THE ACIT, 3(1), Bhopal V. M/S. RAMANI ICE CREAM COMPANY PVT. LTD., Bhopal

ITA 5/IND/2015

• Counselvise Citation: 522714 RSA 2015
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 05-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Business expenditure

Judgement Text

RAMANI ICE CREAM ITA 5/IND/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 5/IND/2015 A.Y.2010-11 ACIT 4(1) BHOPAL ::: APPELLANT VS M/S RAMANI ICE CREAM CO. PVT. LTD BHOPAL :: RESPONDENT APPELLANT BY SHRI R.A. VERMA RESPONDENT BY NONE DATE OF HEARING 1.12.2015 DATE OF PRONOUNCEMENT 7 .12.2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A)-I, BHOPAL, DATED 30.10.20 14. RAMANI ICE CREAM ITA 5/IND/2015 2 2. THE ONLY GROUND TAKEN BY THE REVENUE IN THIS APPEAL IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE OF RS.20,36,393/- MADE BY THE ASSESSING OFFICER OUT OF EXPENSES UNDER THE HEAD RATE DIFFEREN CE. 3. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF ICE CREAM. THE RETURN OF INCOME WAS FILED DECLARING INCOME AT RS.1,30,75,790/-. THE ASSESSING OFFICER MADE AN ADDITI ON OF RS.20,36,393/- ON ACCOUNT OF EXPENSES DEBITED UN DER THE HEAD RATE DIFFERENCE. THE ASSESSEE CARRIED THE MAT TER BEFORE THE LEARNED CIT(A) WHO HAS DELETED THE ADDITION BY HOLDING THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FURNISHED EXPLANATION REGARDING NATURE OF EXPENSES DEBITED UNDER THE HEAD RATE DIFFERENCE. TH E ASSESSING OFFICERS OBSERVATION THAT THE ASSESSEE HAS N OT OFFERED ANY EXPLANATION AS TO HOW THIS EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF B USINESS RAMANI ICE CREAM ITA 5/IND/2015 3 IS NOT FACTUALLY CORRECT. THE LEARNED CIT(A) ALSO OBSER VED THAT IT IS A NORMAL BUSINESS PRACTICE THAT BUSINESSMAN ALLOWS REBATE, INCENTIVES AND RATE DIFFERENCE ON THE VO LUME OF SALES MADE TO VARIOUS PARTIES. THE LEARNED CIT(A) ALSO OBSERVED THAT THE EXPENDITURE INCURRED WAS FOR COMMER CIAL EXPEDIENCY BY ISSUING CREDIT NOTES TO VARIOUS PARTIES . HE HAS ALSO GIVEN DETAILED CHART PARTYWISE WHERE CREDIT NOT ES OR RATE DIFFERENCE WERE ALLOWED IN HIS ORDER AT PAGES 9 , 10 AND 11. THE LEARNED CIT(A) ALSO RECORDED THAT THERE W AS NO CONTRARY MATERIAL ON RECORD TO DEMONSTRATE THAT THE ASSESSEE HAS EITHER NOT ALLOWED RATE DIFFERENCE CREDI TED TO THESE PARTIES OR INFLATED THE RATE DIFFERENCE AMOUNT. HE HAS ALSO RECORDED THAT THE ASSESSEE HAS ACTUALLY ALLOWED CREDIT OF RATE DIFFERENCE OF RS.20,36,393/- TO VARI OUS CUSTOMERS ON VOLUME SALES TO INCREASE THE TURNOVER OF THE BUSINESS. HE, THEREFORE, TREATED SUCH REDUCTION IN P RICE OF RAMANI ICE CREAM ITA 5/IND/2015 4 CREDIT NOTE AS NORMAL BUSINESS EXPENDITURE INCURRED DURING THE COURSE OF BUSINESS AND ALLOWABLE. 4. BEFORE US, NONE ATTENDED ON BEHALF OF THE ASSESSEE. HOWEVER, THE LEARNED DR WAS HEARD WHO HAS MAINLY RELIED UPON THE ORDER OF THE ASSESSING OFFICER. HE HAS NOT BROUGHT ANY POSITIVE EVIDENCE TO CONTRADICT THE FINDINGS OF T HE LEARNED CIT(A). AFTER HEARING THE LEARNED DR AND PERUS ING THE RECORD, WE FIND THAT THERE IS NO MERIT IN THE APP EAL OF THE REVENUE. WE, THEREFORE, SUSTAIN THE ORDER OF THE LEARNED CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. PRONOUNCED IN OPEN COURT ON 7TH DECEMBER, 2015 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 7TH DECEMBER, 2015 RAMANI ICE CREAM ITA 5/IND/2015 5 DN/-