Taneja Aerospace & Aviation, Pune V. Dy. CIT Cir. 7, Pune, Pune

ITA 340/PUN/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3258 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 19-03-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHAY DAMLE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER I.T.A. NO. 340/PN/2009: A.Y. 2005-06 TANEJA AEROSPACE & AVIATION CTS NO. 199 PLOT NO. 3, LUNKAD TOWERS VIMAN NAGAR, PUNE-411 004 PAN AAACT 4159 J APPELLANT VS. DY. CIT CIR. 7 PUNE RESPONDENT APPELLANT BY: NONE (WRITTEN SUBMISSIONS) RESPONDENT BY: SHRI ABHAY DAMLE ORDER PER RAJENDRA SINGH, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30-12-2008 OF CIT(A) FOR A.Y. 2005-06. THE ASSESSEE IN THIS APPEAL HAS DISPUTES ON FOUR GROUND S. 2. AT THE TIME HEARING OF THE APPEAL NO ONE APPEARE D TO REPRESENT THE CASE ON BEHALF OF THE ASSESSEE. HOWE VER, WRITTEN SUBMISSIONS DATED 5 TH AUGUST 2010 HAS BEEN RECEIVED IN WHICH THE ASSESSEE HAS SUBMITTED THAT THE CASE M AY BE PAGE 2 OF 7 ITA NO. 340/PN/2009 TANEJA AEROSPACE & AVIATION A.Y. 2005-06 DECIDED ON THE BASIS OF STATEMENT OF FACTS GIVEN WI TH THE MEMORANDUM OF APPEAL. THE APPEAL IS THEREFORE, DEC IDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LEARNED DR WHO SUPPORTED THE ORDERS OF AUTHORIT IES BELOW. 3. THE FIRST DISPUTE IS REGARDING ADDITION ON ACCOU NT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AMOU NTING TO RS. 1,17,919/-. THE A.O NOTED THAT THE SAID CONTRI BUTION HAD BEEN PAID BY THE ASSESSEE AFTER DUE DATE PRESCRIBED UNDER THE RELEVANT STATUTE AND EVEN AFTER THE GRACE PERIO D OF FIVE DAYS. THE A.O THEREFORE, MADE AN ADDITION U/S 36(1 )(VA) OF THE ACT. IN APPEAL, THE ASSESSEE DID NOT PRESS THIS GROUND AND THEREFORE, THE CIT(A) DISMISSED THE GROUND RAIS ED, AGGRIEVED BY WHICH THE PRESENT APPEAL HAS BEEN FILE D. 4. BEFORE US, THE ASSESSEE HAS ONLY FILED WRITTEN SUBMISSIONS AND EVEN IN THE SAID SUBMISSIONS NO FRE SH MATERIAL HAS BEEN PLACED ON RECORD IN RELATION TO DISALLOWANCE OF EMPLOYEES CONTRIBUTION TOWARDS PRO VIDENT PAGE 3 OF 7 ITA NO. 340/PN/2009 TANEJA AEROSPACE & AVIATION A.Y. 2005-06 FUND. THE DISALLOWANCE U/S 37(1)(VA) IS THEREFORE, JUSTIFIED. THE ORDER OF CIT(A) IS ACCORDINGLY UPHELD. 5. THE DISPUTES RAISED IN GROUNDS NO. 2 AND 3 ARE R EGARDING DISALLOWANCE OF RS. 4,40,947/- ON ACCOUNT OF LEAVE ENCASHMENT AND RS. 1,66,747/- ON ACCOUNT OF BONUS. THE A.O DISALLOWED THE CLAIM ON THE GROUND THAT THERE WAS N O EVIDENCE TO SHOW THAT THE PAYMENTS HAD BEEN MADE BE FORE DUE DATE OF FILING OF RETURN OF INCOME. IN APPEAL, THE ASSESSEE SUBMITTED THAT OUT OF LEAVE ENCASHMENT OF RS. 4,40,947/- A SUM OF RS. 2,56,998/- AND OUT OF BONUS PAYABLE OF RS. 1,66,747/- A SUM OF RS. 1,61,228/- HAD BEEN PAI D BEFORE DUE DATE OF FILING OF THE RETURN OF INCOME. THE CI T(A) HOWEVER OBSERVED THAT THERE WAS NO EVIDENCE TO SUPP ORT THIS CLAIM AND ACCORDINGLY, HE CONFIRMED THE DISALLOWANC E MADE BY THE A.O., AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. BEFORE US IN THE WRITTEN SUBMISSIONS, THE ASSESS EE HAS AGAIN REITERATED THAT A SUM OF RS. 2,56,998/- OUT OF LEAVE ENCASHMENT AND A SUM OF RS. 1,61,228/- OUT OF BONUS PAYABLE PAGE 4 OF 7 ITA NO. 340/PN/2009 TANEJA AEROSPACE & AVIATION A.Y. 2005-06 HAD BEEN PAID BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME. IN OUR VIEW, THIS ASPECT REQUIRES VERIFICA TION. THEREFORE, IN THE INTEREST OF JUSTICE, WE RESTORE T HIS ISSUE TO THE FILE OF THE A.O FOR PASSING A FRESH ORDER AFTER NECESSARY VERIFICATION AND AFTER ALLOWING AN OPPORTUNITY OF H EARING TO THE ASSESSEE. 7. THE FOURTH DISPUTE IS REGARDING THE DISALLOWANCE OF RS. 10,74,200/- BEING PRIOR PERIOD EXPENSES. THE A.O D ISALLOWED THESE EXPENSES ON THE GROUND THAT THE SAME RELATED TO THE EARLIER YEARS. IN APPEAL, THE ASSESSEE SUBMITTED T HAT OUT OF THE SAID SUM, A SUM OF RS. 8,44,200/- RELATED TO HA L (AIRCRAFT DIVISION) BEING BALANCE AMOUNT PAYABLE IN RESPECT O F INVOICES RAISED IN A.Y. 2004-05. THE PARTY HAD MADE SHORT P AYMENT AND THE BALANCE AMOUNT OF RS. 8,44,200/- WAS WRITTE N OFF AS A BAD DEBT. THE ASSESSEE GAVE FULL DETAILS OF THESE INVOICES AND PAYMENTS WHICH HAVE BEEN REPRODUCED IN PARA 5.2 OF THE ORDER OF THE CIT(A) AND THE ASSESSEE ACCORDINGLY CL AIMED THAT THE SAID AMOUNT WAS NOT A PRIOR PERIOD EXPENSE S BUT ACTUAL BAD DEBT. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT(A) OBSERVED THAT CLAIM OF BAD DEBT CO ULD BE PAGE 5 OF 7 ITA NO. 340/PN/2009 TANEJA AEROSPACE & AVIATION A.Y. 2005-06 ALLOWED ONLY AFTER VERIFICATION THAT THE AMOUNT HAD BEEN TAKEN INTO ACCOUNT IN THE COMPUTATION OF INCOME OF THE EARLIER YEAR AND HAD BEEN ACTUALLY WRITTEN OFF AS IRRECOVERABLE IN THE BOOKS. THE CIT(A) ACCORDINGLY RESTORED THIS ISSUE TO THE FILE OF THE A.O FOR NECESSARY EXA MINATION IN THE LIGHT OF PROVISIONS OF SECTION 36(1)(VII) READ WITH SECTION 36(2). AS REGARDS THE SUM OF RS. 2,30,000/- THE CI T(A) OBSERVED THAT THE ASSESSEE HAD MADE NO SUCH CLAIM . THEREFORE, CIT(A) CONFIRMED THIS ADDITION OF RS. 2, 30,000/-. AGGRIEVED BY THE SAID DECISION, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8. BEFORE US, IN THE WRITTEN SUBMISSIONS, THE ASSES SEE HAS REITERATED THE SUBMISSIONS MADE EARLIER THAT A SUM OF RS. 8,44,200/- WAS IN FACT BAD DEBT IN RESPECT OF SALES MADE EARLIER. AS REGARDS THE AMOUNT OF RS. 2,30,000/- I T HAS BEEN SUBMITTED THAT THE SAID AMOUNT WAS IN FACT IN THE N ATURE OF INTEREST EXPENSES ON BANK GUARANTEE WHICH WAS APPEA RING IN THE BOOKS OF ASSESSEE. THE LEARNED DR ON THE OTHER HAND, SUPPORTED THE ORDER OF THE CIT(A). PAGE 6 OF 7 ITA NO. 340/PN/2009 TANEJA AEROSPACE & AVIATION A.Y. 2005-06 9. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THE DISPUTE RAISED IS IN RELATION TO DI SALLOWANCE OF A SUM OF RS. 10,74,200/- SHOWN AS PRIOR PERIOD EXPE NSES. THE ASSESSEE BEFORE THE CIT(A) CLAIMED THAT OUT THE SAI D SUM AN AMOUNT OF RS. 8,44,200/- WAS IN FACT BAD DEBT CLAIM ED IN RELATION TO SALES MADE IN A.Y. 2004-05. THE CIT(A) HAS RESTORED THIS ISSUE TO THE FILE OF THE A.O FOR NECE SSARY EXAMINATION WHETHER THE CONDITIONS FOR ALLOWING OF BAD DEBT ARE FULFILLED IN THIS CASE. WE DO NOT FIND ANY INF IRMITY IN THE ORDER OF THE CIT(A) ON THIS POINT AND THE SAME IS U PHELD. 10. AS REGARDS THE SUM OF RS. 2,30,000/- THE ASSESS EE HAS SUBMITTED THAT IT WAS INTEREST EXPENSE IN CONNECTIO N WITH THE BANK GUARANTEE. HOWEVER, THE ASSESSEE HAS NOT PROD UCED ANY EVIDENCE TO SHOW THAT THIS WAS INTEREST EXPENSE S OF THE CURRENT YEAR. THE AMOUNT HAD BEEN SHOWN AS PRIOR P ERIOD EXPENSES. THEREFORE, THE SAME HAS BEEN RIGHTLY DISA LLOWED BY THE A.O. WE ACCORDINGLY, CONFIRM THE ORDER OF THE CIT(A) ON THIS POINT. PAGE 7 OF 7 ITA NO. 340/PN/2009 TANEJA AEROSPACE & AVIATION A.Y. 2005-06 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN ON THE 15 TH DAY OF OCTOBER 2010. SD/- SD/- ( I.C. SUDHIR) JUDICIAL MEMBER (RAJENDRA SINGH) ACCOUNTANT MEMBER PUNE DATED THE 15 TH OCTOBER 2010 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- III, PUNE 4. THE CIT- IV PUNE 5. THE D.R, A BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE