Kashmir Steel Rolling Mills, Jammu V. The Dy. Commissioner of Income Tax, Jammu

ITA 509/ASR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7855 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-08-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 13-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K. CHOUDHRY, JUDICIAL MEMBER I.T.A NO. 509/(ASR)/2016 ASSESSMENT YEAR: 2011-12 PAN: AABFK4948A [ KASHMIR STEEL ROLLING MILLS, SIDCO INDUSTRIAL COMPLEX, BARI BRAHMANA, JAMMU. VS. D. C. I. T. CENTRAL CIRCLE, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. TARUN BANSAL (ADV. ) RESPONDENT BY: SH. RAHUL DHAWAN (D. R.) DATE OF HEARING: 07.08.2017 DATE OF PRONOUNCEMENT: 04.09.201 7 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(A), LUDHIANA DATED 03.08.2016 FOR ASST. YEAR: 2011-12. 2. THE ONLY GRIEVANCE RAISED BY ASSESSEE IN THIS AP PEAL IS THE ACTION OF LD. CIT(A) BY WHICH HE HAS CONFIRMED THE DISALLOWAN CE OF RS.4,62,630/- BEING 1/10 OF ELECTRIC AND MACHINERY EXPENSES. 3. AT THE OUTSET, THE LD. AR INVITED OUR ATTENTION TO THE ASSESSMENT ORDER AND SUBMITTED THAT ASSESSING OFFICER WITHOUT REJECTING BOOKS OF ACCOUNT OR WITHOUT POINTING OUT ANY MISTAKE OR DISC REPANCIES IN THE BOOKS OF ACCOUNT ARBITRARILY DISALLOWED 10% OUT OF ELECTRIC AND MACHINERY REPAIRS WHICH WAS NOT WARRANTED. THE LD. AR SUBMITTED THAT BEFORE LD. CIT(A) ALSO IT WAS SUBMITTED THAT THE EX PENSES UNDER THESE ITA NO. 509(ASR)/2016 ASSESSMENT YEAR: 2011-12 2 HEADS INCURRED DURING EARLIER YEARS WERE LOWER BUT HE ALSO UPHELD THE ACTION OF ASSESSING OFFICER. 4. THE LD. AR IN THIS RESPECT SUBMITTED THAT EXPENS ES UNDER BOTH HEADS DURING THE YEAR UNDER CONSIDERATION WERE LOWE R THAN IN THE EARLIER YEARS AND MOREOVER IN THE EARLIER YEARS NO DISALLOW ANCE WAS MADE WHEREAS THE ASSESSMENTS WERE COMPLETED U/S 143(3) O F THE ACT. THE LD. AR FURTHER SUBMITTED THAT BOOKS OF ACCOUNT OF THE A SSESSEE WERE ALSO NOT REJECTED AND THE ASSESSMENT WAS COMPLETED U/S 143(3 ) OF THE ACT, AND THEREFORE ALSO THE AD-HOC DISALLOWANCE WAS NOT WARR ANTED. 5. THE LD. DR ON THE OTHER HAND, HEAVILY PLACED HIS RELIANCE ON THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THOUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSING OFFICER MA DE THE DISALLOWANCE @ 1/10 OF THESE EXPENSES BY HOLDING AS UNDER: 6. IT IS FURTHER NOTICED THAT THE ASSESSEE HAS CLA IMED HEAVY EXPENSES UNDER THE FOLLOWING HEADS:- ELECTRIC REPAIRS RS.13,52,689/- MACHINERY REPAIRS RS.32,73,639/- TOTAL RS.46,26,328/- DURING THE COURSE OF EXAMINATION OF BOOKS OF ACCOU NTS THE ASSESSEE WAS NOT ABLE TO PRODUCE SOME OF THE EXPENDITURE VOU CHERS IN RESPECT OF THE ABOVE. THUS A DISALLOWANCE @ 1/10 OF THESE EXPENSE IS BEING MADE WHICH LEADS TO AN ADDITION OF RS.4,62,630/- WE FIND THAT ASSESSING OFFICER HAS NOT MADE ANY AD VERSE FINDING REGARDING THESE EXPENSES EXCEPT THAT EXPENSES WERE HEAVY AND ASSESSEE WAS NOT ABLE TO PRODUCE SOME OF THE EXPENDITURE VOU CHERS. WHEREAS WE ITA NO. 509(ASR)/2016 ASSESSMENT YEAR: 2011-12 3 FIND THAT ASSESSEE INCURRED LOWER EXPANSES DURING T HE YEAR UNDER CONSIDERATION AS COMPARED TO EARLIER YEARS AS IS AP PARENT FROM THE SUBMISSIONS OF ASSESSEE RECORDED BY LD. CIT(A) AT P AGE 6 OF HIS ORDER. THE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNT AND NEITHER HAD POINTED OUT ANY DISCREPANCY IN THE EXPENSES. TH EREFORE THE ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF ASSESSING OF FICER IS NOT JUSTIFIED. THE HON'BLE AMRITSAR BENCH IN THE CASE OF M/S. THE BATALA CO-OPERATIVE SUGAR MILLS LTD. VIDE ITS ORDER DATED 3 RD JULY, 2008, UNDER SIMILAR FACTS AND CIRCUMSTANCES HAS HELD THAT WITHOUT REJECTION O F BOOKS OF ACCOUNT AD-HOC DISALLOWANCE IS NOT WARRANTED. THE FINDINGS OF THE HON'BLE TRIBUNAL ARE REPRODUCED BELOW: 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, THE ASSESSEES BOOKS OF ACCOUNT ARE AUD ITED UNDER SECTION 44AB OF THE INCOME-TAX ACT, 1961 AND AT THE TIME OF ASSESSMENT, THE ASSESSEE HAD PRODUCED BOOKS OF ACCOUNT, DOCUMENTS A ND VARIOUS DETAILS AND INFORMATION NECESSARY FOR THE PURPOSE OF ASSESS MENT. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T. ACT. THERE IS CATEGORICAL FINDING GIVEN BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS PROD UCED BOOKS OF ACCOUNT IN SUPPORT OF THE CLAIM OF THE ASSESSEE. THE ASSESS ING OFFICER IN ITS ASSESSMENT ORDER DATED 28.12.2006 HAD NOT REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THERE IS NO FINDING GIVEN BY TH E ASSESSING OFFICER IN ITS ASSESSMENT ORDER THAT THE BOOKS OF ACCOUNT ARE NOT RELIABLE OR UNVERIFIABLE. HENCE, IT IS INFERRED THAT THE ASSESSEES BOOKS OF ACCOUNT ARE NOT AT ALL REJECTED. THE ASSESSING OFFICER CANNOT MAKE ANY ES TIMATE ADDITION WITHOUT REJECTING THE BOOKS OF ACCOUNT. IF THE ASSE SSING OFFICER WAS TO MAKE ANY ADDITION FIRST OF ALL HE WAS REQUIRED TO R EJECT THE BOOKS OF ACCOUNT WHICH HE HAS FAILED TO DO SO. HENCE, IN OUR OPINION, THERE IS NO QUESTION OF MAKING ANY AD-HOC DISALLOWANCE TOWARDS CONSUMPTION OF BAGASSE. ACCORDINGLY, THE ADDITION IS UNWARRANTED. THE GROUND TAKEN BY THE ASSESSEE IS ALLOWED. IN THE PRESENT CASE ALSO THE ASSESSING OFFICER HAS NOTED IN PARA 1 OF HIS ASSESSMENT ORDER THAT BOOKS OF ACCOUNTS AND VOUCHERS WERE ITA NO. 509(ASR)/2016 ASSESSMENT YEAR: 2011-12 4 PRODUCED AND TEST CHECKED AND AT NO POINT OF TIME B OOKS OF ACCOUNTS WERE REJECTED. THEREFORE FOLLOWING THE ABOVE JUDICIAL PRECEDENTS AND IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPEAL FIL ED BY ASSESSEE IS ALLOWED. 7. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.09.2017. SD/- SD/- (N. K. CHOUDHRY) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 04.09.2017. /GP/SR. PS . COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER