M/s. Shinghal Enterprises, Uttrakhand V. ITO, Uttrakhand

ITA 4300/DEL/2011

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4863 (ITAT-DEHRADUN)
• Duration Of Justice: 10 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 27-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N C UPADHYAY
• Assessee Lawyers: V RAJKUMR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH, DEHRADUN BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 4299/DEL/2011 : ASSTT. YEAR : 2004-05 ITA NO. 4300/DEL/2011 : ASSTT. YEAR : 2008-09 M/S SHINGHAL ENTERPRISES, KASHIPUR ROAD, RUDRAPUR, U.S. NAGAR, UTTARANCHAL-263153 VS INCOME TAX OFFICER, RUDRAPUR, DISTT. UDHAM SINGH NAGAR (APPELLANT) (RESPONDENT) PAN NO. A AEFS7127C ASSESSEE BY : SH. K. SAMPATH, ADV. & SH. V. RAJKUMR, ADV. REVENUE BY : SH. N. C. UPADHYAY, SR. DR DATE OF HEAR ING: 14 . 09 .20 21 DATE OF PRONOUNCEMENT: 29 .0 9 .20 21 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSE E AGAINST THE ORDERS OF THE LD. CIT(A)-II, DEHRADUN D ATED 18.07.2011. 2. SINCE, THE ISSUES INVOLVED IN BOTH THE APPEALS A RE IDENTICAL, THEY WERE HEARD TOGETHER. DEPRECIATION ON DG SETS AND DISALLOWANCE OF DIESEL EXPENSES: 3. VIDE ORDER DATED 14.09.2019 IN ITA NOS. 223 & 344/DEL/2009 FOR THE A.Y. 2004-05, THE TRIBUNAL VID E PARA 5 HAS DIRECTED THE AO TO MAKE INQUIRY BY THE WAY OF SPOT VISIT FOR VERIFICATION OF THE PRESENCE OF DG SETS WHICH COULD ESTABLISHED ITA NOS. 4299 & 4300/DEL/2011 SINGHAL ENTERPRISES 2 THE FACTS PURCHASES. ON GOING THROUGH THE ASSESSMEN T ORDER DATED 28.12.2010 AND ORDER OF THE LD. CIT (A) ORDER DATED 18.07.2011, WE FIND THAT THE SAID DIRECTIONS OF THE TRIBUNAL HAVE NOT BEEN ADHERED TO AND THE ASSESSING OFFICER HAS REPEATED THE SAME LINE OF ENQUIRY AND GAVE A FINDIN G THAT THE GEN SETS WERE BOGUS. 4. WHILE THE PREMISES OF THE ASSESSEE AS WELL AS TH E ASSESSING OFFICER ARE SITUATED AT RUDRAPUR, THE NON -COMPLIANCE TO THE DIRECTIONS GIVEN BY THE TRIBUNAL FOR SPOT VE RIFICATION SO AS TO ARRIVE AT THE REAL FACT OF THE PRESENCE OF THE G ENSET HAS NOT BEEN COMPLIED. NOW THAT PERIOD OF 17 YEARS HAS ELAP SED, THE VERIFICATION OF THE FACT WOULD BE A CASTLE IN THE SKY. HENCE, WE FEEL THAT THE REVENUE HAS MISSED THE BUS IN OPPORTU NE TIME. NOTHING CAN BE DONE AT THIS JUNCTURE. THE APPEAL OF THE ASSESSEE ON THIS GROUND IS ALLOWED. THE SAME GOES T O THE CLAIM OF DIESEL EXPENSES TOO. WITH REGARD TO THE ADDITION AL DEPRECIATION, THE AO IS HEREBY DIRECTED TO APPLY TH E PROVISIONS OF THE INCOME TAX ACT AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. SALE OF RICE HUSK: 5. THE ASSESSING OFFICER HAS MADE ADDITION OF RS.4, 50,000/- ON ACCOUNT OF THE HUSK PRODUCED OUT OF THE HULLING OF PADDY. THE AMOUNT HAS BEEN CALCULATED @ RS.60/- PER QUINTA L OF THE HUSK, THE RECOVERY BEING 26% OF THE PADDY OF 1,17,7 50 QUINTALS. THE LD. CIT (A) REDUCED THE AMOUNT FROM R S.4,50,000 TO RS.2,25,000/-. THE RECOVERY RATE OF HUSK IS IN G ENERAL 10- 12% OF THE PADDY HULLED AND IN THE INSTANT CASE, TH E ASSESSEE HAS EXPLAINED THAT THE HUSK WAS USED AS A FUEL FOR BOILING TANKS ITA NOS. 4299 & 4300/DEL/2011 SINGHAL ENTERPRISES 3 AND DRIERS, THE FACTS OF WHICH COULD NOT BE DISPUTE D BY THE REVENUE BY BRINGING ANY COGENT MATERIAL ON RECORD T O PROVE THAT THE HUSK IS NOT USED FOR THE FUEL PURPOSE. DISALLOWANCE OF INTEREST: 6. THE AO DISALLOWED AN AMOUNT OF RS.3,22,900/- PAI D TO BANK HOLDING THAT THE ASSESSEE HAS NOT RECEIVED ANY INTEREST ON ADVANCES GIVEN TO THE SISTER CONCERNS. FROM THE REC ORDS, WE FIND THAT THE ASSESSEE HAS OWN FUNDS IN THE FORM OF CAPITAL AND ADVANCES WHICH IS MUCH MORE THAN THE AMOUNT OF ADVA NCES GIVEN OF RS.25.9 LACS. SINCE, THE ASSESSEE HAS GOT SUFFICIENT OWN FUNDS TO LEND THE AMOUNT TO THE RELATED PARTIES, NO DISALLOWANCES U/S 36(1)(III) IS CALLED FOR IN THIS CASE. FREIGHT EXPENSES: 7. THE AO DISALLOWED 5% OF THE FREIGHT INWARD EXPEN SES ON THE TOTAL AMOUNT OF RS.45.31 LACS CLAIMED BY THE AS SESSEE, OUT OF WHICH THE LD. CIT (A) HAS GIVEN RELIEF OF RS.1,2 6,500/- AND CONFIRMED AD-HOC AMOUNT OF RS.1,00,000/-. THE ASSES SEE SUBMITTED THAT ALL THE VOUCHERS HAVE BEEN SUBMITTED BEFORE THE ASSESSING OFFICER AND SOME OF WHICH ARE SELF-MADE O WING TO PRETTY EXPENSES PAID TO THE TRANSPORTER. SINCE, IT IS A BUSINESS CONTINGENCY AND THE DISALLOWANCE HAS BEEN MADE ON A D-HOC BASIS. WE HEREBY ALLOW THE EXPENSES DISALLOWED BY T HE REVENUE AUTHORITIES ON AD-HOC BASIS. THE SAME RATIO IS APP LICABLE WITH REGARD TO THE DISCOUNT PAID OF RS.25,000/- IN ITA N O. 4300/DEL/2011 FOR THE A.Y. 2008-09. THE APPEAL OF T HE ASSESSEE IS ALLOWED ON ALL THE GROUNDS RAISED. ITA NOS. 4299 & 4300/DEL/2011 SINGHAL ENTERPRISES 4 8. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/09/2021. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 29/09/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR