Vaidyanath Sant Eknath Sakhar Udyog, Beed V. Assistant Commissioner of Income-tax,

ITA 280/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9408 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 25-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PRASANN A L JOSHI
• Keywords: Rectification of order
• Section: 37(1); 154

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.280/PUN/2016 / ASSESSMENT YEAR : 2011-12 VAIDYANATH SANT EKNATH SAKHAR UDYOG, C/O. VAIDYANATH SAHAKARI SAKHAR KARKHANA LIMITED, AT PANGRI, TALUKA. PARLI, DIST. BEED 431 515 PAN : AAGFV6446H . /APPELLANT VS. ACIT, CIRCLE-1, AURANGABAD . / RESPONDENT ASSESSEE BY : SHRI PRASANNA L. JOSHI REVENUE BY : SHRI RAJEEV KUMAR, CIT / DATE OF HEARING : 22.01.2018 / DATE OF PRONOUNCEMENT: 22.01.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-2, AURANGABAD, DATED 09-12-2015 FOR THE A.Y. 2011-12. 2. ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) ERRED IN NOT CONSIDERING MERITS OF THE APPEAL WHEN BOTH ASSESSMENT ORDER U/S.143(3) DATED 18-02-2014 AND RECTIFICATION THEREOF U/S.154 ON 26-02-2014 WERE BEFORE THE LD.CIT(A). 2. LD.CIT(A) ERRED IN IGNORING FACTS, CIRCUMSTANCES AND COMPULSIONS REQUIRING THE APPELLANT TO PAY FARMERS AGAINST THEI R SUPPLY OF SUGARCANE FOR SEASON 2010-11 PRICES OF : A. RS.1750/MT FOR 87,351.79 MT OF CANE PURCHASED DURIN G 30-10-2010 TO 15-12-2010; AND RS.1650/MT FOR 1,74,057.97 MT OF CANE PURCHASED DURING 16-12-2010 TO 31-03-2011. ITA NO.280/PUN/2016 VAIDYANATH SANT EKNATH SAKHAR UDYOG 2 3. LD.CIT(A) OUGHT TO HAVE DELETED DISALLOWANCE MAD E BY THE LD. AO OF RS.2,61,08,696.00 BEING @ RS.150/MT FOR CANE PURCHASED FROM 16-12-2010 TO 31-03-2011 AS THIS WAS EXPENDITURE IN CURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF ITS BUSINESS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APP ELLANT, IT MAY BE HELD THAT ENTIRE ACTUAL CANE PRICE PAID BY THE APPE LLANT TO FARMERS FOR SUGARCANE PURCHASED BE ALLOWED AS THE APPELLANTS E XPENDITURE IN COMPUTING ITS BUSINESS PROFITS. 3. BEFORE US, AT THE OUTSET, LD. AR FOR THE ASSESSEE SUB MITTED THAT IN PRINCIPLE, THE ASSESSEE PROPOSES TO WITHDRAW THIS APPE AL AND REQUESTED FOR DISMISSING THE SAME. ON ENQUIRY FROM THE BE NCH, THE REASONS FOR SUCH REQUEST, LD. AR NARRATED THE FACTS STA TING THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING INCOME OF RS. 4,03,760/- IN THE ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT. AO M ADE ADDITION OF RS. 12,04,52,499/- ON ACCOUNT OF EXCESS SUGARCA NE PRICE PAID BEFORE END OF THE PREVIOUS YEAR AND ALSO LATER AFTER 31-03-2011. FOR THIS, AO INVOKED THE PROVISIONS OF SECTION 37(1) R.W.S. 40A(2) OF THE ACT. SUBSEQUENTLY, THE ASSESSEE FILED RECTIFICATION APP LICATION DATED 26-02-2014 ASKING FOR DELETION OF THE SAID ADDITION. IN REPLY, TH E AO PASSED RECTIFICATION ORDER DATED 26-02-2014 RESTRICTING THE AD DITION TO RS.2,61,08,695/- IN PLACE OF RS.12,04,52,499/-. AO DELETED THE ADDITION RELATABLE TO THE PAYMENTS MADE TILL 31-03-2011. ACCORDINGLY, THE ASSESSED INCOME STANDS RECTIFIED AND DETERMINED AT RS.2,65,12,460/-. THE REASONS ARE GIVEN IN PARA NO.6 OF TH E RECTIFICATION ORDER WHICH READS AS UNDER : 6. I HAVE CONSIDERED THE SUBMISSION OF THE ASSESSE E FIRM. TAKING INTO CONSIDERATION FACTS OF THE CASE AND THE CIRCUM STANCES, I AM OF THE VIEW THAT THE PRICE PAID UPTO CLOSE OF FINANCIAL YE AR NEEDS TO BE ALLOWED. ACCORDINGLY, THE CANE PRICE PAYMENT MADE TO THE MEMBERS UPTO 31-03-2011, ARE REQUIRED TO BE ALLOWED AND THE SAME PAID AFTER 31- 03-2011 NEEDS TO BE DISALLOWED. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE FIRM HAS MADE PAYMENT OF RS.82,51,32,082/- UPTO THE CLOSURE OF THE YEAR, I.E. 31-03-2011 AND RS.2,61.08,695/- H AS BEEN MADE AFTER 31-03-2011. THEREFORE, AN AMOUNT OF RS.2,61,08,695 /- IS TO BE REPLACED WITH THE FIGURE OF ADDITION MADE AT RS.12,39,88,555 /- (SIC). ITA NO.280/PUN/2016 VAIDYANATH SANT EKNATH SAKHAR UDYOG 3 4. DURING THE FIRST APPELLATE PROCEEDINGS, ASSESSEE CONTE NDED THAT THE ENTIRE ADDITION ON THIS ISSUE HAS TO BE DELETED INCLUD ING THE AMOUNTS PAID BY THE ASSESSEE AFTER 31-03-2011. ON FINDIN G THE SAID REQUEST OF ASSESSEE BEING OUTSIDE THE SCOPE OF PROVISIONS OF SECTION 154 OF THE ACT, THE CIT(A) DID NOT ENTERTAIN THE REQUES T OF THE ASSESSEE. HE ACCORDINGLY DISMISSED THE APPEAL OF THE ASSESSEE. 5. WITH THE FACTUAL MATRIX NARRATED ABOVE AND AGGRIEVED WITH THE ORDER OF THE CIT(A), LD. AR FOR THE ASSESSEE RAISED THE S AID GROUNDS WHICH ARE ALREADY EXTRACTED ABOVE. BEFORE US, DEVIATING FR OM THE SAID GROUNDS AND CONSIDERING THE FACT THAT THE GROUNDS IN TH IS APPEAL ARE NOT SUSTAINABLE IN LAW OR FAIRLY ACKNOWLEDGING THAT THE PR OVISIONS OF SECTION 154 OF THE ACT DOES NOT ALLOW THE CIT(A) TO GRANT RELIEF IN RESPECT OF THE PAYMENTS MADE BY THE ASSESSEE AFTER 31 -03-2011, I.E. BEYOND THE ASSESSMENT YEAR UNDER CONSIDERATION, LD. AR FOR THE ASSESSEE NOW CONSIDERS TO DROP THE APPEAL IN ORDER TO BRING END TO THIS LITIGATION. HE ACCORDINGLY PROCEEDED TO WITHDRAW THE APPE AL FILED BY THE ASSESSEE. 6. ON HEARING BOTH THE SIDES ON THIS ISSUE, WE FIND THE PR AYER OF THE ASSESSEE IS REASONABLE. THEREFORE, WE NEED NOT TRA VEL INTO THE MERITS OF THE GROUNDS OF THE APPEAL. ACCORDINGLY, THE GRO UNDS RAISED BY THE ASSESSEE ARE DISMISSED AS WITHDRAWN. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JANUARY, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 22ND JANUARY, 2018. ITA NO.280/PUN/2016 VAIDYANATH SANT EKNATH SAKHAR UDYOG 4 / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT(A) - 2, AURANGABAD 4 . 5. CIT - 2, AURANGABAD % , , A BENCH PUNE; 6 . / GUARD FILE.