The ACIT, 1 (1), Bhopal V. M/s Natrajan Proteins Ltd, Itarsi

ITA 479/IND/2005

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2392 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2009
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-12-2009
• Assessment Year: 1998-1999
• Appeal Filed On: 06-06-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R N GUPTA
• Keywords: Depreciation
• Section: 80HH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGENDER SINGH, JM & SHRI V.K.GUPTA, AM ITA NO.479/IND/2005 AY: 2001-2002 ASSISTANT COMMISSIONER OF INCOME TAX 1(1), BHOPAL APPELLANT VS. M/S NATRAJ PROTEINS LTD. NAGPUR KALAN ORDANANCE FACTORY RAOD ITARSI PAN AAACN-8277-H RESPONDENT ASSESSEE BY R.N.GUPTA, CA DEPARTMENT BY SMT APARNA KARAN, SENIOR, DR PER V.K.GUPTA, AM THIS APPEAL, FILED BY THE REVENUE, ARISES OUT OF OR DER OF LD. CIT DATED 21.03.2005 2. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSED THE MATERIAL ON RECORD. 3. GROUND NO. 1 OF APPEAL READS AS UNDER:- 1. DELETING THE ADDITION OF RS. 1 LAKH RIGHTLY DISA LLOWED BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESS COAL CONSUMPTION CLAIM ED. 4. THE FACTS, IN BRIEF, ARE THAT ASSESSEE IS ENGAGE D IN MANUFACTURING OF VEGETABLE OIL AND DE-OILED CAKE. THE AO FOUND THAT ASSESSEE DID NOT MAINTAIN DAY TO DAY RECORD OF CONSUMPTION OF COAL. THE AO COMPARED THE 2 THREE YEARS DATA OF CONSUMPTION OF COAL. THE ASSESS EE EXPLAINED THAT THE MANUFACTURING PROCESS INVOLVED MANUAL LABOUR, HENCE , NO STANDARD FORMULA COULD BE APPLIED AS REGARD TO THE CONSUMPTION OF CO AL THE AO, HOWEVER, REJECTED THIS CONTENTION OF THE ASSESSEE AND FOR WA NT OF VERIFIABLE DETAILS DISALLOWED A SUM OF RS. 1 LAC ON ADHOC BASIS OUT OF COAL CONSUMPTION EXPENSES. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A) WHO FOUND THAT COAL CONSUMPTION PER METRIC TONE OF SEED AND REFINING OF OIL WAS LEAST IN THIS YEAR AS COMPARED TO EARLIER TWO YEARS, HENCE, HE DELETED THE ADDITION MADE BY THE AO. AGGRIEVED B Y THIS, THE REVENUE IS IN APPEAL BEFORE US. 5. THE LD. DR PLACED STRONG RELIANCE ON THE ORDER O F THE AO. 6. THE LD COUNSEL FOR THE ASSESSEE, ON THE OTHER HA ND, PLACED STRONG RELIANCE ON THE ORDER OF LD. CIT(A). 7. IT IS EVIDENT THAT THE COAL CONSUMPTION IS LEAST IN TERMS OF PROCESSING OF SEED AND REFINING OF OIL IN THE YEAR UNDER CONSI DERATION AS COMPARED TO EARLIER TWO YEARS AND MANUAL LABOUR IS INVOLVED IN THE MANUFACTURING PROCESS, HENCE, WE ARE OF THE OPINION THAT THE LD. CIT (A) HAS RIGHTLY DELETED THE IMPUGNED DISALLOWANCE. THUS, THIS GROUND OF THE REVENUE IS DISMISSED. 8. GROUND NO. 2 READS AS UNDER:- 3 2. DIRECTING THE ASSESSING OFFICER TO VERIFY THE UN SETTLED CLAIMS OF INSURANCE OF RS. 2 LAKHS. 9. THE FACTS, IN BRIEF, ARE THAT ASSESSEE LODGED CL AIMED WITH INSURANCE COMPANY WORTH RS. 2768785/- WHICH WERE SETTLED AT R S. 1915702/-. THE DIFFERENCE OF RS. 853083/- WAS CLAIMED AS EXPENDITU RE. THE AO DISALLOWED A SUM OF RS. 2 LAC OUT OF SUCH EXPENDITURE FOR THE RE ASON THAT IT WAS CASE OF LODGING CLAIMS AT HIGHER VALUES AND EACH ENTRY WAS NOT VERIFIABLE. THE LD. CIT (A), ON APPEAL BY THE ASSESSEE HELD THAT THIS A CTION OF THE AO WAS NOT JUSTIFIED AND DIRECTED THE AO TO ASCERTAIN THE CORR ECT FACTS AND TAKE A DECISION THEREAFTER. AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFORE US. 10. THE LD. DR PLACED STRONG RELIANCE ON THE ORDER OF THE AO. 11. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, PLACED STRONG RELIANCE ON THE ORDER OF LD. CIT(A). 12. WE HAVE CONSIDERED THE SUBMISSION MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND ORDERS OF AUTHORITIES BELOW. WE OUR O PINION, THE ACTION OF THE AO IS A CASE OF PRESUMPTION /SUSPICION ONLY, HENCE, WE CONFIRM THE FINDINGS OF THE LD CIT(A). THUS, THIS GROUND OF THE REVENUE IS ALSO DISMISSED. 13. GROUND NO.3 READS AS UNDER:- 4 3. DELETING THE ADDITION OF RS. 2 LAKHS RIGHTLY DISALL OWED BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXPENSES CLAIMED TO BE MADE ON D.G.SET. 14. THE FACTS, IN BRIEF, ARE THAT THE AO DISALLOWED A SUM OF RS. 2 LACK OUT OF DIESEL GENERATOR RUNNING AND MAINTENANCE EXPENSE S FOR WANT OF DAY TODAY RECORD OF CONSUMPTION OF DIESEL AND OTHER EXPENSES. IN APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT COMPLETE RECORD OF DIESEL CONSUMPTION HAD BEEN MAINTENTED AND MSEB HAD ALSO VERIFIED THE DG SET RECORD WHEREIN NO DISCREPANCY/ SHORTCOMING WAS FOUND, HENCE, THERE WAS NO JUSTIFICATION FOR MAPING SUCH DISALLOWANCE. THE LD CIT(A) ACCEPTED TH IS CONTENTION OF THE ASSESSEE AND DELETED THE DISALLOWANCE . AGGRIEVED B Y THIS, THE REVENUE IS IN APPEAL BEFORE US. 15. THE LD. DR PLACED STRONG RELIANCE ON THE ORDER OF THE AO. 16. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, PLACED STRONG RELIANCE ON THE ORDER OF LD. CIT(A). 17. ON DUE CONSIDERATION OF FACTS AND THE CIRCUMSTA NCES, WE ARE OF THE VIEW THAT THIS DISALLOWANCE WAS MADE BY THE AO WITH OUT VERIFYING THE RECORDS MAINTAINED BY THE ASSESSEE WHICH WERE PRODU CED BEFORE THE LD. CIT(A) ALSO, HENCE, NOT JUSTIFIED. THUS, THIS GROUN D OF THE REVENUE IS ALSO DISMISSED. 5 18. GROUND NO. 4 READS AS UNDER:- 4. DELETING THE ADDITION OF RS. 2 LAKHS RIGHTLY DIS ALLOWED BY THE ASSESSING OFFICER ON ACCOUNT OF UNVERIFIABLE EXPENSES MADE ON PURCHASE BARDANA. 19. THE FACTS, IN BRIEF, ARE THAT THE AO EXAMINED T HE BARDANA EXPENSES CLAIMED BY THE ASSESSEE. THE ASSESSEE EXPLAINED THE METHOD OF ACCOUNTING RELATING TO PURCHASE OF BARDANA AND VALUATION THERE OF .IT WAS ALSO SUBMITTED THAT NO UNIFORM RATE OF VALUATION COULD BE ADOPTED AS SUCH VALUATION DEPENDED UPON THE CONDITION OF BARDANA. THE AO HELD THAT SINCE THE VALUATION OF BARDANA REMAINED UNVERIFIED, HENCE, HE DISALLOWED A SUM OF RS. 2 LACK OUT OF PACKING MATERIAL EXPENSES ON ADHOC BA SIS. 20. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE LD. CIT(A) WHEREIN IT WAS CONTENTED THAT PURCHASE OF BA RDANA WAS NOT DISPUTED BY THE AO NOR CONSUMPTION THEREOF WAS DISPUTED . IT WAS FURTHER CONTENTED THAT THE AO DOUBTED THE VALUATION OF BARDANA WITHOU T ANY EVIDENCE BRINGING ON RECORD, HENCE, SUCH ACTION OF THE AO WAS A CASE OF PRESUMPTION/SUSPICION ONLY. THE CIT(A) AGREEING WITH THESE CONTENTIONS OF THE ASSESSEE DELETED THE ADDITION. AGGRIEVED BY THIS, THE REVENUE IS IN APPE AL BEFORE US. 21. THE LD. DR PLACED STRONG RELIANCE ON THE ORDER OF THE AO. 22. THE LD COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, PLACED STRONG RELIANCE ON THE ORDER OF LD. CIT(A). 6 23. WE HAVE CONSIDERED SUBMISSION MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND ORDERS OF THE AUTHORITIES BELOW IT IS NO TED THAT THE AO HAS DOUBTED THE METHOD OF VALUATION OF BARDANA, HOWEVER , HE HAS NOT BROUGHT SUFFICIENT MATERIAL ON RECORD TO SHOW THAT SUCH VAL UATION WAS ACTUALLY INCORRECT . HENCE, WE AGREE WITH THE FINDINGS OF TH E CIT(A) THAT SUCH ADDITION IS A CASE OF PROBABILITY/ SUSPICION ONLY . THUS, THIS GROUND OF THE REVENUE IS ALSO DISMISSED. 24. GROUND NO. 5 READS AS UNDER:- 5. DELETING THE ADDITION OF RS. 28,820/- RIGHTLY DI SALLOWED BY THE ASSESSING OFFICER ON ACCOUNT OF PF PAYMENTS. 26. BOTH THE PARTIES AGREED THAT THIS AMOUNT HAD BE EN DEPOSITED BEFORE THE DUE THAT OF FILING OF RETURN, HENCE, IT COULD NOT B E DISALLOWED AS PER THE PROVISIONS OF LAW. ACCORDINGLY WE DISMISS THIS GRO UND OF THE REVENUE ALSO. 27. GROUNDS NO. 6 & 7 READ AS UNDER:- 6. DELETING THE ADDITION OF RS. 24,582/- RIGHTLY DI SALLOWED BY THE ASSESSING OFFICER ON ACCOUNT OF DEPRECIATION ON VEHICLES FOR PERSONAL USE. 7. DELETING THE ADDITION OF RS. 22,582/- RIGHTLY DI SALLOWED BY THE ASSESSING OFFICER ON ACCOUNT OF MAINTENANCE OF VEHICLES FOR P ERSONAL USE. 28. WE FIND THAT THE IMPUGNED DISALLOWANCES WERE MA DE BY THE AO ON ACCOUNT OF PERSONAL USE WHICH CANNOT BE DONE IN THE CASE OF AN ASSESSEE, 7 BEING A COMPANY. HENCE, BOTH THESE GROUNDS OF THE R EVENUE ARE ALSO DISMISSED. 29. GROUND NO. 8 READS AS UNDER:- 8. DELETING THE ADDITION OF RS. 21,784/- RIGHTLY DI SALLOWED BY THE ASSESSING OFFICER WHILE CALCULATING THE TAX REBATE U/S 80HH A ND 80I. 30. THE LD COUNSEL FOR THE ASSESSEE FAIRLY SUBMITTE D THAT AFTER CONSIDERING THE BROUGHT FORWARD LOSSES, THE GROSS TOTAL INCOME WAS NIL , HENCE, NO DEDUCTION UNDER THESE SECTIONS COULD BE GIVEN. ACCO RDINGLY, WE ACCEPT THIS GROUND OF THE REVENUE. 31. IN THE RESULT, APPEAL FILED THE REVENUE STANDS PARTLY ALLOWED. 32. ORDER PRONOUNCED IN THE OPEN COURT ON 14/12/200 9 (JOGINDER SINGH) (V.K.GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14/12/2009 *KONGE*