M/s Surada Biswanath Rice Mill (P) Ltd, Ganjam V. ACIT, Berhampur

ITA 49/CTK/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4437 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 20-01-2011
• Court: TRIBUNAL
• Department Lawyers: J KHANRADR
• Assessee Lawyers: P C SETHIAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 49/CTK/2011 / ASSESSMENT YEAR 2006 - 07 M/S.,SURADA BISWANATH RICE MILL (P) LTD., MAINROAD, SURADA,GANJAM PAN: AAFCS 4607 R - - - VERSUS - ASST.COMMISSI ONER OF INCOME - TAX, BERHAMPUR CIRCLE, BERHAMPUR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI P.C.SETHI,AR / FOR THE RESPONDENT: / SHRI J.KHANRA,DR / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER. THE ASSESSEE IS IN APPEAL AGITATING THE PART CONFIRMATION OF THE EXPENSES DISALLOWED BY THE ASSESSING OFFICER IN HIS ORDER U/S.144. 2. THE BRIEF FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT THE ASSESSE E COMPANY FILED RETURN OF INCOME DECLARING 1,43,519 BEING A RICE MILL. THE ASSESSING OFFICER IN HIS ORDER U/S.144 DISALLOWED DIRECT EXPENSES CLAIMED AT 2 1.83 LAKHS BY HOLDING THAT 50% OF THE EXPENSES ARE NOT RELATING TO THE BUSINESS OF THE ASSESSEE. 10 ,91,871 WAS ADDED TO THE RETURNED INCOME OF THE ASSESSEE. SIMILARLY REMAINING INDIRECT EXPENSES CLAIMED AT 2,97,289 WERE DISALLOWED AT 50% BY MAKING AN ADDITION OFRS.1,48,645. AGGRIEVED THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY WHO IN HI S LENGTHY DELIBERATION , IN HIS ORDER HAS, AS CAN BE PERUSED, ALLOWED THE ASSESSEES CONTENTION BY GRANTING RELIEF OF 8,46,554 AND 1,48,645 RESPECTIVELY ON THE RESPECTIVE ADDITIONS MADE BY THE ASSESSING OFFICER MENTIONED EARLIER . I.T.A.NO. 49/CTK/2011 2 THE ASSESSEE IS NOW IN APPEAL BEFORE US ON THE RESIDUAL AMOUNT CONFIRMED BY IDENTIFYING THE VARIOUS EXPENSES SUSTAINED BY THE LEARNED CIT(A) ON THE BASIS OF INDIVIDUAL DELIBERATION OF THE NATURE OF EXPENSES WHETHER DIRECT OR INDIRECT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE NATURE OF THESE EXPENSES WOULD CLEARLY INDICATE THAT ALL OF THEM HAVE BEEN INCURRED FOR THE BUSINESS AND WHEN THE LEARNED CIT(A) WAS APPRISED OF THE FACT THAT MAJOR PORTION HAS BEEN INCURRED FOR THE PURPOSE OF THE ASSESSEES BUSINESS TO B E GRANTED RELIEF HAD NOT INDICATED ANY REASON FOR SUSTAINING THE REMAINING AMOUNT. A SUITABLE DIRECTION MAY KINDLY BE GIVEN. 4. THE LEARNED DR SUBMITTED THAT HAVING BROUGHT TO TAX THE DISALLOWANCE OF EXPENSES UNDER THE PROVISIONS OF SECTION 144,THELEARN ED CIT(A) PERUSED THE ASSESSEE APPELLANTS CONTENTION BEFORE HIM BY GRANTING SUBSTANTIAL RELIEF. THE LEARNED COUNSEL FOR THE ASSESSEE AS OF NOW HAS NOT BEEN ABLE TO INDICATE WHY THE LEARNED CIT(A) SUSTAINED THE REMAINING THEREFORE WOULD CLEARLY INDICATE THAT THE ASSESSEE IS NOT ABLE TO CONTR OVERT THE FINDING OF THE SUSTENANCE OF THE RESIDUAL AMOUNT WHICH NOW STANDS AT APPROXIMATELY 2 LAKHS AS AGAINST 12 LAKHS DISALLOWED BY THE ASSESSING OFFICER. HE PRAYED THAT THE ORDER OF THE LEARNED CIT(A)MAY BE CONFIRMED. HE POINTED OUT THAT THE REVENUE OUGHT TO HAVE FILED AN APPEAL BEFORE THE TRIBUNAL AGAINST THE CIT(A)S ORDER FOR THE PURPOSE OF VIOLATION OF RULE 46A OF THE I.T.RULES,1962. 5. AFTER HEARING THE RIVAL CONTENTIONS, WE ARE INCLINED TO AGREE WITH THE CONTENTION OF THE LEARNED DR THAT THE BA SIS FOR CLAIMING DEDUCTION FOR 100% I.T.A.NO. 49/CTK/2011 3 EXPENSES HAS TO BE ON MATERIAL WHICH REMAINED UNCONTROVERTED EITHER BY THE ASSESSING OFFICER OR THE LEARNED CIT(A). IN HIS LENGTHY ORDER, THE LEARNED CIT(A) HAS CATEGORICALLY ASSESSED THE ASSESSEES INCOME BY WAY OF A S CRUTINY PROCESS AS IF U/S.143(3) WHICH DOES NOT REQUIRE ANY FURTHER DELIBERATION. FINDING NO MERIT IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE, WE HAVE NO HESITATION TO CONFIRM THE ORDER OF THE LEARNED CIT(A). 6. IN THE RESULT, THE ASSESSEE S APPEAL IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 28 TH APRIL, 2011 S D/ - S D/ - ( . . . ) , ( K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOU NTANT MEMBER. ( ) DATE: 28 TH APRIL, 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : M/S.,SURADA BISWANATH RI CE MILL (P) LTD., MAINROAD, SURADA,GANJAM 2 / THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, BERHAMPUR CIRCLE, BERHAMPUR. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY.