ERS OF BOTH THE AUTHORITIES ARE SET ASIDE AND THE ADDITION OF CREDI T BALANCE OF RS.34,03,198/- IS REMITTED BACK TO THE FILE OF THE AO. THE AO SHALL 4 I.T.A. NO. 2533/MDS/2016 RE-EXAMINE THE MATTER AFRESH IN THE LIGHT OF MATERI AL THAT MAY BE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE SAM E IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTU NITY TO THE ASSESSEE. 4. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DISA LLOWANCE OF POOJA EXPENSES. SHRI A.V. SREEKANTH, THE LD. DEPAR TMENTAL REPRESENTATIVE SUBMITTED THAT UNDER THE HEAD POOJA EXPENSES, THE ASSESSEE HAS MADE CERTAIN DONATION TO THE TEMPL ES. THE ASSESSEE CLAIMED BEFORE THE AO THAT CERTAIN SPECIAL POOJA WAS PERFORMED INSIDE THE PREMISES OF THE COMPANY. MORE OVER DONATIONS WERE ALSO MADE TO TEMPLES AND ANNADANAM S CHEME. THE AO DISALLOWED THE EXPENSES RELATED TO DONATION TO THE EXTENT OF RS.8 LAKHS. HOWEVER ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) PLACING RELIANCE ON THE JUDGMENT OF TH E PUNJAB & HARYANA HIGH COURT IN 134 ITR 458 RESTRICTED THE DI SALLOWANCE TO RS.3 LAKHS. SINCE THE DETAILS OF DONATION MADE BY THE ASSESSEE AND THE POOJA EXPENDITURE, DONATION GIVEN TO ANNADA NAM SCHEME WAS NOT AVAILABLE ON RECORD, THIS TRIBUNAL IS OF TH E CONSIDERED OPINION THAT CIT(APPEALS) HAS RIGHTLY RESTRICTED TH E CLAIM OF POOJA EXPENSES TO RS.3 LAKHS. THIS TRIBUNAL DO NOT FIND ANY REASON TO 5 I.T.A. NO. 2533/MDS/2016 INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY. A CCORDINGLY THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL BY THE REVENUE IS PART LY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 31 ST MAY, 2017 AT CHENNAI. SD/- SD/- ( . ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 31 ST MAY, 2017. JR. /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. !' /DR 6. #$ /GF