ACIT, Karnal V. M/s. Modern Rice & General Mills, Karnal

ITA 3372/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4433 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 27-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; TDS; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCE E, NEW DELHI BEFORE SHRI G.D.AGRAWAL , HONBLE VICE PRESIDENT AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3372 /DEL./2015 (ASSESSMENT YEAR : 2010-11) ACIT VS. MODERN RICE & GENERAL MILLS. CIRCLE, AAYAKAR BHAWAN, C/O. SH. GIRISH ANE JA, CA, SECTOR-12 796, SECTOR-13, U.E. KARNAL KARNAL PAN : AADFM6209L APPELLANT R ESPONDENT ASSESSEE BY : SH. GIRISH ANEJA, CA REVENUE BY : SMT. RINKU SINGH, ADDL. CIT-DR DATE OF HEARING : 13 .05.2019 DATE OF ORDER : 14.05.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT ASSTT. COMMISSIONER OF INCOME TAX (HEREINAFTER REFERRED TO AS 'THE REVENUE') BY FILIN G THE AFORESAID APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATE D 31/03/2015 PASSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS)-R OHTAK QUA THE ASSESSMENT YEAR 2010-11 ON THE GROUNDS INT ER ALIA THAT : ITA NO.3372 /DEL/2015 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT RIGHT IN DELETING THE SALES TAX LIABILITY OF RS. 1,87,00,688/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT RIGHT IN RESTRICTING TH E ADDITION ON ACCOUNT OF LOW YIELD OF RICE BRAN TO RS . 13,97,641/- AS AGAINST RS. 25,69,000/- MADE BY THE AO, IGNORING THE COMPARABLE CASES QUOTED BY6 THE ASSESSING OFFICER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT RIGHT IN DELETING THE DISALLOWANCE OF RS. 6,50,000/- ON ACCOUNT OF SALES PROMOTION EXPENSES, IGNORING THE FACT THAT THE RELEVANT BILLS/ VOUCHERS WERE NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 2. BRIEFLY STATED THAT FACTS NECESSARY FOR ADJ UDICATION OF THE CONTROVERSY AT HAND ARE: THE ASSESSEE FIRM IS INTO THE BUSINESS OF TRADING AND MANUFACTURING OF RICE AND REGULARLY FOL LOWING THE MERCHANTILE SYSTEM OF ACCOUNTING. AO NOTICED THAT T HE ASSESSEE HAS DEBITED AN AMOUNT OF RS. 1,87,00,668/- ON ACCOU NT OF SALE TAX, REGARDING WHICH THE ASSESSEE WAS CALLED UPON TO FUR NISH THE SUPPORTING DOCUMENTARY EVIDENCE TO JUSTIFY ITS CLAI M OF SALE TAX ITA NO.3372 /DEL/2015 3 DURING THE YEAR UNDER ASSESSMENT. DECLINING THE CON TENTIONS RAISED BY THE ASSESSEE, AO PROCEEDED TO CONCLUDE TH AT THE AMOUNT IN QUESTION IS NOT LIABILITY OF THE SALE TAX OF THE YEAR UNDER ASSESSMENT AS NEITHER ANY SUCH AMOUNT HAS BEEN PAID BY THE ASSESSEE NOR ACCRUED DURING THE YEAR UNDER ASSESSME NT AND APPEARS THAT THE ASSESSEE HAS DEBITED THIS AMOUNT T O ADJUST THE PROFIT FOR ITS OWN CONVENIENCE AND THEREBY MADE AN ADDITION OF RS. 1,87,00,668/-. 3. AO FURTHER NOTICE THAT THE ASSESSEE FIRM HAS CLA IMED YIELD OF RICE BRAN AT 5.41% ON THE MILLING OF HIS PADDY. HOW EVER, AO AFTER PERUSING THE HISTORY OF SHOWING YIELD OF RICE BRAN IN THE EARLIER YEAR AT 7.85% AND 7.31% FOR A.Y. 2008-09 AND 2007-0 8 RESPECTIVELY ESTIMATED THE YIELD OF RICE BRAN AT 7. 25% AND THEREBY MADE AN ADDITION OF RS. 25,69,000/- TO THE TOTAL IN COME OF THE ASSESSEE. 4. ASSESSEE DEBITED AN AMOUNT OF RS. 6,50,000/- IN P & L ACCOUNT UNDER THE HEAD SALES PROMOTION EXPENSES. ON FAILURE OF THE ASSESSEE TO PRODUCE BILLS / VOUCHERS AO MADE DISALLOWANCE THEREOF AND ADDED THE AMOUNT OF RS. 6,50,000/- TO T HE INCOME OF THE ASSESSEE. ITA NO.3372 /DEL/2015 4 5. ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) BY WAY OF FILING THE APPEAL WHO HAS DELETED THE ADDITION BY P ARTLY ALLOWING THE APPEAL. FEELING AGGRIEVED THE REVENUE HAS COME UP THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. GROUND NO. 1 6. UNDISPUTEDLY, ASSESSEE HAS BROUGHT ON RECORD ADD ITIONAL EVIDENCE IN THE FORM OF ACCOUNT OF VAT INPUT TAX AC COUNT FROM 01.04.2009 TO 31.03.2010, TRADING ACCOUNT OF VAT ACCOUNT FOR 2004-05 AND 2010-11 AVAILABLE AT PAGE 53 TO 56 OF T HE PAPER BOOK, AND A/C OF RICE BRAN SALE A/C FROM 01.04.2009 TO 31.03.2010 AVAILABLE AT PAGE 57 TO 58 OF PAPER BOOK WHICH THE LD. CIT(A) HAS RELIED UPON TO DELETE THE ADDITION, BUT WITHOUT PRO VIDING AN OPPORTUNITY TO THE AO TO VERIFY THE ADDITIONAL EVID ENCES. 7. WE HAVE AGREED IN PRINCIPLE APPLIED BY THE LD. C IT(A) FOR DELETION OF ADDITION MADE BY THE AO BUT THE ENTIRE ADDITIONAL EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE DURING THE APPELLATE PROCEEDING IS REQUIRED TO BE VERIFIED BY THE AO. SO WE DEEM IT APPROPRIATE TO SEND THIS ISSUE BACK TO THE AO TO DE CIDE AFRESH AFTER EXAMINING THE ADDITIONAL EVIDENCES BROUGHT ON RECOR D BY THE ASSESSEE. SO GROUND NO. 1 IS DETERMINED IN FAVOUR O F THE ASSESSEE FOR STATISTICAL PURPOSES. ITA NO.3372 /DEL/2015 5 GROUND NO. 2 8. IN SO FAR AS QUESTION OF RESTRICTING THE ADDITIO N OF RS. 25,69,000/- TO RS. 13,97,641/- BY LD. CIT(A) IS CON CERNED AO HAS ESTIMATED THE YIELD OF RICE BRAN TO 7.25% AS AG AINST 5.41% SHOWN BY THE ASSESSEE BY TAKING INTO CONSIDERATION THE YIELD OF RICE BRAN IN A.Y. 2008-09 AND 2009-10 @ 7.31% AND 7 .85% RESPECTIVELY. HOWEVER, WE ARE OF THE CONSIDERED VIE W THAT STRAIGHT-WAY WE CANNOT JUMP TO THE CONCLUSION IN ES TIMATING THE ADDITION QUA THE YIELD OF RICE BRAN BY TAKING INTO ACCOUNT HIGH YIELD SHOWN IN THE EARLIER YEARS BY THE ASSESSEE BE CAUSE IT DEPENDS UPON VARIOUS OTHER FACTORS LIKE QUALITY OF THE PADD Y, QUANTUM OF PADDY MILLED ETC. SO, WE ARE OF THE CONSIDERED VIE W THAT THE LD. CIT(A) BY TAKING INTO CONSIDERATION THE PADDY MILLE D AND OTHER FACTORS HAS RIGHTLY ASSESSED THE YIELD OF THE RICE BRAN AT 6.25% AND RESTRICTED THE DISALLOWANCE TO RS. 13,97,641/- AS A GAINST 25,69,000/- MADE BY THE AO. SO WE CONFIRM THE FINDI NGS RETURNED BY LD. CIT(A), HENCE, GROUND NO. 2 IS DETERMINED AG AINST THE REVENUE. GROUND NO. 3 9. ASSESSEE DEBITED AN AMOUNT OF RS. 6,50,000/- IN P & L ACCOUNT UNDER THE HEAD SALES, PROMOTION AND EXPENS ES WHICH ITA NO.3372 /DEL/2015 6 HAS BEEN DISALLOWED BY THE AO FOR WANT OF DOCUMENTA RY EVIDENCE. BEFORE LD. CIT(A) THE ASSESSEE HAS PRODUC ED THE DOCUMENTARY EVIDENCE IN THE FORM OF FULL PARTICULAR S OF THE FIRM WHO CARRIED OUT SALES PROMOTIONAL ACTIVITIES ON BE HALF OF THE ASSESSEE ALONG WITH CERTIFICATE FOR DEDUCTING TDS B UT ALL THESE DOCUMENTS HAVING BEEN ENTERTAINED IN ADDITIONAL EVI DENCE, HAVE NOT BEEN GOT VERIFIED FROM THE AO BY CALLING A REMA ND REPORT. SO WE ARE OF THE CONSIDERED VIEW THAT THIS ISSUE IS AL SO REQUIRED TO BE SENT BACK TO THE AO TO DECIDE AFRESH IN VIEW OF THE ADDITIONAL EVIDENCES ENTERTAINED BY LD. CIT(A) AFTER PROVIDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SO GROUND NO. 3 IS DETERMINED IN FAVOUR OF THE REVENUE FOR STATISTICAL PURPOSES. 10. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE GROUND NO. 1 AND 3 ARE REMANDED BACK TO THE AO TO DECIDE AFRESH AFTE R PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. RESULTA NTLY APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PUR POSS. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF MAY, 2019. SD/- SD/- (G.D.AGRAWAL) (KULDIP SINGH) VICE PRESIDENT JUDICIAL ME MBER DATED: 14 TH DAY OF MAY, 2019 BR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT ITA NO.3372 /DEL/2015 7 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI DATE OF DICTATION 13.05.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.05.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 14.05.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 14.05.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 14.05.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 14.05.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER