Deputy Commissioner of Income Tax Circle-6(1)(2), Bangalore V. M/s Sri Chamundeshwari Sugars Limited , Bangalore

ITA 3361/BANG/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8898 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 21-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: POO JA MARU
• Keywords: Additional evidence
• Section: 143(3); 142(1); 115JB; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES B BENCH: BANGALORE BEFORE SHRI JASON P BOAZ , ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA. NO. 3361 /BANG/2018 (ASSESSMENT YEAR: 20 06 - 07 ) DY. COMMISSIONER OF INCOME TAX, CIRCLE 6(1)(2), BANGALORE. VS. M/S. SRI CHAMUNDESHWARI SUGARS LIMITED, NO.76, ULSOOR ROAD, BANGALORE - 560 042 . PAN AACCS 5004R (APPELLANT) (RESPONDENT) ASSESSEE BY: S MT. POO JA MARU, C.A. REVENUE BY: MS. NEERA MALHOTRA, CIT (D.R) DATE OF HEARING : 27.06 .2019 DATE OF PRONOUNCEMENT : 09 .07 .2019 O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 2, BANGALORE UNDER SECTION 143(3) AND 250 OF THE INCOME TAX ACT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 2 ITA NO.3361/BANG/2018 3. THE B RIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURE OF SUGAR, DISTILLERY PRODUCTS AND BIO COMPOST AND FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2006 - 07 DECLARING NIL INCOME. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCR UTINY AND NOTICE UNDER SE CTION143(2) & 142(1) OF THE ACT ARE ISSUED. THE LEARNED AUTHORISED REPRESENTATIVE APPEARED FROM TIME TO TIME AND THE CASE WAS DISCUSSED. THE ASSESSING OFFICER CONSIDERED THE FINANCIAL STATEMENTS AND AFTER DISCUSSION S AND VERIF ICATION MADE A DISALLOWANCE OF RS.1,30,37,519 IN RESPECT OF VARIOUS EXPENSES AND ALLOWED THE SET OFF OF THE 3 ITA NO.3361/BANG/2018 B ROUGHT FORWARD LOSSES AND PASSED THE ORDER UNDER SECTION 143(3) DT.22.12.2008 AND CALCULAT ED THE TAX UNDER SECTION 115JB OF THE ACT. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE LEARNED CIT(APPEALS). THE CIT(APPEALS) HAVING CONSIDERED THE INFORMATION FILED IN THE COURSE OF APPELLATE PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS COMPLIED WITH THE DIRECTIONS OF APPELLATE AUTHORITY I N RESPECT OF CLAIMS AND DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM AND PARTLY ALLOWED THE APPEAL. AGGRIEVED BY THE CIT (APPEALS) ORDER, THE REVENUE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMIT TED THA T THE CIT(APPEALS) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.91 LAKHS AS THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE WHICH WAS NOT PROVIDED TO THE ASSESSING OFFICER AND ALSO G ROSS VIOLATION OF RULE 46A OF THE IT RULES AND ON THE SECOND DISPUTED ISSUE THE LEARNED DEPARTMENTAL REPRESENTATIVE EMPHASIZED THAT THE LEARNED CIT(APPEALS) HAS RESTRICTED THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF RS.10 LAKHS WHERE THE ASSESSEE HAS FILED THE INFORMATION I N LEDGER ACCOUNT AND ALSO THE ASSESSING OFFICER W A S DEPRIVED TO VERIFY TH E CLAIM AND PRAYED FOR SETTING ASIDE THE ORDER OF THE CIT(APPEALS) AND ALLOW THE GROUNDS OF APPEAL OF REVENUE. CONTRA, THE LEARNED AUTHORISED RE PRESENTATIVE SUPPORTED THE ORDERS OF THE LEARNED CIT(APPEALS) AND MADE SUBMISSIONS THAT THE REQUIRED INFORMATION WAS ALSO SUBMITTED IN THE ASSESSMENT PROCEEDINGS. 4 ITA NO.3361/BANG/2018 5. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. ON THE FIRST DIS PUTED ISSUE WITH RESPECT TO DELETION OF BUSINESS PROMOTION EXPENSES AMOUNTING TO RS.91 LAKHS . WE, ON PERUSAL OF THE CIT (APPEALS) ORDER AT PAGE 3 OF THE ORDER FOUND THAT THE ASSESSEE HAS FILED THE AGREEMENT ENTERED BY THE COMPANY WITH JOHN DISTILLERIE S LIMITED IN RESPECT OF LEASE OPERATIONS AS ANNEXURE 2 & 3 . WHEREAS THE ASSESSEE COULD NOT PRODUCE THE S A ME AS THEY WERE MISPLACED BY THE STAFF MEMBERS. SINCE THE AGREEMENTS ARE FOUND NOW , THEY ARE FILED IN APPELLATE PROCEEDINGS. T HE CIT (APPEALS) HAS GRANTED RELIEF BASED ON DETAILS FILED BY THE ASSESSEE BUT WHEN THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE IN THE APPELLATE PROCEEDINGS , THE CIT (APPEALS) SHOULD HAVE CALL FOR THE REMAND REPORT OR COMMENTS ON THESE DOCUMENTS FROM THE A.O . WHEREAS THE LEARNED CIT (APPEALS) HAS N O T A L L O W E D THE ASSESSING OFFICER TO VERIFY THESE AGREEMENTS AS THEY WERE NOT AVAILABLE DURING THE ASSESSMENT PROCEEDINGS. THEREFORE WE FOUND STRENGTH IN THE S UBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE ON GROSS VIOLATION OF PROVISIONS OF RULE 46A OF IT RULES AS THE ASSESSING OFFICER WAS DEPRIVED TO CHECK THE GENUINENESS OF THE AGREEMENT . ACCORDINGLY, WE RESTORE THIS DISPUTED ISSUE TO THE FILE OF CIT (APPEALS) TO READJUDICATE AFRESH AND CALL FOR A REMAND REPORT FROM THE AS SESSING OFFICER AND FURTHER THE ASSESSEE SH OULD BE PROVIDE D WITH ADEQUATE OPPORTUNITY OF HEARING AND SHALL CO - OPERATE IN SUBMITTING THE INFORMATION CALLED FOR 5 ITA NO.3361/BANG/2018 ON THIS DISPUTED ISSUE , AND THE GROUND OF APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PU RPOSES. 6. ON THE SECOND DISPUTED ISSUE, THE LEARNED DEPARTMENTAL REPRESENTATIVE ARGUED THAT THE CIT (APPEALS) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO RS.10 LAKHS , WHEREAS THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.20 LAKHS IN THE ASSESSMENT PROCEEDINGS. THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED THE INFORMATION IN THE COURSE OF APPELLATE PROCEEDINGS REFERRED AT THE PARAGRAPH 5.3.1 OF THE CIT (APPEALS) ORDER AND WHERE AS THE CIT (APPEALS) CONSIDERED THE LEDGER ACCOUNTS AN D GRANTED THE RELIEF. CONTRA T HE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE INFORMATION WAS FILED IN THE ASSESSMENT PROCEEDINGS AND REFERR ED TO FINDING OF THE ASSESSING OFFICER AT PAGE 3 OF THE ORDER WHERE VARIOUS DETAILS WITH REFERENCE TO THE FINANCIAL STATEMENTS AND BOOKS OF ACCOUNTS WERE PERUSED AND ISSUES WERE IDENTIFIED. WE FIND THE LEDGER ACCOUNT, FORMS PART OF THE BALANCE SHEET FILED BY THE ASSESSEE. HENCE NO NEW INFORMATION IS FILED BEFORE THE CIT (APPEALS). WE FIND THE LEARNED CIT (APPEALS) AFTER CONSIDERING THE LEDGER ACCOUNT COPIES AND FINDINGS OF THE ASSESSING OFFICER, GRANTED RELIEF AND TOOK A REASONABLE VIEW OF RESTRIC TING THE ADDITION. ACCORDINGLY WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF CIT (APPEALS) ON THIS DISPUTED ISSUE AND UPHOLD THE SAME AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 6 ITA NO.3361/BANG/2018 7. IN THE RESULT, THE REVENUES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 T H JULY, 2019. SD / - S D / - ( J A S O N P B O A Z ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: .07. 2019. *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE