Kissan Sahkari Chini Mills Ltd, V. DCIT,

ITA 3283/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8671 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 15-07-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 04-11-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B S GUPTA
• Assessee Lawyers: K S ARORA
• Keywords: Business income

Judgement Text

I.T.A. NO.3283/DEL/2008 1 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH D BEFORE SHRI K.G.BANSAL, ACCOUTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ITA NO. 3283 /DEL/2008 (ASSESSMENT YEAR 2005-06) THE KISSAN SAHKARI CHINI MILLS LTD, VS. DCIT, NAJIBABAD, DISTT. BIJNOR. NAJIBABAD, BIJNOR (APPELLANTS) (RESPONDENTS) APPELLANT BY: SHRI K.S.ARORA, FCA RESPONDENT BY: SHRI B.S.GUPTA, SR. DR ORDER PER GEORGE MATHAN, JM: 1. THIS APPEAL BY THE ASSESSEE HAS BEEN PREFERRED A GAINST THE ORDER OF LD. CIT(A), BAREILLY IN APPEAL NO.434/ACIT/NZB/2007-08 DATED 1.9.2008 FOR THE ASSESSMENT YEAR 2005-06. SHRI S. K. ARORA, FCA APPEARED FOR THE ASSESSEE AND SHRI B K GUPTA, SR. D R REPRESENTED ON BEHALF OF THE REVENUE. 2. IT WAS SUBMITTED BY THE LD. A.R. AT THE TIME OF HEARING THAT THE LD. CIT(A) HAD CONFIRMED THE DISALLOWANCE OF RS.50,000/- OUT OF AMOUNT OF RS.1 LACS DISALLOWED B Y I.T.A. NO.3283/DEL/2008 2 THE ASSESSING AUTHORITY ON ACCOUNT OF UNVERIFIABLE EXPENSES. IT WAS THE SUBMISSION THAT THE ASSESSING AUTHORITY HAD NOT PIN POINTED ANY SPECIFIC DEFECT I N THE BOOKS OF ACCOUNTS AND THE BOOKS OF ACCOUNTS OF THE ASSESSEE HAD BEEN DULY AUDITED BY THE AUDITORS AS APPOINTED BY THE CANE COMMISSIONER. IT WAS THE SUBMISSION THAT THE AD-HOC DISALLOWANCE AS MADE BY THE ASSESSING AUTHORITY FOR THE ASSESSMENT YEAR 1995-96 IN THE ASSESSEES OWN CASE HAD ALSO BEEN DELETED BY THE ITAT. IT WAS THE SUBMISSION THAT AS NO DEFECTS IN THE BOOKS OF ACCOUNTS HAD BEEN POINTED OUT AND NO SPECI FIC NON VERIFIABLE VOUCHERS OR RECEIPTS HAVE BEEN POINT ED OUT BY THE LD. CIT(A), NO DISALLOWANCE WAS CALLED F OR. HE DREW OUR ATTENTION TO PAGE 27 OF THE PAPER BOOK WHICH IS A COPY OF LETTER ENCLOSING THE DETAILS OF EXPENSES AS WAS FILED BEFORE THE ASSESSING AUTHORIT Y. IT WAS THE SUBMISSION THAT THE ASSESSING AUTHORITY HAD ALSO NOT CALLED FOR ANY FURTHER EXPLANATION FROM TH E ASSESSEE IN REGARD TO ANY OF THE NON VERIFIABLE NAT URE OF EXPENSES. IN REPLY, THE LD. D.R. VEHEMENTLY SUPPOR TED THE ORDERS OF THE ASSESSING AUTHORITY AND THE CIT(A ). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOTICED THAT THE ASSESSING AUTHORITY IN THE ASSESSMENT ORDE R THOUGH HAS MENTIONED THAT NO PROOF OF THE EXPENDIDT URE I.T.A. NO.3283/DEL/2008 3 WAS FURNISHED AND THE ENTIRE EXPENSES WERE SMALL AMOUNT FOR WHICH NO SINGLE VOUCHER WAS PRODUCED, TH E LETTER DATED 14.12.2007 OF THE ASSESSEE AS FOUND AT PAGE 27 OF THE PAPER BOOK SHOWS THAT ALL THE VOUCHERS HA D BEEN PRODUCED BEFORE THE ASSESSING AUTHORITY. IT I S ALSO NOTICED THAT THE ASSESSING AUTHORITY HAS NOT MENTIONED ANYTHING ABOUT ANY FURTHER CLARIFICATION HAVING BEEN CALLED FROM THE ASSESSEE. IT IS FURTHER NOTICED THAT THE ASSESSING AUTHORITY HAS NOT PINPOI NTED ANY SPECIFIC DEFECT FOR WHICH HE IS MAKING THE DISALLOWANCE AND THE DISALLOWANCE MADE BY HIM IS ON AD-HOC BASIS. IT WAS ALSO NOTICED THAT THE LD. CIT (A) HAS AGAIN ON AD HOC BASIS REDUCED THE DISALLOWANCE FROM RS.1 LACS TO RS.50,000/-. OBVIOUSLY THE DISALLOWANCE OF EXPENSES CANNOT BE MADE ON AD-HOC BASIS. SPECIFIC DEFECT HAS TO BE PINPOINTED AND ON LY ON SUCH SPECIFIC DEFECT THE DISALLOWANCE CAN BE MADE A ND THAT HAS NOT BEEN DONE. IN THESE CIRCUMSTANCES THE DISALLOWANCE AS CONFIRMED BY THE CIT(A) IS LIABLE T O BE DELETED AND WE DO SO. 4. IT WAS FURTHER SUBMITTED BY THE LD. A.R. THAT TH E CIT(A) HAD CONFIRMED THE ACTION OF THE ASSESSING AUTHORITY IN TREATING THE INTEREST EARNED AS INCOME FROM OTHER SOURCES INSTEAD OF BUSINESS INCOME. I WAS FAIRLY I.T.A. NO.3283/DEL/2008 4 AGREED BY BOTH THE SIDES THAT THE ISSUE WAS SQUAREL Y COVERED BY THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSM ENT YEAR 2004-05 IN I.T.A. NO.1572/DEL/2008 AND 1934/DEL/2008 DATED 29.5.2009 WHEREIN IN PARA 9 & 1 0 OF THE SAID ORDER THIS TRIBUNAL HAS FOLLOWED THE DE CISION IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 IN I.T.A.NO.3634/DEL/2004 UPHOLDING THE ACTION OF THE CIT(A) AND THE ASSESSING AUTHORITY IN TREATING THE INTEREST EARNED AS INCOME FROM OTHER SOURCES. FOR HOLDING SO, THE TRIBUNAL HAS HELD AS FOLLOWS: GROUND NO.5 IS DIRECTED AGAINST THE TREATMENT GIVE N TO THE INTEREST OF RS.71,82,881/- EARNED BY THE ASSESSEE. WHEREAS THE ASSESSEE CLAIMS THAT THE INTEREST SHOULD BE ASSESSED AS BUSINESS INCOME, THE DEPARTMENTS STAND IS THAT IT SHOULD BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE DEPARTMENTS STAND HAS BEEN UPHELD BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1992-93, 1993-94 AND 1997-98 BY ORDER DATED 28.2.2006 IN I.T.A. NO.2886/DEL/2002. RESPECTFULLY FOLLOWING HE ABOVE ORDER, WE CONFIRM THE ACTION OF THE INCOME-TAX AUTHORITIES AND DISMISS THE GROUND. RESPECTFULLY FOLLOWING THE ORDER OF TRIBUNAL FOR ASSESSMENT YEARS 1992-93, 1993-94, 1997-98 DATED 28.2.2006 IN I.T.A. /2886/DEL/02 ETC. AND IN I.T.A./3634/DEL/04 FOR INCOME SHOULD BE ASSESSED I.T.A. NO.3283/DEL/2008 5 UNDER THE HEAD INCOME FROM OTHER SOURCES. THIS GROUND OF APPEAL RAISED BY ASSESSEE IS DISMISSED. 5. RESPECTFULLY FOLLOWING THE DECISION OF COORDINAT E BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE REFERRED TO SUPRA, THE FINDING OF LD. CIT(A) ON THI S ISSUE STANDS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. 7. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 17 TH JULY 2009. (K.G.BANSAL) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:17 TH JULY, 2009 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI