RAJASTHAN EXPLOSIVES & CHEMICALS LTD, NEW DELHI V. DCIT, Alwar

ITA 278/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5419 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 1992-1993
• Appeal Filed On: 09-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY MALIKADDL CIT DHK
• Keywords: Depreciation; Additional evidence
• Section: 32

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NO. 278/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 1992-93 . RAJASTHAN EXPLOSIVES & CHEMICALS LTD., MACHKUND, DHOLPUR (RAJASTHAN) CUKE VS. DY. COMMISSIONER OF INCOME TAX (ASSESSMENT), SPECIAL RANGE, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAACR 9819 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SALIL KAPOOR (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI AJAY MALIK,(ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.03.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 8/04/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (APPEALS), ALWAR DATED 20.01.2014 FOR THE A.Y. 1992 -93 WHEREBY THE LD. CIT (A) HAS CONFIRMED THE DISALLOWANCE OF RS. 31,42,709/- ON AC COUNT OF SALES TAX COLLECTED BY THE COMPANY BUT NOT DEPOSITED UPTO 31 ST DECEMBER, 1992 WITH THE SALES TAX DEPARTMENT AND THERE ARE OTHER ISSUES WHICH ARE REP RODUCED HEREIN BELOW FOR THE SAKE OF RECORD :- 1) ACTION OF CIT (A) IN CONFIRMING THE ACTION OF THE A O OF DISALLOWANCE OF RS. 31,42,709/- ON ACCOUNT OF SALES TAX COLLECTE D BY THE COMPANY BUT NOT DEPOSITED UP TO 31 ST DEC 1992 WITH THE SALES TAX DEPARTMENT IS UNJUST, ILLEGAL, ARBITRARY AND AGAINS T THE FACTS AND CIRCUMSTANCES OF THE CASE. SALES TAX AMOUNTING TO R S. 31,42,709/- RELATING TO THE AY 1992-93 WAS DEFERRED BY THE HON BLE BIFR AS PER 2 ITA NO. 278/JP/2014 RAJASTHAN EXPLOSIVES & CHEMICALS LTD. VS. DCIT THE REHABILITATION SCHEME SANCTIONED ON DATED 03.05 .1994 AND THE COMPANY HAS PAID THE SAME AS PER SCHEME SANCTIONED. THEREFORE THE SALES TAX AMOUNTING TO RS. 31,42,709/- COLLECTE D DURING THE FY 1991-92 AND NOT PAID SHOULD NOT BE DISALLOWED CONSI DERING THE REHABILITATION PACKAGE SANCTIONED BY THE BIFR WHICH CLEARLY ENVISAGE THE PAYMENT PLAN OF SALES TAX DEFERRED. 2) ACTION OF CIT (A) IN CONFIRMING THE ACTION OF THE A O OF DISALLOWANCE OF RS. 41,743/- AS GUEST HOUSE EXPENDITURE AND RS. 28,557/- AS DEPRECIATION ON GUEST HOUSE IS UNJUST, ILLEGAL, ARB ITRARY AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. SINCE THE COMPANYS PLANT IS LOCATED FAR AWAY FROM DHOLPUR MAIN CITY AND THUS THE COMPANY MAINTAINS A TRANSIT HOUSE TO BE USED BY DIRECTORS A ND VISITORS OF THE COMPANY WHO STAY AWAY FROM DHOLPUR AND WHENEVER THE Y VISIT FACTORY, THEY HAVE TO USE THE TRANSIT HOUSE IN DHOL PUR CITY. 3) ACTION OF CIT (A) IN CONFIRMING THE ACTION OF THE A O OF DISALLOWANCE OF RS. 27,250/- ON ACCOUNT OF FURNITURE USED IN GUE ST HOUSE EXPENDITURE IS UNJUST, ILLEGAL, ARBITRARY AND AGAIN ST THE FACTS AND CIRCUMSTANCES OF THE CASE. IT IS CAPITAL EXPENDITUR E AND HAS NEVER BEEN CLAIMED AS EXPENSE IN THE PROFIT & LOSS ACCOUN T AND THUS THE COMPANY HAS CLAIMED DEPRECIATION ON THIS AMOUNT. 4) ACTION OF CIT (A) OF GIVING RELIEF OF ONLY RS. 20,0 00/- AND CONFIRMING DISALLOWANCE THE BALANCE ADDITION OF RS. 30,000/- B Y AO IN LUMP SUM ON ACCOUNT OF TELEPHONE EXPENDITURE IS UNJUST, ILLEGAL, ARBITRARY AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE . COMPANY PROVIDES TELEPHONE FACILITY TO THE SENIOR EXECUTIVE S AND SPECIALLY TO THE MARKETING OFFICIALS FOR DISCHARGING THEIR OFFIC IAL DUTY. THE LUMP SUM AMOUNT OF RS. 30,000/- WITHOUT HAVING ANY BASE CANNOT BE DISALLOWED. 5) ACTION OF CIT (A) IN CONFIRMING THE ACTION OF THE A O OF DISALLOWANCE OF RS. 41,745/- ON ACCOUNT OF PETROL & DIESEL EXPEN SES IS UNJUST, ILLEGAL, ARBITRARY AND AGAINST THE FACTS AND CIRCUM STANCES OF THE CASE. THE COMPANY VEHICLES ARE BEING USED ONLY FOR OFFICIAL AND BUSINESS PURPOSES AND THUS THE ACTION OF CIT (A) IN CONFIRMING THE ACTION OF THE A.O. IN DISALLOWANCE OF LUMP SUM AMOU NT ON ADHOC BASIS IS TOTALLY UNJUSTIFIED ILLEGAL & AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 6) ACTION OF CIT (A) IN DIRECTING THE AO FOR VERIFYING THE CLAIM OF RS. 40,468/- ON ACCOUNT DEPRECIATION IS UNJUST, ILLEGAL , ARBITRARY AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. TH IS HAS BEEN WRONGLY CALCULATED BY THE AO AND SEEMS TO BE A CLER ICAL ERROR. 3 ITA NO. 278/JP/2014 RAJASTHAN EXPLOSIVES & CHEMICALS LTD. VS. DCIT 7) ACTION OF CIT (A) IN DIRECTING THE AO FOR VERIFYING THE CLAIM OF RS. 19,880/- ON ACCOUNT OF PAYMENT OF GRATUITY IS UNJUS T, ILLEGAL, ARBITRARY AND AGAINST THE FACTS AND CIRCUMSTANCES O F THE CASE. IT WAS CLAIMED IN ITR AND HAS NOT BEEN SHOWN AS ALLOWA BLE EXPENDITURE BY THE A.O. IN COMPUTATION IF INCOME IN THE ORDER AND IT SEEMS TO BE A CLERICAL ERROR. 2. BEFORE WE DECIDE THE ISSUE, WE WOULD LIKE TO POI NT OUT THAT AN APPLICATION FOR ADDITIONAL EVIDENCE U/S 29 OF APPELLATE TRIBUNAL RU LES, 1963 WAS FILED BY THE ASSESSEE BEFORE THIS TRIBUNAL WHEREBY THE ASSESSEE HAS SOUGHT TO BRING ON RECORD THE LETTER OF SALES TAX DEPARTMENT DATED 29.12.1992 . THE SALES TAX DEPARTMENT VIDE LETTER DATED 11.05.1994 HAS AGREED TO DEFER TH E PAYMENT OF SALES-TAX AS PER THE SCHEME APPROVED BY BIFR DATED 3.5.1994. THE ORDER O F BIFR IN THE CHANGED CIRCUMSTANCES DATED 22.11.2000 WHEREBY THE BIFR HAS MODIFIED THE SCHEME FOR DELAYED PAYMENTS. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THESE ARE THE STATUTORY DOCUMENTS AND ORDERS WHICH THOUGH WAS REQUIRED TO BE CONSIDERED BUT HAVE NOT BEEN PLACED BEFORE THE AUTHORITIES BEL OW FOR THE PURPOSE OF DETERMINING THE ISSUES PENDING BEFORE US. IT WAS SUBMITTED THAT THESE DOCUMENTS ARE STATUTORY DOCUMENTS/ORDERS AND HAVE A BEARING O N THE OUTCOME OF THE APPEAL PENDING BEFORE US. 3. ON THE OTHER HAND, THE LD. D/R HAS VEHEMENTLY AR GUED THAT THE APPELLATE TRIBUNAL IS A FINAL FACT FINDING BODY AND HAS TO EX AMINE THE ORDERS PASSED BY THE AUTHORITIES BELOW, NAMELY, THE AO AND LD. CIT (A) B ASED ON THE MATERIAL FILED BEFORE THE SAID AUTHORITIES BELOW BY THE ASSESSEE. IT WAS CONTENDED THAT NEITHER THE AO NOR THE LD. CIT (A) WERE HAVING THE BENEFIT OF EXAM INING THE DOCUMENTS AND APPLY 4 ITA NO. 278/JP/2014 RAJASTHAN EXPLOSIVES & CHEMICALS LTD. VS. DCIT THEIR MIND FOR THE PURPOSE OF ADJUDICATING THE CONT ROVERSY. IT WAS SUBMITTED THAT THESE DOCUMENTS SHOULD NOT BE ENTERTAINED AND SHOUL D NOT BE PERMITTED TO BE RELIED ON BY THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PROVISIONS OF SECTION 32 OF THE SICA AC T, 1985 SHALL PREVAIL OVER ANY OTHER RULES OR SCHEME OR ACT EXCEPT TO THE EXTENT O F BEING INCONSISTENT. IN OTHER WORDS, IF ANY ACT OR RULES OR REGULATIONS IS CONTRA RY TO PROVISIONS OF SICA, THEN THE SAME SHALL NOT BE ENFORCEABLE AGAINST A COMPANY WHI CH HAS BEEN DECLARED SICK BY THE ORDERS OF BIFR. FOR THAT PURPOSE, THE LD. COUNS EL RELIED UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN WP 1915/2013 IN THE MA TTER OF M/S. LORD CHLORO ALKALIES LTD. VS. DIRECTOR GENERAL OF INCOME TAX (A DMN) AND ANR. IN OUR VIEW, THE JUDGMENT RELIED UPON BY LD. COUNSEL, HAS LAID DOWN AND REITERATED THE PRINCIPLES OF LAW MENTIONED IN SECTION 32 OF THE SICA. BUT AT THI S STAGE WE ARE REQUIRED TO EXAMINE WHETHER THE NON-PAYMENT OF SALES TAX DUES A FTER RECOVERING THE SAME, IN ANY WAY, IS CONTRARY TO ANY OF THE PROVISIONS OF TH E SCHEME FORMULATED UNDER THE ACT. 4.1. THE COMPLETE INITIAL SCHEME OF 03.05.1994 AND THE SUBSEQUENT SCHEME OF 22.11.2000 WERE REQUIRED TO BE FILED BEFORE THE AUT HORITIES BELOW AND THE REASONS GIVEN BY THE ASSESSEE IN THE AFFIDAVIT, IN OUR VIEW , SATISFACTORILY EXPLAIN THE DELAY IN NOT FILING DOCUMENTS AT THE TIME OF FINALIZATION OF ASSESSMENT PROCEEDINGS. SINCE THE DOCUMENTS REFERRED HEREIN ABOVE ARE THE STATUTORY D OCUMENTS, THEREFORE, IN THE INTEREST OF JUSTICE, THE ASSESSEE IS PERMITTED TO R ELY AND REFER ALL THESE DOCUMENTS IN THE ASSESSMENT PROCEEDING OR THEREAFTER. SINCE WE ARE PERMITTING THE ASSESSEE TO FILE ALL THE DOCUMENTS AT THE STAGE OF APPEAL, THER EFORE IT WILL BE IN THE INTEREST OF 5 ITA NO. 278/JP/2014 RAJASTHAN EXPLOSIVES & CHEMICALS LTD. VS. DCIT JUSTICE IF THE MATTER IS REMANDED BACK TO THE FILE OF THE AO TO EXAMINE ALL THE DOCUMENTS AND ALSO THE JUDGMENT RELIED UPON BY THE ASSESSEE IN THE CASE OF M/S. LORD CHLORO ALKALIES LTD. NOTHING STATED HEREIN AB OVE SHALL BE CONSIDERED AN EXPRESSION ON MERIT. THE APPEAL IS, THEREFORE, ALLO WED FOR STATISTICAL PURPOSES. 5. THE REMAINING GROUNDS WERE NOT SERIOUSLY CONTEST ED BY THE LD. A/R. THE ADDITIONS WERE ALSO VERY NOMINAL IN AMOUNT. THEREFO RE, WE DISMISS THE ASSESSEES APPEAL IN ALL THE GROUNDS EXCEPT GROUND NO. 1. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8/04/2016. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 8/04/2016. DAS/ VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- RAJASTHAN EXPLOSIVES & CHEMICALS LTD ., DHOLPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT (ASSESSMENT, SPECIAL RANGE , ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.278/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR