ASHOK KUMAR MODI, IST LANE, AMRIK SINGH ROAD, V. INCOME TAX OFFICER WARD-1(1), BATHINDA

ITA 51/ASR/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7405 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-04-2024
• Assessment Year: misc
• Appeal Filed On: 08-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHIT KUMAR NIGAM
• Keywords: Set aside
• Section: 143(3); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. No.51/Asr/2024 Assessment Year: 2017-18 Ashok Kumar Modi, 1 st Lane Amrik Singh Road, Maharaja Aggarsain Nagar, Bathinda. [PAN:-AIGPM6191G] (Appellant) Vs. ADDL/JCIT(A)-12, Mumbai. (Respondent) Appellant by None (Written submission) Respondent by Sh. Mohit Kumar Nigam, Sr. DR Date of Hearing 24.04.2024 Date of Pronouncement 03.05.2024 ORDER Per: Udayan Dasgupta, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals), migrated to Addl / JCIT (A)-12 Mumbai, [in brevity the ‘CIT (A)’], order passed u/s 250 of the Income Tax Act 1961 (in brevity the Act) dated 18.12.2023 for A.Y. 2017-18, which in turn arose out of the I.T.A. No.51/Asr/2024 Assessment Year: 2017-18 2 order of the AO – Ward 1(1), Bhatinda, dated 17/12/2019 passed u/s 143(3) of the Act 61 2. The assessee has taken the following grounds: - “1. The ld. Additional /Joint Commissioner of Income tax (Appeal) has erred in law as well as on facts while confirming the disallowance of Rs.6,96,819/- on account of custom duty not shown as payable in the balance sheet. 2. The assessee leaves to add or alter any of the grounds of appeal before or at the time of hearing.” 3. Brief fact of the case is that the assessee e-filed his return of income on 05.10.2017 declaring income at Rs.6,09,420/- after claiming deduction under Chapter VI-A amounting to Rs. 72,192/-. The case was selected for limited scrutiny through CASS with the directions to verify “cash deposited during the year and customs duty paid”. 4. During course of assessment proceedings, it was noted by the AO that an amount of Rs. 58,41,789/- has been debited in the trading and profit and loss account, for the year ending 31/03/2017 (FY 2016-17) (under Gandhidham I.T.A. No.51/Asr/2024 Assessment Year: 2017-18 3 Branch), under the head customs duty, out of which an amount of Rs. 51,44,970/- was actually paid, during the year and the balance amount of Rs. 6,96,819/-, which has remained payable at the end of the year, should have been reflected in the balance sheet as unpaid liability as on 31/03/2017. Moreover, as per information in the departmental system, the custom duty actually paid was reflected at Rs. 51,44,970/- (and not Rs. 58,41,789/- as claimed by the assessee), as such this difference amount of Rs. 6,96,819/- was added back to the total income , being excess amount debited in accounts, which is not related to the year under appeal. 5. The matter was carried in first appeal, where the assessee filed fresh evidence by way of a debit note issued by one “Delta Global Resources Private Ltd”, the supplier of the goods, amounting to Rs. 6,96,819/- being the claim of reimbursement of customs duty paid against bill of lading No MG-55 dated 10/02/2017 through SBI , for discharge of vessel MV MAGSENGER – 19 Discharge Port Kanda , on behalf of the assessee . 6. In the remand report, filed by the AO before the first appellate authority, the AO stated that the debit note issued has been examined, and contention of the assessee is not acceptable due to the fact that the amount of Rs. 6,96,819/- , being I.T.A. No.51/Asr/2024 Assessment Year: 2017-18 4 custom duty payable should have been shown as statutory liability in the books of accounts of the assessee , as at year end ,and naturally the said amount should have been reflected somewhere in the liability side of the balance sheet as at 31/03/2017. On the basis of the remand report, the first appellate authority, confirmed the addition, against which the assessee is in appeal before the Tribunal. 7. The appellant has not appeared before the Tribunal on the date of hearing, neither physically nor virtually, but has filed a written submission before the Bench, and relied upon the written submission for disposal of the case. 8. The contention of the appellant, is that the said unpaid portion of the customs duty amounting to Rs. 6,96,819/- is already reflected in the liability side of the balance sheet as at 31/03/2017, under the head “Sundry Creditors” and in this case under the creditor “Delta Global Services Private limited”, who is the sundry creditor of the appellant. The relevant portion of the appellants written submission is reproduced below: “The credit balance of Rs.31,47,319/- of M/s Delta Global Resources Pvt. Ltd. On 31.03.2017 has been shown payable under the detail of ‘Sundry Creditors” Schedule C of the audit I.T.A. No.51/Asr/2024 Assessment Year: 2017-18 5 report for the year ended 31 st March 2017. In a nutshell, custom duty of Rs.6,96,819/- has been shown payable under the head Sundry Creditors instead of statutory liabilities.” 9. That the copy of audited balance sheet for the relevant year under appeal has not been submitted before us by the appellant, and no paper book is filed, and no sundry creditors list is before us, except a written submission filed by the appellant. 10. We have heard the Ld. DR and consulted the orders of lower authorities on record and the written submission filed by the appellant. We are of the opinion that if the amount of customs duty is debited in the Trading, Profit and Loss Account, (as observed by the AO in paragraph 3 of his order), the unpaid amount of Rs. 6,96,819/-, must be reflected as outstanding liability in the balance sheet as at the end of the year, and as per claim of the appellant, it is duly reflected under the head Sundry Creditors in the balance sheet, as on year end, 31 st March 2017. 11. We accordingly set aside the matter to the AO, with a direction, only to the limited extent, of verifying the outstanding customs duty amount of Rs. 6,96,819/-, vis-a-vis the Sundry Creditors outstanding balance of Delta Global Resources Private Limited, and if the said amount is reflected under the head sundry creditors as claimed by the appellant, the addition shall stand deleted. I.T.A. No.51/Asr/2024 Assessment Year: 2017-18 6 12. As such this appeal is disposed off with the above direction and is allowed for statistical purpose. 13. In the result, the appeal of the assessee bearing ITA No. 51/Asr/2024 is allowed for statistical purposes. Order pronounced in the open court on 03.05.2024 Sd/- Sd/- (Dr. M. L. Meena) (UDAYAN DASGUPTA) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order