DCIT, UDAIPUR V. M/s. Sun Polytex Pvt. Ltd., UDAIPUR

ITA 368/JODH/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4797 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-12-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 29-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DAS
• Section: 143(3); 142(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, JODHPUR BEFORE SHRI B.P JAIN ACCOUNTANT MEMBER AND SHRI PARTHA SAR A THI CHAUDHURY JUDICIAL MEMBER ITA NO. 368 /JODH/201 5 ASSESSMENT YEAR:20 12 - 13 D CIT VS. M/S. SUN POLYTEX PVT. LTD. CIRCLE - 1 20 7 , ROAD NO. 11 UDAIPUR MADRI , INDUSTRIAL AREA UDAIPUR PAN NO. AAECS9347K (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. AMIT KOTHARI DEPARTMENT BY : SH. A.K. DAS DATE OF HEARING : 06/12/ 2016 DATE OF PRONOUNCEMENT : 07/12/2016 OR DER PER PARTHA SARATHI CHAUDHURY , JM THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) - 1 DT. 24/04/2015 ON THE FOLLOWING GROUNDS OF APPEAL: 1. DELETING THE DISALLOWANCE OF RS. 29,14,710/ - / - MADE U/S40A(2)(B) OF THE I.T AC T IGNORING THE FACT THAT THE ASSESSEE HAS COMPLETELY FAILED TO JUSTIFY AS TO WHY EXCESS PAYMENT WAS MADE FOR SALARY AND WAGES TO EMPLOYEES OF SISTER CONCERN. 2. DELETING THE DISALLOWANCE RS. 1 , 2 0,000/ - MADE U/S 40A(2)(B) OF THE I.T. ACT ON IGNORING THE FAC T THAT THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE AS TO HOW AND FOR WHAT PURPOSE THE GODOWN WAS USED AND. 2 2.1 IGNORING THE FACT THAT IN CASE OF ANY EXPENDITURE, ONUS IS ON ASSESSEE TO ESTABLISH ITS CLAIM. 3. DELETING THE DISALLOWANCE OF RS. 24,00,000/ - MADE U/S 40A(2)(B) OF THE I.T. ACT ON ACCOUNT OF PROVISION FOR ANNUAL BONUS TO DIRECTORS, OVER AND ABOVE REMUNERATION OF RS. 48,00,000/ - WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE FAILED TO SUSTAINED THE ELIGIBILITY OF DIRECTORS FOR RECEIVING SUCH HU GE AMOUNTS OF BONUS. THOUGH THE REVENUE HAS TAKEN UP MULTIPLE GROUND S OF APPEAL THE ISSUE REVOLVES AROUND THE ADDITION MADE UNDER SECTION 40A(2)(B) OF THE ACT. 2. THE BRIEF FACTS APPEARING IN THIS CASE ARE THAT THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF PP TAPE/FABRIC/SACKS. THE MAIN PRODUCT OF THE COMPANY IS PP FABRIC/SACK USED AS PACKING MATERIAL BY CEMENT AND OTHER INDUSTRIES. THE ASSESSEE E - FILED ITS RETURN ON 25/09/2012 VIDE ACKNOWLEDGEMENT NO. 494169911250912 DECL ARING TOTAL INCOME OF RS. 2,16,29,895/ - . THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY NOTICE UNDER SECTION 143(2) DATED 10/09/2013 WAS ISSUED AND DULY SERVED UPON THE ASSESSEE. THEREAFTER NOTICE UNDER SECTION 142(1) OF THE ACT DATED 03/01/2014 WAS IS SUED DUE TO CHANGE OF INCUMBENT AND DULY SERVED ON THE ASSESSEE. 3. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT WITH TOTAL ASSESSED INCOME BEING RS. 2,72,20,930/ - / - AS COMPARE D TO THE RETURNED INCOME OF RS. 2,16,29,895/ - . 4. THAT WITH RE GARD TO THE FIRST GROUND OF APPEAL IT IS HELD BY THE LD. CIT(A) - 1 THAT IN THE ASSESSEES OWN CASE FOR A.Y. 2009 - 10, 2010 - 11 & 2011 - 12 IN ALL THESE YEARS AND FOR THE DETAILED REASONS GIVEN IN THE RESPECTIVE APPELLATE ORDER FOR 3 THE MENTIONED ASSESSMENT YEARS, THE DISALLOWANCE ON ACCOUNT OF ADDITIONAL AMOUNT OF WAGES AND SALARY WERE DELETED VIDE APPELLATE ORDER NO. 302/IT/UDR/2011 - 12 ORDER DT. 13/12/2012 FOR A.Y. 2009 - 10, A.Y 2010 - 11 VIDE APPEAL NO. 55/IT/UDR/2013 - 14 DT. 08/05/2014 AND A.Y. 2011 - 12 VIDE APPEAL NO. 340/IT/UDR/2013 - 14 DT. 03/07/2014. THAT, FURTHER THIS ISSUE INVOLVED DURING THE YEAR UNDER CONSIDERATION IS EXACTLY THE SAME DISALLOWANCE MADE OF RS. 29,14,710/ - WAS THEREFORE DELETED BY THE LD. CIT(A) AND PARTICULARLY IN VIEW OF THE FACT THAT THE AO H AS NOT BROUGHT ANY MATERIAL / EVIDENCE ON RECORD TO JUSTIFY SUCH DISALLOWANCE. 5. THAT, WITH REGARD TO THE SECOND GROUND OF APPEAL THE LD.CIT(A) - 1 HELD IN HIS ORDER THAT FOR THE ASSESSMENT YEARS 2009 - 10, 2010 - 11 AND 2011 - 12 IN ASSESSEES OWN CASE SIMILAR D ISALLOWANCE HAVE BEEN DELETED VIDE APPELLATE ORDER NO. 302/IT/UDR/2011 - 12 ORDER DT. 13/12/2012 FOR A.Y. 2009 - 10, A.Y 2010 - 11 VIDE APPEAL NO. 55/IT/UDR/2013 - 14 DT. 08/05/2014 AND A.Y. 2011 - 12 VIDE APPEAL NO. 340/IT/UDR/2013 - 14 DT. 03/07/2014. 6. THAT, MOREO VER THE LD. CIT(A) OBSERVED IN HIS ORDER THAT THE APPEAL PREFERRED BY THE DEPARTMENT AGAINST DELETION FOR THE ASSESSMENT YEAR WAS DISMISSED BY HONBLE ITAT VIDE ITS ORDER IN ITA NO. 150/JODHPUR/2013 FOR THE A.Y. 2009 - 10 DT. 02/04/2014 AND CONSIDERING THE I SSUE INVOLVED IN THE YEAR UNDER CONSIDERATION IS IDENTICAL THE LD. CIT(A) - 1 HELD THAT THE DISALLOWANCE MADE OF RS. 1,20,000/ - ON ACCOUNT OF RENT PAID TO M/S. MILAP INDUSTRIES DESERVES TO BE DELETED AND WAS ORDERED ACCORDINGLY. 4 7 . THAT, WITH REGARD TO THE NEXT GROUND OF APPEAL THE LD. CIT(A) - 1 HELD IN HIS ORDER THAT ON SIMILAR GROUND FOR THE A.Y. 2011 - 12 IN ASSESSEES OWN CASE THE RELIEF WAS GRANTED IN APPEAL NO. 340/IT/UDR/2013 - 14 IN WHICH IT WAS HELD THAT THE BONUS IS ALLOWABLE TO THE DIRECTORS IS NOT COVE RED BY THE PROVISIONS OF 40A(2)(B) OF THE ACT. 8 . THAT SINCE THE ISSUE FOR CONSIDERATION IS IDENTICAL AND ADMITTEDLY NO NEW FACTS WERE BROUGHT ON RECORD TO ESTABLISH SUCH BONUS IS COVERED BY THE PROVISION OF SECTION 40A(2)(B) OF THE ACT AND THEREFORE NOT ALLOWABLE. THE LD.CIT(A) - 1 HELD THAT THERE IS NO NEED TO DEVIATE FROM THE DECISIONS GIVEN IN ASSESSMENT YEAR 2011 - 12 IN ASSESSEES OWN CASE AND THEREFORE THE DISALLOWANCE OF RS. 24,00,000/ - WAS DELETED. 9 . THAT, ALL THE GROUNDS OF APPEAL BEFORE US ARE INT ERRELATED AND THEREFORE DEALT TOGETHER FOR THE SAKE OF CONVENIENCE. 10 . WE HAVE PERUSED THE RECORDS OF THE CASE, FACTS AND CIRCUMSTANCES OF THE CASE AND WE FIND THAT ALL THE GROUNDS OF APPEAL FOR THE REASONS STATED HEREIN ABOVE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND THE SAME IS IN RECORD FINDS PLACE IN THE ORDER OF THE LD. CIT(A) - 1. 1 1 . IN THIS CASE WE FOLLOW OUR EARLIER DECISION GIVEN IN FAVOUR OF THE ASSESSEE IN A.Y. 2011 - 12 IN ITA NO. 505/JODHPUR/ 2014 . FOR G ROUND NO. 1 WE REFER PARA NO. 8 & 9, FO R GROUND NO. 2 WE REFER PARA NO. 13 & 14, AND FOR GROUND NO. 3 WE REFER PARA NO. 21 & 22 OF THE ABOVE MENTIONED ORDER IN ITA NO. 505/JODHPUR/2014 DT. 29/11/20 16 . 5 1 2 . WE ARRIVE AT OUR CONSIDERED VIEW THAT THIS APPEAL BY THE REVENUE IN ALL THESE GROUNDS O F APPEAL PREFERRED BEFORE US DOES NOT HAVE ANY LEGS TO STAND AND ACCORDINGLY WE UPHOLD THE ORDER OF THE LD. CIT(A) - 1 AND DISMISS THE APPEAL OF THE REVENUE . 1 3 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT . S D/ - SD/ - (B.P. JAIN) ( PARTHA SAR A THI CHAUDHURY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07/12/2016 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTR AR