L.H Sugar Factories Ltd., Pilibhit V. Astt. Commissioner of Income Tax, Bareilly

ITA 488/LKW/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0560 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 23-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AKSHAY GUPTA
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 488/LKW/2016 ASSESSMENT YEAR: 2008 - 09 L.H. SUGAR FACTORIES LTD. PILIBHIT V. ACIT CI RCLE - II BAREILLY T AN /PAN : AAACL4597L (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI AKSHAY GUPTA, C.A. RESPONDENT BY: SHRI A. K. SINGH, CIT (DR) DATE OF HEARING: 12 12 201 7 DATE OF PRONOUNCEMENT: 13 12 201 7 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LD. CIT(A), BAREILLY, DATED 30/6/2016. 2 . THE SOLE GRIEVANCE OF THE ASSESSEE IS AGAINST CONFIRMATION OF DISALLOWANCE OF RS.34,58,297/ - BY THE LD. CIT(A) AS IMPOSED BY THE ASSESSING OFF ICER IN RESPECT OF INTEREST ON EXTRA LEVY PRICE. 3 . THE FACTS IN BRIEF ARE THAT RS.83,48,934/ - WAS ALREADY PROVIDED BY THE ASSESSEE IN THE BOOKS OF ACCOUNT TOWARDS INTEREST AND THERE WAS SHORTFALL OF RS.34,58,297/ - . THE COPY OF ACCOUNTS REGARDING PROVISION O F INTEREST ON EXTRA LEVY PRICE WAS FURNISHED TO THE DEPARTMENT, WHICH IS ON RECORD. THE ASSESSEE HAS DEBITED RS.34,58,297/ - IN THE BOOKS OF ACCOUNT AS ON 31/3/2008 UNDER THE HEAD EXPENSES RELATED TO EARLIER YEARS AND HAS SHOWN IN THE PROFIT & LOSS ACCOU NT. THE ASSESSEE HAS [ ITA NO.488/LKW/2 016 ] 2 CLAIMED THIS AMOUNT OF RS.34,58,297/ - AS DEDUCTION IN THE RETURN OF INCOME FOR ASSESSMENT YEAR 2008 - 09. THIS WAS NOT ALLOWED BY THE ASSESSING OFFICER, BUT THE LD. CIT(A) VIDE ORDER DATED 15/3/2013 ALLOWED THIS MATTER IN FAVOUR ORDER OF THE ASSESSEE. THE DEPARTMENT PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 9/2/2016 SET ASIDE THE MATTER TO THE FILE OF THE LD. CIT(A) FOR FRESH DECISION BY WAY OF A SPEAKING ORDER. 4 . THE LD. CIT(A) IN THE SECOND ROUND OF APPE AL HAS HELD THAT NO DEDUCTION CAN BE ALLOWED TO THE ASSESSEE ON ACCOUNT OF PROVISIONS OF INTEREST , WHICH IS NOT RELATED TO THE CURRENT YEAR. THE LD. CIT(A) HELD THAT THE EXPENSES I N EARLIER YEARS WILL BE ALLOWED ONLY ON PAYMENT BASIS AND NOT ON THE BASIS OF PROVISION AND ADDITION MADE BY THE ASSESSING OFFICER WAS SUSTAINED BY THE LD. CIT(A). 5 . AT THE TIME OF HEARING, THE LD. A.R. OF THE ASSESSEE VEHEMENTLY ARGUED THAT IN THE FIRST ROUND OF APPEAL , THE MATTER WAS ALLOWED BY THE LD. CIT(A) AND DECIDED IN FAVOU R OF THE ASSESSEE . AGGRIEVED BY THE ORDER OF THE LD. CIT(A), REVENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL WHILE DECIDING THE APPEAL OF THE REVENUE, SET ASIDE THE MATTER TO THE FILE OF THE LD. CIT(A) AND THE LD. CIT(A) IN THE SECOND ROU ND OF APPEAL HAS SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER ALTHOUGH THERE WAS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE, THE ORDER OF THE LD. CIT(A) IS NOT SUSTAINABLE IN THE EYES OF LAW AND IS LIABLE TO BE DISMISSED. 6 . THE LD. D.R., ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7 . WE HAVE PERUSED THE RECORD, HEARD THE RIVAL CONTENTIONS, ANALYZED THE FACTS AND CIRCUMSTANCES OF THE CASE AND WE FIND THAT IN THE [ ITA NO.488/LKW/2 016 ] 3 ORDER OF THE ASSESSING OFFICER , ON THIS ISSUE , I T IS OBSERVED THAT THE ASSESSEE HAS NOT SUBMITTED ANY SATISFACTORY REPLY AND THE EXPE NSES PERTAIN TO EARLIER YEARS, HENCE NOT AN ALLOWABLE EXPENDITURE. THE LD. CIT(A) HAS RESORTED TO THE PROVISIONS OF SECTION 37 OF THE ACT AND HAS HELD THAT TO BE AN ALLOW ABLE EXPENDITURE , IT HAS TO BE AN EXPENDITURE AND NOT PROVISION. WHEREAS THE LD. A.R. OF THE ASSESSEE CONTENDED THAT IN THE FIRST ROUND OF APPEAL, IT HAS BEEN ALLOWED BY THE LD. CIT(A) AND IN THE SECOND ROUND, HE HAS DISMISSED THE SAME ALTHOUGH THERE WAS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE . WE ARE , THEREFORE, OF THE CONSIDERED VIEW THAT , TAKING INTO ACCOUNT ALL THESE FACTS, THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE LD. CIT(A) IN ORDER TO ADJUDICATE IT AFRESH. WE, I N THE INTEREST OF JUSTICE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE LD. CIT(A) FOR THE DECIDING THE SAME AFRESH. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 /12/ 201 7 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH DECEMBER , 2017 JJ: 1212 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR