DCIT, Lucknow V. M/S U.P. State Sugar Corporation Ltd., Lucknow

ITA 479/LKW/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3345 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-06-2013
• Assessment Year: misc
• Appeal Filed On: 05-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Keywords: Opportunity of being heard; Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B : LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A. NO. 479 /LKW/ 2011 ASSESSMENT YEAR: 2003 - 04 DY.C.I.T., VS. M/S U.P. STATE SUGAR CORPN. RANGE - VI, LTD., LUCKNOW. LUCKNOW. PAN:AAACU3394C (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. RANU BISWAS, D.R. RESPONDENT BY : SHRI SAMRAT CHANDRA DATE OF HEARING : 04 /0 6 /201 3 DATE OF PRONOUNCEMENT : 07/06/2013 ORDER PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF CIT(A) ON VARIOUS GROUNDS BUT ALL THEY RELATE TO THE DISALLOWANCE OF CANE DEVELOPMENT EXPENSES TO THE EXTENT OF 50% OF THE TOTAL CLAIM. 2. THE FACTS, IN BRIEF, CULLED OUT FROM THE ORDERS OF THE AUTHORITIES BELOW ARE THAT THE ASSESSEE CLAIMED CANE DEVELOPMENT EXPENSES AT ` 34,52,230/ - BEFORE THE ASSESSING OFFICER BUT WAS DISALLOWED BY HIM AS THE ASSESSEE COULD NOT PLACE ANY EVIDENCE / PROOF WITH REGARD TO THIS EXPENDITURE INCURRED FOR PROCUREMENT OF SUGARCANE FOR MEMBERS ETC. 2 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND CIT(A) HAS RESTRICTED THE DISALLOWANCE TO 50% OF TOTAL CLAIM WITHOUT ASSIGNING VALID REASONS. 4. NOW THE REVEN UE IS BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT IF THE ASSESSEE CLAIMS CERTAIN EXPENDITURE, THE ONUS IS UPON HIM TO PLACE RELEVANT EVIDENCE TO ESTABLISH THAT THE EXPENDITURE WAS INCURRED FOR COMMERCIAL EXPEDIENCY. IN THE INSTANT CASE, THE ASSESSEE COULD NOT PLACE ANY DOCUMENTARY EVIDENCE EITHER BEFORE THE CIT(A) OR BEFORE THE ASSESSING OFFICER, THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER DESERVES TO BE CONFIRMED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS SUBMITTED THAT HE HAS PLACED THE AUDITED ACCOUNTS BEFORE THE CIT(A) AND HAVING CONVINCED WITH THE MAINTENANCE OF ACCOUNTS, THE CIT(A) RESTRICTED THE DISALLOWANCE TO 50%, THEREFORE, NO INTERFERENCE THEREIN IS CALLED FOR. 6. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE R IVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE RECORD, WE FIND THAT BEFORE THE ASSESSING OFFICER NO EVIDENCE WAS FILED WITH REGARD TO THE EXPENSES WHETHER IT WAS INCURRED FOR COMMERCIAL EXPEDIENCY. BEFORE THE CIT(A), IT WAS CONTENDED BY THE ASSESSEE T HAT THE EXPENSES WERE INCURRED TOWARDS DEVELOPMENT ACTIVITIES FOR GETTING BETTER QUALITY OF CANE RESULTING IN HIGHER YIELD. THE CIT(A) RELIED UPON THE ORDER FOR ASSESSMENT YEAR 2002 - 2003 WHEREIN THE DISALLOWANCE WAS CONFIRMED TO THE EXTENT OF 50% FOR THE REA SONS THAT APPELLANTS ACCOUNTS WERE NOT AUDITED, THE CIT(A) RESTRICTED THE 3 DISALLOWANCE TO 50% HAVING OBSERVED THAT IN THIS YEAR THE ACCOUNTS WERE DULY AUDITED. NOWHERE THE CIT(A) HAS EXAMINED THE NATURE OF EXPENDITURE WHETHER THEY WERE INCURRED FOR COMME RCIAL EXPEDIENCY OR FOR GETTING THE BETTER QUALITY OF SUGARCANE. HE SIMPLY RELIED UPON HIS ORDER FOR ASSESSMENT YEAR 2002 - 2003 AND RESTRICTED THE DISALLOWANCE TO 50%. THE APPROACH OF THE REVENUE CANNOT BE APPRECIATED. WE, THEREFORE, ARE OF THE VIEW THAT THIS ISSUE WAS NOT PROPERLY EXAMINED EVEN BY THE ASSESSING OFFICER WHILE MAKING THE ADDITION. ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO READ JUDICATE THE ISSUE AFRESH AFTER MAKING NECESSARY VERIFICATION WITH REGARD TO THE NATURE OF EXPENSES INCURRED BY THE ASSESSEE. IF THE EXPENSES ARE INCURRED FOR COMMERCIAL EXPEDIENCY, THE SAME MAY BE ALLOWED. NEEDLESS TO MENTION HERE THAT WHILE ADJUDICATIN G THE ISSUE, PROPER OPPORTUNITY OF BEING HEARD SHOULD BE GIVEN TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 07/06/2013 ) SD/. SD/. ( PRAMOD KUMAR) ( SUNIL KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/06/2013 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR