BADHEKA PAPER MFG. CO. PVT.LTD, MUMBAI V. ITO 2(1)(1), MUMBAI

ITA 46/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3204 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: Not Allotted
• Next Hearing Date: 29-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2016
• Court: TRIBUNAL
• Department Lawyers: MALLIKARJUN UTTURA
• Assessee Lawyers: DR K SHIVARAM
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANJAY GARG , JM ./ ITA NO. 46 / MUM/20 1 6 ( / ASSESSMENT YEAR : 20 06 - 20 07 ) M/S BADHE KA PAPER MFG.CO.PVT. LTD., 13, RUSTOM SIDHWA MARG, FAIRY MANOR, FORT, MUMBAI - 400001 VS. ITO - 2(1)(1), MUMBAI ./ ./ PAN/GIR NO. : A A ACB 6321 Q ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : DR . K.SHIVARAM /REVENUE BY : SHRI MALLIKARJUN UTTURA / DATE OF HEARING : 0 7 /0 7 /2016 / DATE OF PRONOUNCEMENT 24/08 /201 6 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), MUMBAI, FOR THE ASSESSMENT YEAR S 20 06 - 2007 , IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S.147 OF I.T.ACT . 2. IN GROUND NO.1, THE ASSESSEE IS AGGRIEVED FOR ADDITION ON ACCOUNT OF EXPENDITURE WHICH WAS NOT CLAIMED AS DE DUCTION. 3. LD. AR CONTENDED THAT ONLY IN THE P&L ACCOUNT PREPARED AS PER COMPANIES ACT, EXPENDITURE OF RS.19,78,593/ - TOWARDS LABOUR DUES WERE DEBITED, HOWEVER, THE SAME HAS NOT BEEN CLAIMED AS DEDUCTION UNDER THE INCOME TAX ACT. SIMILARLY WITH RESPECT TO THE EXPENDITURE ON EXCISE DUTY, ITA NO. 46 /1 6 2 LEGAL FEE, MISCELLANEOUS EXPENSES AND DEPRECIATION, IT WAS CONTENDED BY LD. AR THAT SAME HAS NOT BEEN CLAIMED IN THE COMPUTATION OF INCOME. 4. FROM THE RECORD WE FOUND THAT AS PER COMPUTATION OF INCOME PLACED AT PAGE 68, E VEN THOUGH ASSESSEE HAD ADDED BACK ITS CLAIM O F DEPRECIATION, LABOUR CHARGES ETC AND THEREAFTER ARRIVED AT A LOSS OF RS.5,59,202/ - . HOWEVER, WHILE FRAMING THE ASSESSMENT ORDER AT PAGE 7, THE AO HAS TAKEN NET LOSS AS PER P&L ACCOUNT AMOUNTING TO RS.13,90,84 1/ - IN PLACE OF NET LOSS OF RS.5,59,202/ - AS WORKED OUT BY THE ASSESSEE IN ITS COMPUTATION OF INCOME. HOWEVER, FACTS ARE NOT CLEAR , T HE AO HAS NOT GIVEN PROPER REASONING FOR ADDING BACK THE EXPENSES ACTUALLY INCURRED IN THE REGULAR COURSE OF BUSINESS. NO P ROPER JUSTIFICATION HAS BEEN GIVEN BY ASSESSEE TO SUPPORT THAT THESE EXPENSES WERE CRYSTALLISED DURING THE YEAR EVEN THOUGH PERTAINING THE EARLIER YEARS, THEREFORE, IN THE INTEREST OF JUSTICE, WE RESTORE THIS MATTER BACK TO THE FILE OF AO FOR DECIDING AFRE SH THE ALLOWABILITY OF EXPENSES OF RS.29,43,388/ - CLAIMED BY ASSESSEE IN GROUND NO.1. NEEDLESS TO SAY THAT ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY FOR THE SAME. 5. NEXT GRIEVANCE OF THE ASSESSEE RELATES TO CIT(A)S FAILURE TO DELETE THE DOUBLE ADDITION OF CAPITAL GAINS ON TRANSFER OF ASSETS . IT WAS CONTENDED BY LD. AR THAT AO AFTER TAKING THE NET LOSS AS PER PROFIT AND LOSS ACCOUNT PREPARED BY ASSESSEE AS PER COMPANIES ACT, WHICH INCLUDES BOOK PROFIT OF RS.21,01,862/ - ON SALE OF ASSETS HAD WORKED OUT TAXA BLE INCOME . AS PER LD. AR ASSESSEE HAD ALREADY CREDITED THE SAME IN ITA NO. 46 /1 6 3 ITS P&L ACCOUNT, THEREFORE, AGAIN ADDING THE SAME IN THE I NCOME OF THE ASSESSEE RESULTED INTO DOUBLE ADDITION. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT IN THE COMPUTATION O F INCOME ASSESSEE HAS ALREADY OFFERED SALE OF ASSETS AMOUNTING TO RS.21,01,862/ - AND THEREAFTER ARRIVED AT A NET LOSS OF RS.30,90,841/ - . HOWEVER, WHILE FRAMING ASSESSMENT AT PAGE 7, OF HIS ORDER HAS AGAIN ADDED BACK RS.21,01,862/ - IN THE INCOME OF THE ASS ESSEE, WHICH AMOUNTS TO DOUBLE ADDITION OF WHAT ASSESSEE HAD ALREADY OFFERED IN ITS PROFIT AND LOSS ACCOUNT AS WELL AS COMPUTATION OF INCOME. ACCORDINGLY, WE DIRECT THE AO TO DELETE THE ADDITION OF RS.21,01,862/ - , WHICH HAS ALREADY BEEN OFFERED AS INCOME B Y THE ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 24/08 / 201 6 . SD/ - ( SANJAY GARG ) SD/ - ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 24/08 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//