Income Tax Officer-VI(I), Lucknow V. M/s. Singhal Paints Pvt.Ltd., Lucknow

ITA 314/LKW/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9113 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 31-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H P SINGH
• Keywords: Opportunity of being heard

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.314/LKW/2012 ASSESSMENT YEAR:2009 - 10 M/S SINGHAL PAINTS PVT. LTD., 1, AISHBAGH, LUCKNOW. PAN:AADCS4087R VS INCOME TAX OFFICER VI(I), LUCKNOW. (RESPONDENT) (APPELLANT) SHRI K. C. MEENA, D. R. APPELLANT BY SHRI H. P. SINGH, ADVOCATE RESPONDENT BY 09/12/2014 DATE OF HEARING 23 /01/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, LUCKNOW DATED 30/04/2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ALLOWING LOSS DUE TO THE FIRE IN EXCESS OF THE LOSS ESTIMATED BY THE INSURANCE COMPANY OF RS.59,06,413/ - EVEN THOUGH THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE OF THE SAME. 3. LEARNED D.R. OF THE REVENUE SUPPORTE D THE ASSESSMENT ORDER. HE ALSO SUBMITTED THAT COPY OF LETTER RECEIVED FROM NATIONAL INSURANCE COMPANY LTD. REGARDING SETTLEMENT OF CLAIM IS AVAILABLE ON PAGE NO. 42 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT FINAL SURVEY REPORT OF NATIONAL INSURANCE COMP ANY LTD. DATED 05/07/2008 IS AVAILABLE ON RECORD AND IT WAS POINTED OUT THAT THE LOSS WAS ASSESSED AT RS.60,76,419/ - AND THEREAFTER , THE CLAIM WAS AVERAGED OUT 2 BECAUSE THE ASSESSEE WAS HAVING INSURANCE OF RS. ONE CRORE ONLY AND THE STOCK WAS OF RS.156.75 LACS AND THEREFORE, LIABILITY OF INSURANCE WAS REDUCED TO RS.30,96,054/ - . HE SUBMITTED THAT WHEN ACTUAL LOSS WAS RS.60,76,419/ - AS PER THE SURVEY REPORT, HOW MORE LOSS CAN BE ALLOWED IN INCOME - TAX PROCEEDINGS. HE FURTHER SUBMITTED THAT THE ORDER OF CIT(A ) IS WITHOUT CONSIDERING THIS REPORT AND THEREFORE, HIS ORDER IS NOT SUSTAINABLE. 4. LEARNED A .R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS NOTED BY CIT(A) IN P ARA 7 OF HIS ORDER THAT LOSS OF RS.94,23,723/ - WAS SUFFERED BY THE ASSESSEE AND THE CLAIM FINALIZED BY THE INSURANCE COMPANY WAS RS.35,17,310/ - . HE FURTHER NOTED THAT THE ASSESSEE IS THEREFORE ENTITLED TO CLAIM THE BALANCE OF LOSS OF RS.59,06,413/ - IN THE PRESENT YEAR AND THE SAME IS ALLOWABLE. HENCE, IT IS SEEN THAT THE REPORT OF THE SURVEYOR OF THE INSURANCE COMPANY WAS NOT AT ALL CONSIDERED BY THE CIT(A). EVEN AS PER LETTER DATED 07/12/2011, THE CONSIDERED LOSS WAS RS.64,48,991/ - OUT OF WHICH THE INSURANCE COMPANY HAS SETTLED THE CLAIM AT RS.35,17,310/ - AND THEREFORE, THE DIFFERENCE OF THESE TWO AMOUNTS ONLY CAN BE AN ALLOWABLE DEDUCTION. AS PER THE REPORT OF THE SURVEYOR OF THE INSURANCE COMPANY DATED 05/07/2008, IT IS SEEN THAT NET ASSESSED LOSS WAS WORKED OUT B Y SURVEYOR OF THE INSURANCE COMPANY AT RS.60,76,419/ - . IN PARA 11.05.05 OF THE SURVEY REPORT, IT IS REPORTED THAT THE ASSESSEE HAS CLAIM ED THE VALUE OF LOSS OF GOODS IN PROCESS AT RS.69.38 LACS BUT AS PER ASSESSEES OWN LETTER DATED 07/11/2007, TOTAL STOC K OF GOODS IN PROCESS WAS ONLY OF RS.60,83,865/ - . IT IS FURTHER NOTED IN THE SAME PARA THAT WHILE WORKING OUT THIS AMOUNT OF WIP, THE ASSESSEE HAS ASSUMED MANUFACTURING EXPENSES @20% WHILE THE EXPENSES FOR THE CURRENT YEAR AS PER THEIR OWN ADMISSION ARE O NLY 5.8% AND THEREFORE, THIS FIGURE OF RS.60.83 LACS IS EXCESSIVE AND SAME WAS SCALED DOWN TO RS.52,20,080/ - . SINCE THE ORDER OF CIT(A) IS WITHOUT CONSIDERING THE REPORT OF THE SURVEYOR OF THE INSURANCE COMPANY, WE FEEL THAT THE ORDER OF CIT(A) IS NOT SUS TAINABLE. 3 HENCE, WE SET ASIDE HIS ORDER AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH DECISION AFTER CONSIDERING THE REPORT OF THE SURVEYOR OF THE INSURANCE COMPANY. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO HIS FIL E FOR DECIDING AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH SIDES . 6. 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 MEMBER DATED: 23 /01/2015. *C.L.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