The ACIT, Circle-2(1)(1), Ahmedabad V. Fairdeal Suppliers Limited, Ahmedabad

ITA 420/AHD/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8187 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-02-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 24-05-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 32; 27; 144; 143(3); 92; 201; 101; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./I. T. A. No . 420/Ahd/20 23 ( नधा रण वष / As ses s men t Years : 201 8-19) T h e A C I T C ir cl e - 2 ( 1 ) ( 1 ) , Ah me da b ad बनाम/ Vs . Fai rd ea l S u p pl ier s L i m it e d 4 t h F lo o r , Sha li n B u ild in g, N e a r N e h r u B r id ge , A s hr a m R oa d , A h m ed a ba d - 3 80 0 0 9 थायी लेखा सं./जीआइआर सं./P A N / G I R N o . : A A A C F2 8 7 8 C (Appellant) . . (Respondent) अपीलाथ ओर से /Appellant by : Shri Alpesh Parmar, Sr. DR यथ क ओर से/Respondent by : Shri P. F. Jain, A.R. D a t e o f H ea ri ng 13/02/2024 D a t e o f P r o n o u nc e me n t 22/03/2024 O R D E R PER Ms. MADHUMITA ROY - JM: Th e instan t app eal filed at the in stance of the Revenue is directed against the order dated 29. 03. 2023 passed by the National Faceles s App eal Centre (NF AC), Delhi, arising out of the order dated 31. 05. 2021 passed by the NF AC, Delhi un der Sectio n 143(3) r. w. s. 144 B of the Inco me Tax Act , 1 961 (hereinafter referr ed as to ‘th e Act’) for Ass es sment Year 20 18-19. ITA No. 420/Ahd/2023 (ACIT vs. Fairdeal Suppliers Limited) A.Y.– 2018-19 - 2 – 2. Th e deletion o f addition made on accoun t of trans action s with struck off co mpany of Rs. 1, 45,4 3, 101/- is the subject matter before us. 3. We h ave h eard the rival sub missions made by the res pective parties and we h ave also perused the relevant materials available on reco rd. 4. During the course of assessment proceeding, it was fo und th at the assessee repaid the above amount to one M/s. Son ata Solutions Ltd. , a co mpan y whose reg istration was cancelled by MCA. The maxi mu m amount outstanding d uring the year was Rs. 2, 25, 4 3, 101 /-, d etails wh ereof was directed to be furnish ed. Th e ass es see on 1 8. 01.20 21 fu rnis hed the led ger acco unt o f the transactions with th e said company fro m 01. 0 4. 2014 to 31. 03.2 018. It was further men tio ned that no p ay ment was made during the year an d th e amo unt o f Rs. 1, 4 5, 43, 101/- is bo oked as in come during the year as amoun t written b ack . Further that, no transaction took place with that particular company since 2 013. However, in the a bsence o f any ev idence to that effect, same wa s disallo wed and added to the total in come o f the assessee which was, in turn, deleted b y the Ld. CIT(A). Hen ce, the instant app eal before us. 5. Befo re th e First App ellate Authority, the asses see sub mitted as follows: ITA No. 420/Ahd/2023 (ACIT vs. Fairdeal Suppliers Limited) A.Y.– 2018-19 - 3 – “ 3 . WR O N G F U L A D D I T I O N O F R S . 1 4 5 4 3 1 0 1 P E R T A I N I N G T O T R A N S A C T IO N W I T H S T R U C K - O F F C O M P A N Y , T H O U G H T H E S A ME IS A L R E A D Y A D D E D B Y T H E A P P E L L A N T I N I T S A C C O U N T S DU R I N G F . Y . 2 0 1 7 - 1 8 , R E S U L T I N G I N T O D U P L I C A T I ON O F IN C O M E T A X D E P A R T (a ) T h a t t h e L d . A Q h a s er r ed i n m a ki n g t h e a d d i t i on o f R s . 1 4 5 4 3 1 0 1 p e rt a i n i n g t o a m o u n t w r i t t e n b a c k a b o u t t r a n s a c t i o n w i t h s t r u c k o f f co m p a n y . T h i s a m o u n t w a s b o o k e d i n t h e a c c o u n t s a s i n c o m e o n c r e d i t si d e a n d a c c o u n t e d a s L o a n s A d va n c e s W r i t t e n O f f a nd s h o w i n g co rr e s p o n d i n g d e b i t t o r e s p e c t i v e c r e d i t o r s a c c o u n t. (b ) T h a t a p p e l l a n t h a d a l r ea d y s h o w n i n co m e i n b o o ks o f a c c o u n t , h o w e v e r t h i s a d d i t i o n i s n u l l i f e d d u e t o d e d u ct i o n o f s a m e i n S T I o n a c co u n t o f t h i s i n co m e i n a d v e r t e n t l y m e r g i n g i n t o pr o v i s i o n w r i t t e n b a c k . H o w e v e r , d u e t o a v a i l a b i l i t y o f u n a b so r b e d l os s e s , t h e r e w i l l b e n o i m p a ct o n i n c o m e ” 6. Apart fro m that, the ass es see sub mitted fo llo wing before the Ld . CIT(A): “ 1 . D e t a i l s o f t r a n s a c t i o n s d o n e w i t h S o n a t a S o l u t io n s L t d , w h o s e n a m e h a s b e e n s t r u c k- o f f b y M C A : We a r e su b m i t t i n g h e r e u n d e r t h e e xt r a ct o f o u r r e p ly d a t e d 1 8 . 0 1 . 2 0 2 1 p o i n t n o . 1 6 w h i c h r e a d a s u n d e r : “ .... C o p i e s o f l e g e r a c co u n t s o f t r a n s a ct i o n w i t h S o na t a S o l u t i o n s L t d f r o m 0 1 . 0 4 . 2 0 1 4 t o 3 1 . 0 3 . 2 0 1 8 a r e e n c l o s e d h e r ew i t h a s A n n e x u r e - P . N o R e p a ym e n t i s m a d e d u r i n g t h e y e a r , ho w e v er , R s . 1 , 4 5 , 4 3 , 1 0 1 / - i s b o o k ed a s i n c o m e d u r i n g t h e y e a r a s a m o u n t w ri t t en b a c k. F u rt h e r t h e r e i s n o T r a n s a ct i o n m a d e w i t h t h i s co m p a n y s i n c e 2 0 1 3 . F u rt h e r, w e w e r e n o t i n f o r m ed by t h e co m p a n y a b o u t r e g i s t r a t i o n b ei n g c a n c el l e d o f S o n a ta S o l u t i o n s L t d a n d w e w e r e t o t a l l y u n a w a r e a b o u t t h i s f a c t . . . " We a r e a g a i n a t t a c h i n g h e r e w i t h o f l e g e r a c co u n t s of t r a n sa c t i o n w i t h S o n a t a S o l u t i o n s L t d f r o m 0 1 . 0 4 . 2 0 1 4 t o 3 1 . 0 3 . 2 0 1 8 a s E x h i b i t - l . F r o m t h i s l e d g e r c o p y, i t i s c l e a r t h a t a m o u n t o f R s. 1 ,4 5 , 4 3 , 1 0 1 / - i s a l r e a d y b o o k ed a s i n c o m e . T h e co p y o f l e d g e r a c c o u n t s h o w i ng t h e a b o v e r e f e r r e d a m o u n t w h i ch i s w ri t t en - b a c k a s i n co m e a s E xh i b i t - I I . T h e l ed g e r a c c o u n t o f S o n a t a S o l u t i o n s L t d s h o w s t h e c or r e s p o n d i n g l e d g e r a c co u n t o n t h e d eb i t s i d e o f t h e p a r t y a n d c o r r es p on d i n g l e d g e r a c co u n t ' s n a m e ve r y c l e a r l y . I n T a l l y s o f t w a r e , t h e c o r r e s p o n d i n g ITA No. 420/Ahd/2023 (ACIT vs. Fairdeal Suppliers Limited) A.Y.– 2018-19 - 4 – a c co u n t w h i c h h i s cr e d i t e d i s a l w a y s s h o w n . N o n e t h el e s s f o r y o u r ki n d co n s i d e r a t i o n , w e r eq u e s t y o u t o r e f e r E xh i b i t - I l wh i c h r e l a t e d t o i n c o m e a c c o u n t a n d i t i s i n c l u d ed i n o t h e r i n c o m e o f P &L A / c . F u rt h e r , n o t e t h a t t h e r e i s n o tr a n s a ct i o n c a r r i e d o u t b y t h e c o m p a n y d u r i n g t h e y ea r u n d e r r e v i e w . We f u r t h e r s u b m i t t h a t t h e i n co m e w h i c h i s a l r e a d y s u o - m o t o s h o w n b y t h e a s s e s e e , t h e sa m e c a n n o t b e d u p l i c a t e d b y m a k i n g f u rt h e r a d d i t i on o f s i m i l a r a m o u n t o f s i m i l a r p a rt y o f s i m i l a r f a ct s . We h u m b l y r e q u es t t h a t o n t h e b a s i s o f a b o v e r e f e r re d f a ct s , f u rt h e r a d d i t i o n s h o u l d n o t b e m a d e o f R s . 1 , 4 5 , 4 3 , 1 0 1 / - . ” 7. Th e Ld. CIT (A) considering the entire aspect of the matter, observed as follows: “ 5 . 7 i n t h i s r e g a r d t h e a p p el l a n t s t a t e d t h a t i t h as a l r e a d y o f f er e d t h e a m o u n t t o t a x u n d e r h e a d l i a b i l i t y / p r o vi s i o n n o l o ng e r r eq u i r e d r et u r n b a c k a n d i t s u b m i t t ed l e d g e r e xt r a ct o f l o a n s/ a d v a nc e s w r i t t e n o f f a l o n g w i t h e xt r a ct o f o t h er i n c o m e a p p ea ri n g i n t h e p r o f it a n d l o s s a c c o u n t . On p e r u s a l o f s a m e i t i s o b s e r v e d t h a t t h e u n d e r l i ne d l o a n a m o u n t i s f o r m i n g p a r t o f p r o f i t a n d l o s s a cc o u n t t h e r ef o r e th e a d d i t i o n m a d e b y t h e l e a r n e d A O f o r s u m o f R s . 1 , 4 5 , 4 3 , 1 0 1 / - i s d el et e d . ” 8. Th e sp ecific lacuna has not been foun d to be po inted ou t q ua th e details of docu ments by the Ld. CIT(A) as it appears fro m the said observatio n. Hence, the order o f deletio n is fo und to be cryptic and , thu s, quashed. The o rd er of add itio ns passed by the Ld . AO is, thus, up held. 9. Th e d eletion of addition of Rs. 3, 29, 19, 270/- on acco unt o f repairs to plant & machinery is the subject matter b efore u s. A sho w cau se notice dated 2 4.04.2021 was i s sued to the asses see with p ro posal to cap italize repairs an d main ten ance o f Rs. 3, 29, 1 9, 270 /-. A fter allo wing depreciatio n o f Rs. 49 ,37,890/-, ITA No. 420/Ahd/2023 (ACIT vs. Fairdeal Suppliers Limited) A.Y.– 2018-19 - 5 – th e b alance of R s. 2, 7 9, 81, 39 0/- was proposed to b e disallowed. Th e ex penses incu rred toward s repairs an d main tenance, th erefore, was furnish ed by the assessee in the manner as follows: 10. However, the verificatio n of th e ledger extracts/bills/in voices sub mitted by the assessee creat ed dou bts in th e mind of th e Ld. AO as all the b ills hav e not been furnished fo r verification b y the asses see. The differ en ce of clai m i n the ledger in compare to the bills prod uced against the same wer e v erified by th e Ld. AO and with the fo llo wing observatio ns 10% of rep airs and maintenance to the tune of Rs. 32, 91, 927/- was disallo wed: ITA No. 420/Ahd/2023 (ACIT vs. Fairdeal Suppliers Limited) A.Y.– 2018-19 - 6 – “ 8 . O n v e r i f i ca t i o n o f t h e l e d g er e xt r a ct s a n d b i l ls / i n v o i c e s s u b m i t t e d b y t h e a ss e s se e u n d e r E x h i b i t s I I I t o V I I , i t i s s ee n t h a t t h e a s s e s s e e h a d n o t f u r n i s h e d a l l t h e b i l l s f o r v er i f i c a t i o n . T h er e i s d i f f e r e n c e i n w h a t i s cl a i m e d i n t h e l e d g e r w h e n c o m p a r e d t o t h e b i l l s p ro d u c ed a g a i n s t e a c h l ed g e r e x t r a c t . b . O n r a n d o m v e r i f i c a t i o n o f t h e l e d g e r e xt ra ct s s ub m i t t e d b y t h e a s s e s s ee , t h e a s s e s e e h a s c l a i m e d s a m e a m o u n t t w i c e ( s a m e b i l l t w i c e su b m i t t e d ). F e w i n s t a n c e s a r e su b m i t t e d b e l o w : i ) E x h i b i t V - t w o b i l l s o f s a m e i n vo i c e n o . 0 0 7 / 1 7 - 1 8 f o r R s . 1 1 , 1 3 0 / - i i )E xh i b i t V - t w o b i l l s o s a m e i n vo i c e n o . 0 0 1 3 3 f o r R s. 8 , 3 2 1 / c. S i m i l a r l y t h e a s s e s s ee h a s c l a i m e d a s u m o f R s . 12 . 0 0 . 0 0 0 / - i n t h e l ed g e r - r e p a i r s & m a i n t e n a n c e t o W i n d f a r m (E x h i b i t V- E ) t o w a r d s p u r c h a s e o f s p a r e p a r t s f r o m S u r a b h i Wi n d f a r m s T e c hn o l o g i e s B u t c o p y o f t h e b i l l i s n o t p r o d u c e d d . I t i s s e en i n a n o t h e r l e d g e r e x t r a c t t h a t i n r e sp e c t o f M / s . S u r a t h i Wi n d f l a r m s T e c h n o l o g i e s P vt . L t d , t h e a s s es s e e h a d d eb i t e d a s u m o f R s . 1 1 5 6 1 9 - o n 0 6 . 0 5 . 2 0 1 7 w i t h B i l l N o . 5 - 1 7 / 1 8 - 0 2 5 w it h V c h N o . 1 7 / 1 8 - 0 1 6 3 . H o w e v er , i n r es p e c t o f t w o d e b i t s o f s a m e a m ou n t e a c h o f R s . 1 1 5 6 1 9 / - (t o t a l l i n g t o R s . 2 3 1 2 3 8 / - ) d a t e d 3 1 . 0 5 .2 0 1 7 w i t h B i l l N o s . S - 1 7 / 1 8 - 0 7 7 (V c h N o . 1 7 / 1 8 - 0 3 2 1 a n d 0 3 2 2 ), t h e a s s es s e e co u l d n o t f u r n i s h t h e b i l l s f o r v e ri f i ca t i o n . F u r t h e r i t c a n b e s e en t h a t t h e a s s e s s ee h a d m e n t i o n e d t h e B i l l N o s . w i t h " ? ? " w h i ch s h o w s t h a t t h e a s s e s s ee h a d c l a i m e d t h i s a m o u n t o f R s . 2 3 1 2 3 8 / - w i th o u t p r o p e r b i l l s F o r t h e r e a s o n s ci t e d a b o v e , 1 0 % o f r e p a i r s & m a i n ten a n ce i n R s . 3 2 , 9 1 , 9 2 7 / - i s d i s a l l o w e d a n d a d d ed t o t h e t o t a l i n co m e . D i sa l l o w a n c e : R s . 3 2 , 9 1 , 9 2 7 / - “ 11. As th e Ld. AO o bjected the above disputed amount wh ich is appearing in multiple v ouch ers as i f the same was recorded twice in stead of one an d disallo wed 10% of th e total repairs and maintenan ce charges. Th e Ld. CIT(A) observed the following while d eleting addition: “ 5 . 9 T h e l e a r n ed A O c a r r i e d o u t a d d i t i o n o f R s . 3 2 , 91 , 9 2 7 / - o n a c c o u n t o f 1 0 % o f m a c h i n e r y r ep a i r e x p e n s e s . T h e l e a rn e d A O c o n t e s t ed t h a t t h e ITA No. 420/Ahd/2023 (ACIT vs. Fairdeal Suppliers Limited) A.Y.– 2018-19 - 7 – a p p e l l a n t h a s s u b mi t t ed l e d g e r e xt r a ct o f r ep a i r a nd m a i n t e n a n c e ch a r g e s a l o n g w i t h s u p p o r t i n g i n vo i c e s . T h e l e a r n ed A O c o n t es t e d t h a t t h e r e a r e f e w a m o u n t s w h i ch a r e s a m e b u t a p p ea r i n g i n m u l t i p l e vo u c h e r s t h e r e f o r e h e s u s p e c t e d t h a t t h e s e a m o u n t s a r e re c o r d e r t w i c e i n s t e a d o f o n c e a n d h e d i s a l l o w e d 1 0 % o f t o t a l r e p ai r s a n d m a i n t en a n c e ch a r g e s . ” 12. Th e narration is not fou nd to b e su fficient enou gh to ju stify th e deletion of ad dition made by th e Ld. CIT(A). Hence, the same is quash ed. The order passed b y the Ld. AO is, thus, uph eld. 13. In th e result, app eal preferred by the Revenue is allowed . This Order pronounced on 22/03/2024 Sd/- Sd/- (WASEEM AHMED) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 22/03/2024 S. K. SINHA True Copy आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. "वभागीय &त&न ध, आयकर अपील)य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड/ फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad