Dy. Commissioner of Income Tax, Bareilly V. M/s Kisan Sahkari Chini Mills Ltd, Shahjahanpur

ITA 278/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4867 (ITAT-LUCKNOW)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 43B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.278/LKW/2015 ASSESSMENT YEAR:2009-10 DY.C.I.T., CIRCLE-1, BAREILLY. VS. M/S KISAN SAHKARI CHINI MILLS LTD. POWAYAN, SHAHJAHANPUR. PAN:AAAAK0207C (APPELLANT) (RESPONDENT) APPELLANT BY SHRI AMIT NIGAM, D. R. RESPONDENT BY SHRI PRAVEEN KUMAR, ASSISTANT ACCO UNTANT DATE OF HEARING 10/12/2015 DATE OF PRONOUNCEMENT 12/01/2016 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORD ER OF LEARNED CIT(A), BAREILLY DATED 05/02/2015 FOR THE ASSESSMENT YEAR 2 009-10. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS: 1. THAT THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS) IS ERRONEOUS IN LAW AND ON FACTS IN DELETING THE DI SALLOWANCE AMOUNTING TO RS.11,15,21,523/- AS UNPAID INTEREST W HICH THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE UNPAID INTEREST AMOUNTING TO RS.11,15,21,523/- U/S 43B OF THE I.T. ACT, 1961. THE CIT (A) HAS NOT APPRECIATED THE FACTS AND CIRCU MSTANCES MENTIONED BY THE ASSESSING OFFICER AND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 2. THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS IN LAW AND ON FACTS IN DELETING THE AM OUNT OF RS.2,01,06,707/- OF EXCISE DUTY WHICH THE ASSESSING OFFICER HAS RIGHTLY TREATED IT AS INCOME OF THE ASSESSEE FR OM UNDISCLOSED SOURCES. DURING THE ASSESSMENT PROCEEDI NGS, THE ASSESSEE SUBMITTED THAT THE EXCISE DUTY HAS NOT BEE N INCLUDED IN THE VALUATION OF CLOSING STOCK AS THE DUTY IS NO T PAYABLE ON CLOSING STOCK. THE ASSESSEE FURTHER STATED THAT THE GOODS OF CLOSING STOCK HAVE BEEN KEPT IN WAREHOUSE. THE SUBM ISSION OF THE ASSESSEE WAS CONSIDERED AND IT IS CLEAR THAT TH E ASSESSEE HAS VIOLATED THE PROVISIONS SECTION 145A OF IT ACT1 961. 2 3. THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), BAREILLY IS ERRONEOUS IN LAW AND ON FACTS IN DELETI NG THE ADDITION RIGHTLY MADE BY THE ASSESSING OFFICER AT RS.83,00,475/- IN CLOSING STOCK OF SUGAR. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS O BSERVED THAT THE ASSESSEE HAS SUPPRESSED THE VALUATION OF C LOSING STOCK OF RS.83,00,475/- WHEN THE RATE OF VALUATION OF FREE- SUGAR WAS AVAILABLE WITH ASSESSEE AS ON 31.03.2009 @RS.2000 PER QUINTAL OF FREE SUGAR . THIS AMOUNT HA S AFFECTED THE GROSS PROFIT AND THEREAFTER THE NET PROFIT FOR THE PERIOD UNDER CONSIDERATION. IN THESE CIRCUMSTANCES, THE ASS ESSING OFFICER HAS RIGHTLY MADE AN ADDITION OF RS.83,00,47 5/- TO THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 4. THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX ( APPEALS), BAREILLY IS ERRONEOUS IN LAW AND ON FACTS IN DELETI NG THE ADDITION RIGHTLY MADE BY THE ASSESSING OFFICER AT RS.1,81,29,678/- TO THE INCOME OF THE ASSESSEE AS O THER LIABILITIES. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSEE HAS SHOWN CURRENT LIABILITIES AS 'OTHER LI ABILITIES AT RS.1,81,29,678/-. IN RESPONSE OF THE QUERY, THE AS SESSEE FAILED TO SUBMIT ANY SATISFACTORY REPLY OR DOCUMENT ARY EVIDENCES. IT CLEARLY SEEMS THAT THESE LIABILITIES D O NOT RELATE TO THE BUSINESS ACTIVITIES OF THE ASSESSEE. IN ABSE NCE OF PROPER HEAD AND NATURE OF THE LIABILITY, THE ASSESSING OFF ICER HAS RIGHTLY DISALLOWED THE AMOUNT OF RS.1,81,29,678/- A ND ADDED BACK TO THE INCOME OF THE ASSESSEE. 5. THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), BAREILLY IS ERRONEOUS IN LAW AND ON FACTS MAY BE CA NCELLED AND THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. 3. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSES SMENT ORDER. AS AGAINST THIS, SHRI PRAVEEN KUMAR, ASSISTANT ACCOUNTANT OF T HE ASSESSEE SUPPORTED THE ORDER OF CIT(A). AT THIS JUNCTURE, IT WAS POINTED OUT BY THE BENCH THAT AS PER THE ASSESSMENT ORDER, THE DISALLOWANCE OF INTEREST OF R S.1115.21 LAC WAS ON THIS BASIS THAT THIS AMOUNT OF INTEREST IS IN RESPECT OF UNSEC URED LOANS FROM VARIOUS STATE GOVERNMENTS AND INSTITUTIONS AND THEREFORE, THE PRO VISIONS OF SECTION 43B ARE APPLICABLE BUT AS PER THE FACTS NOTED BY CIT(A) ON PAGE NO. 3 OF HIS ORDER, SUCH INTEREST AMOUNT IS RELATING TO SUPERVISORY CO-OPERA TIVE SOCIETIES AND STATE GOVERNMENT. IT WAS POINTED OUT THAT SINCE THE FACT S AS PER THE ASSESSMENT ORDER AND AS PER THE ORDER OF CIT(A) ARE DIFFERENT WITHOU T ANY CLEAR FINDING OF CIT(A) THAT THE FACTS NOTED IN THE ASSESSMENT ORDER ARE NO T CORRECT AND SINCE THE 3 DOCUMENTS IN SUPPORT OF THE FACTS NOTED BY CIT(A) A RE NOT PRODUCED BEFORE US, THE MATTER HAS TO GO BACK TO THE FILE OF THE ASSESS ING OFFICER FOR FRESH DECISION ON THE BASIS OF CORRECT FACTS. IN REPLY, BOTH THE SID ES AGREED TO THIS PROPOSITION. 4. AS PER ABOVE DISCUSSION, WE FIND THAT THE FACTS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND THE FACTS NOTED BY CIT(A) IN HIS ORDER ARE DIFFERENT AND THE MATERIAL IS NOT AVAILABLE BEFORE US TO EXAMINE AS TO WHETHER THE FACTS NOTED BY THE ASSESSING OFFICER ARE CORRECT OR FACTS NOTED BY CIT(A) ARE CORRECT AND THEREFORE, WE FEEL IT PROPER THAT THE M ATTER SHOULD GO BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION IN THE LIGHT OF CORRECT FACTS. THEREFORE, WE SET ASIDE THE ORDER OF LEARNED CIT(A) AND RESTOR E THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION AFTER PROV IDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED:12/01/2016 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT . REGISTRAR