The Asstt. Commissionr of Income-tax, Amritsar. V. M/s. Ganesh Rice Mills, Tarn Taran

ITA 464/ASR/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7711 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 02-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: K R JAIN
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.464(ASR)/2011 ASSESSMENT YEAR:2008-09 PAN: ASSTT. COMMR. OF INCOME-TAX, VS. M/S. GANESH RICE M ILLS, CIRCLE-1, AMRITSAR. KHEM KARAN BHIKIWIND,TARN TA RAN. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. AMRIK CHAND, DR RESPONDENT BY:SH. K.R.JAIN, ADVOCATE DATE OF HEARING :02/05/2012 DATE OF PRONOUNCEMENT:07/05/2012 ORDER PER BENCH: THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE LD. CIT(A), AMRITSAR, DATED 21.06.2011 FOR THE ASSESSMENT YEAR 2008-09. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAD ERRED IN LAW IN DELETING THE ADDITION OF RS.30,02,6 14/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 69C OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAD ERRED IN ACCEPTING THAT THE ASSESSEE HAS NOT PAID B ONUS THOUGH IT WAS STATUTORILY REQUIRED TO PAY BONUS AS PER STATE GOVT . POLICY. ITA NO.464/ASR/2011 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAD ERRED IN ACCEPTING THAT ASSESSEE PURCHASED INFERIOR QUALITY OF PADDY IRRESPECTIVE OF THE FACT THAT YIELD OF RICE HAS BE EN 66% IN RESPECT OF PADDY MILLED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS NOT APPRECIATED THAT THE ASSESSEE HAS FAILED TO PR OVE WITH DOCUMENTARY EVIDENCE THAT NO BONUS WAS PAID BY HIM ON PART PURCHASE OF INFERIOR QUALITY OF PADDY. 5. THAT THE APPELLANT CARVES LEAVE TO AMEND OR ADD ANY OR MORE GROUND(S) OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE AO NOTI CED THAT THE ASSESSEE HAD PAID BONUS TO THE FARMERS FROM WHOM PADDY WAS PURCHASED TO THE TUNE OF RS.1,36,386/-. THE ASSESSEE HAD PURCHASED PADDY TO THE TUNE OF RS.31,390/- QTLS. THE BONUS PAYABLE WORKED OUT TO R S.31,39,000/-. THE ASSESSEE PAID BONUS AMOUNTING TO RS.30,02,614/- OU TSIDE THE BOOKS OF ACCOUNT. ON SHOWN CAUSE GIVEN, THE ASSESSEE SUBMI TTED AN EXPLANATION VIDE REPLY DATED 29.12.2010 AND THE REPLY OF THE ASSESSE E WAS NOT FOUND TO BE SATISFACTORY BY THE A.O. AND ACCORDINGLY MADE AN AD DITION OF RS.30,02,614/- BEING THE AMOUNT NOT EXPLAINABLE AND BEING OUTSIDE THE BOOKS OF ACCOUNT AND ACCORDINGLY ADDED TO THE INCOME OF THE ASSESSEE . 4. ON APPEAL, THE LEARNED CIT(A) DELETED THE SAME V IDE PARA 7.1 OF HIS ORDER FOR THE REASONS THAT THE AO HAD NOT BROUGHT O N RECORD ANY POSITIVE AND CONCRETE EVIDENCE TO ESTABLISH THE FACT THAT THE A SSESSEE HAD ACTUALLY INCURRED EXPENDITURE OUTSIDE ITS BOOKS OF ACCOUNT. THE ASSESSEE HAD FILED THE ITA NO.464/ASR/2011 3 AFFIDAVIT CATEGORICALLY DENYING TO HAVE INCURRED SU CH EXPENDITURE ON ACCOUNT OF BONUS. BUT THE AO HAS NOT CONTRADICTED THE SAME. ACCORDINGLY, THE LD. CIT(A) DELETED THE ADDITION MADE BY THE A.O. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE FACTS OF THE CASE. THE EXPLANATION GIVEN BY THE ASSESSEE VIDE LE TTER DATED 29.12.2010 HAS NOT BEEN CONSIDERED BY THE AO IN THE RIGHT PERSPECT IVE. AS PER EXPLANATION AVAILABLE AT PAGE 2 OF AOS ORDER, THE BONUS HAS BE EN PAID ON THE PADDY WHICH IS OF REQUIRED QUALITY AS PER ANNEXURE A OF THE SAID EXPLANATION. AS PER EXPLANATION-III ON CERTAIN PURCHASES HIGHER RAT E IS PAID WITH CLEAR UNDERSTANDING FROM THE SELLER THAT NO BONUS WILL BE PAID. IN OTHER WORDS PURCHASE RATE IS INCLUSIVE OF BONUS AS PER ANNEXURE -B OF THE EXPLANATION. IN CASE OF INFERIOR QUALITY OF PADDY, NO BONUS IS PAID . MOREOVER, PURCHASES HAD BEEN MADE OUTSIDE THE DISTRICT OF AMRITSAR AS PER E XPLANATION AND ANNEXURE- C. MOREOVER, THE ASSESSEE HAD FILED AFFIDAVIT THAT NO PAYMENT HAS BEEN MADE OUTSIDE THE BOOKS AMOUNTING TO RS.30,02,614/- TO FARMERS. THE SAID AFFIDAVIT IS AVAILABLE AT PAGE 10 OF THE PAPER BOOK . IT WAS ALSO ARGUED BY SH. K.R. JAIN, THE LD. COUNSEL FOR THE ASSESSEE THAT SU CH BONUS AS A MATTER OF FACT IS A SUBSIDY BY THE PUNJAB GOVT. WHICH IS PAID BY T HE PUNJAB GOVT. AND SUCH AMOUNT IS TAKEN FROM THE GOVT. AND GIVEN TO THE FAR MERS. IN ANY CASE, SUCH SUBSIDY IN THE FORM OF BONUS CANNOT BE ANY EXPENDIT URE IN THE HANDS OF THE ITA NO.464/ASR/2011 4 ASSESSEE. THE LD. DR COULD NOT CONTROVERT SUCH ARG UMENT OF THE LD. COUNSEL FOR THE ASSESSEE. IN ANY CASE, THE EXPENDITURE OUTS IDE THE BOOKS IS WITHOUT ANY MATERIAL ON RECORD AND THE AO HAS NOT ESTABLISH ED THAT SUCH EXPENDITURE HAS BEEN INCURRED BY THE ASSESSEE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) , WHO HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO. THUS, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.464(ASR)/2011 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7TH MAY, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 7TH MAY, 2012 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE:M/S. GANESH RICE MILLS, TARN TARAN 2. THE ACIT, CIR.1, ASR. 3. THE CIT(A), ASR. 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.