The Jute Corporation of India Limited., Kolkata V. J . C.I. T (OSD) CIT - 1,kolkata., Kolkata

ITA 277/KOL/2013

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6602 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARJUNA
• Assessee Lawyers: B SYAM

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM & HONB LE SHRI S.S. VISWANETHRA RAVI, JM ] I.T.A NO. 277/KOL/201 3 ASSESSMENT YEAR : 2009-1 0 THE JUTE CORPORATION OF INDIA LTD. -VS- JCIT(OS D), CIRCLE-1, KOLKATA [PAN: AABCT 8820 B] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI B. SYAM, AR FOR THE REVENUE : SHRI G. MALLIKARJUNA, CIT DR DATE OF HEARING : 02.05.2018 DATE OF PRONOUNCEMENT : 27.06.2018 ORDER PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)- XXIV, KOLKATA PASSED U/S 250 DATED 31.12.2012 OF THE INCOME TAX ACT, 1961(THE ACT) FOR THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE IS A PUBLIC SECTOR COMPANY AND IS IN THE BUSINESS OF TRADING OF RAW JUTE ON THE FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN REJ ECTING THE CLAIM MADE BY THE APPELLANT VIDE ITS WRITTEN SUBMISSIONS AND ALSO DUR ING THE COURSE OF THE HEARING OF THE APPEAL FOR GIVING DIRECTION TO THE ASSESSING OFFICER TO EXCLUDE THE NON- TAXABLE AMOUNT FROM THE INCOME OF THE APPELLANT WHI CH WAS INCLUDED IN THE SUM OF RS. 27839876 CREDITED TO THE PROFIT & LOSS ACCOU NT BY WAY OF PRIOR PERIOD ADJUSTMENT ON ACCOUNT OF AMOUNT WRITTEN BACK BY THE APPELLANT OUT OF PROVISION FOR GRATUITY, WHEN, SUCH WRITE BACK OF PROVISION FO R GRATUITY WAS NOT CHARGEABLE 2 ITA NO.277/KOL/2013 THE JUTE CORPORATION OF INDIA L TD. A.YR .2009-10 2 TO TAX TO THE EXTENT THE AMOUNT REPRESENTED EXPENDI TURE DISALLOWED IN THE ASSESSMENT OF EARLIER YEARS U/S 40A(7) IN VIEW OF T HE PROVISIONS CONTAINED IN SECTION 41 OF THE INCOME TAX ACT. 2) FOR THAT THE LD. C.I.T (A) WAS UNJUSTIFIED IN CO NFIRMING THE DISALLOWANCE OF RS. 267917 MADE BY THE ASSESSING OFFICER U/S 40A (9 ) OF] ACCOUNT OF RS. 64917 AID BY THE APPELLANT TO JCI RECREATION & WELFARE CL UB AND RS. 203000 PAID TO ITS CANTEEN, WHEN, SUCH EXPENSES WERE IN THE NATURE OF ALLOWABLE STAFF WELFARE EXPENSES OUTSIDE THE SCOPE OF DISALLOWANCE PROVIDED IN THE SAID SECTION. 3) FOR THAT THE LD. C.I.T (A), WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF RS.10932000 MADE BY THE APPELLANT ON ACCOUNT OF PRO VISION FOR ANTICIPATED CLAIMS FROM ITS CUSTOMERS IN THE ORDINARY COURSE OF ITS BUSINESS, BY DIRECTING THE ASSESSING OFFICER TO, INSTEAD, ALLOW DEDUCTION ON T HE BASIS OF CLAIMS ACTUALLY PAID DURING THE YEAR AMOUNTING TO RS. 6165976 ONLY, THOU GH, THE APPELLANT HAD PROVIDED FOR SUCH CLAIMS ON A FAIR ESTIMATION BASI S PERMITTED UNDER THE ACCRUAL BASIS OF ACCOUNTING BEING REGULARLY FOLLOWED BY IT. 4) FOR THAT THE APPELLANT CRAVES LEAVE TO ALTER, MO DIFY OR AMEND ANY OF THE ABOVE GROUND/S AND TO ADD FURTHER GROUND/S ON OR BEFORE T HE FINAL HEARING OF THIS APPEAL. 3. WE HAVE HEARD SHRI B. SYAM, LD. COUNSEL FOR THE ASSESSEE AND SHRI G. MALLIKARJUNA, THE LD. CIT DR ON BEHALF OF REVENUE. 4. ON A CAREFUL CONSIDERATION AND PERUSED THE MATER IAL AVAILABLE ON RECORD. ON THE FIRST GROUND WE FIND THAT THE LD. CIT(A) HELD AS FOLLOWS: 2.2. DURING THE COURSE OF APPEAL, THE APPELLANT H AS MADE THE FOLLOWING SUBMISSIONS: THE AMOUNT ADDED BACK, BEING EXCESS PROVISION FOR G RATUITY IN EARLIER YEARS WRITTEN BACK IS NOT A PRIOR PERIOD EXPENDITURE BUT IS A PR IOR PERIOD INCOME DULY CREDITED TO THE PROFIT AND LOSS ACCOUNT AND INCLUDED IN THE RETURNE D INCOME. INSTEAD OF ADDING BACK THIS AMOUNT, THE ASSESSING O FFICER SHOULD HAVE REDUCED THE SAME FROM THE RETURNED INCOME TO THE EXTENT SUCH UNPAID PROVISION FOR GRATUITY WRITTEN BACK WAS ALREADY DISALLOWED IN ASSESSMENT OF EARLIER YEA RS, WHICH WAS NOT CHARGEABLE UNDER THE PROVISIONS OF SECTION 41. 3 ITA NO.277/KOL/2013 THE JUTE CORPORATION OF INDIA L TD. A.YR .2009-10 3 THE ABOVE SHOWS THAT THE ISSUE WAS DECIDED IN FAVOU R OF THE ASSESSEE BY THE LD. CIT(A). WE FIND NO REASON FOR ASSESSEE TO BE AGGRIE VED BY THIS ORDER OF THE LD. CIT(A). ON A QUARRY FROM THE BENCH, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ASSESSING OFFICER IS NOT PASSING CONSEQUENTIAL ORDE RS AFTER RECEIVING THE ORDER OF THE LD. CIT(A). SUCH ADMINISTRATIVE GRIEVANCES CANNOT B E ADDRESSED BY US. IN VIEW OF THE ABOVE DISCUSSION THIS GROUND IS DISMISSED AS MISCON CEIVED. 5. GROUND NO.2 IS ON THE DISALLOWANCE MADE U/S 40A( 9) OF THE ACT. THE LD. CIT(A) AT PARA 4.3 RELIED ON THE TAX AUDIT REPORT AND ALSO TH E FINDING OF THE ASSESSING OFFICER AND DISMISSED THE CONTENTION OF THE ASSESSEE. BEFORE US , THE ASSESSEE COULD NOT CONTROVERT THE FACTUAL FINDING OF THE LD. CIT(A). HENCE THE S AME IS DISMISSED. 6. GROUND NO. 3 IS ON THE ISSUE OF REJECTING THE CL AIM MADE BY THE ASSESSEE ON ACCOUNT OF PROVISION FOR ANTICIPATED CLAIMS FROM ITS CUSTO MERS. THE LD. CIT(A) HAS OBSERVED AT PARA 5.3 OF HIS ORDER HELD AS FOLLOWS: I HAVE CONSIDERED THE ABOVE SUBMISSION OF THE LD. AR AND ALSO GONE THROUGH THE ASSESSMENT ORDER. DURING THE COURSE OF THE APPELLAT E PROCEEDINGS, THE LD. AR HAS EXPLAINED THAT THE APPELLANT HAS ACTUALLY PAID THE AMOUNT OF RS. 61,65,976/- ON ACCOUNT OF SHORT WEIGHT SETTLED DURING THE YEAR OUT OF THE PROVISIONS FOR CLAIMS AMOUNTING TO RS. 1,09,32,000/- DEBITED IN PROFIT AN D LOSS ACCOUNT. IN VIEW OF THE ABOVE, THE AO IS DIRECTED TO DELETE THE ADDITION OF RS. 61 ,65,976/- OUT OF THE AFORESAID ADDITION OF RS. 1,09,32,000/- AFTER VERIFYING THE CONTENTION OF THE APPELLANT COMPANY THAT THE AMOUNT OF RS. 61,65,976/- ON ACCOUNT OF SHORT WEIGH T WAS ACTUALLY PAID DURING THE YEAR. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 7. THE ASSESSEE IN THIS CASE WAS ASKED TO PRODUCE D ETAILS OF CLAIMS ADJUSTED WITH SALES AS WELL AS OTHER DETAILS SUCH AS POSSIBLE CLAIMS DI SCHARGED DEDUCTED FROM SALES ETC. THE AO HELD THAT THIS IS UNASCERTAINED LIABILITY. BEFO RE US THE ASSESSEE COULD NOT DISPROVE FINDING OF THE AO THAT THE CLAIM IS UNASCERTAINED L IABILITY. THE LD. CIT(A) ACCEPTED THE CLAIM OF THE ASSESSEE TO THE EXTENT THAT, THE AMOUN TS ACTUALLY PAID DURING THE YEAR SHOULD BE ALLOWED AS A DEDUCTION. WE FIND NO INFIR MITY IN THIS FINDING OF THE LD. CIT(A). THUS GROUND NO.3 IS DISMISSED. 4 ITA NO.277/KOL/2013 THE JUTE CORPORATION OF INDIA L TD. A.YR .2009-10 4 8. GROUND NO. 4 IS GENERAL IN NATURE AND DOES NOT R EQUIRE ANY SPECIFIC ADJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 27.06.2018 SD/- SD/- [S.S.VISWANETHRA RAVI] [ J.SUDHAK AR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED : 27.06.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE JUTE CORPORATION OF INDIA LTD, HUDCO BUILDIN G, 15N, NELLIE SENGUPTA SARANI, KOLKATA-700087. 2. JCIT(OSD), CIRCLE-1, KOLKATA, AAYAKAR BHAWAN, 7 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069. 3..C.I.T.(A)- , KOLKATA 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S