ACIT, Muzaffarnagar V. M/s. Bindlas Duplex Pvt. Ltd., Muzaffarnagar

ITA 5472/DEL/2011

• Counselvise Citation: 547220114 RSA 2011
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-10-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 07-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRITHI LAL
• Keywords: Business income; Depreciation; Business expenditure; Unabsorbed depreciation
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI G.D. AGRAWAL, HON BLE VICE - PRESIDENT & SHRI HARI OM MARATHA , HON BLE JUDICIAL MEMBER ITA NO. 5 4 72 /DEL/201 1 ASSESSMENT YEAR: 2009 - 10 ASSISTANT CI T, VS. M/S. BINDLAS DUPLEX PVT. LTD., CIRCLE - 1, BHOPA ROAD, MUZAFFARNAGAR. MUZAFFARNAGAR. (PAN: AA BCB2773R ) (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI PRITHI LAL, SR. DR ASSESSEE BY : SHRI AKARSH GARG, ADV. DATE OF HEARING: 2 3 .10.2012 DATE OF PRONOUNCEMENT OF ORDER: .10.2012 ORDER PER HARI OM MARATHA : JUDICIAL MEMBER TH IS APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2009 - 10 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) DATED 17 . 0 8 .20 1 1 . 2. T HE FACTS OF THIS CASE , IN NUT SHELL, ARE THAT THE ASSESSEE COMPANY DERIVES INCOME FROM MANUFACTURE AND SALE OF PAPERS AND PAPER BOARD. FOR THE YEAR 2009 - 10 , THE COMPANY DECLARED NIL INCOME IN THE RETURN OF INCOME FILED ON 25.9.2009. IN THIS CASE, A SURVEY UNDER SEC. 133A OF THE INCOME - TAX ACT, 1961 ( THE ACT IN SHORT ) WAS CONDUCTED DURING FINANCIAL YEAR 2009 - 10, DURING WHICH THE ASSESSEE COMPANY MADE A SUR RENDER OF AN AMOUNT OF RS.2 CRORES IN ADDITION TO BUSINESS INCOME. BUT THE AMOUNT SURRENDERED WAS 2 SHOWN IN THE RETURN OF INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AND SET OFF THE ENTIRE INCOME OF THE YEAR BEING RS. 5,61,94,848 INCLUDING AMOUNT OF R S. 2 CRORES SURRENDERED AT THE TIME OF THE SURVEY AGAINST BROUGHT FORWARD DEPRECIATION OF EARLIER YEARS. AS PER ASSESSING OFFICER UNDER SECTION 73 OF THE ACT, ONLY INCOME EARNED UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION COULD BE SET OFF AGAINST T HE BROUGHT FORWARD UNABSORBED DEPRECIATION AND NOT THE INCOME FROM OTHER SOURCES. THEREFORE, ASSESSING OFFICER WAS OF THE OPINION THAT AN AMOUNT OF RS. 2 CRORES AND FURTHER AMOUNT OF RS.6,20,741 BEING INTEREST INCOME WAS NOT ELIGIBLE FOR SET OFF AGAINST BR OUGHT FORWARD UNABSORBED DEPRECIATION OF EARLIER YEARS. ACCORDINGLY, HE DID NOT ALLOW THE SET OFF AND MADE THE RESULTANT ADDITION. IT WAS ALSO NOTICED BY THE ASSESSING OFFICER THAT AN AMOUNT OF RS.28,00,360 HAD BEEN DEBITED UNDER THE HEAD LOSS BY FIRE . T HE ASSESSING OFFICER DEMANDED DETAILS OF THIS LOSS ALLEGEDLY OCCURRED DUE TO FIRE AND ANY INSURANCE CLAIM HAVING RECEIVED, IF ANY. THE ASSESSEE FURNISHED COPY OF ACCOUNT OF LOSS BY FIRE AT RS.42,95,467 AGAINST WHICH INSURANCE CLAIM OF RS.14,95,107 WAS RECE IVED AND THE BALANCE AMOUNT OF RS.28,00,360 HAD BEEN DEBITED TO THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER DID NOT DISPUTE THE FACTUM OF LOSS BY FIRE BUT HE DISPUTED VALUATION OF LOSS BY FIRE AND DOCUMENTARY PROOF THEREOF. BEING NOT SATISFIED, THE ASSESSING OFFICER TREATED THE AMOUNT OF 3 RS.42,95,467 SO DEBITED AS EXCESSIVE AND, THEREFORE, DISALLOWED A LUMP SUM OF RS.10 LACS OUT OF TOTAL EXPENSES CLAIMED AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE WENT IN FIRST APPEAL B EFORE THE LEARNED CIT(APPEALS). LEARNED FIRST APPELLATE AUTHORITY HAS HELD THAT WHEN THE ASSESSEE HAS SURRENDERED A TOTAL AMOUNT OF RS. 2 CRORES WHICH COVERS LOSS BY FIRE, THEREFORE, THERE IS NO NEED TO MAKE ANY SEPARATE ADDITION OF RS.10 LACS. HE HAS DIRE CTED TO DELETE THIS AMOUNT. AGAINST THIS ORDER OF LEARNED CIT(APPEALS), THE REVENUE IS AGGRIEVED AND HAS RAISED SOLE GROUND IN ITS APPEAL AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.10,00,000 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LOSS BY FIRE WITHOUT APPRECIATING THE FULL FACTS OF THE CASE AS THE ASSESSEE NEITHER FURNISHED ANY DETAILS OF VALUATION OF LOSS BY FIRE NOR ANY DOCUMENTARY EVIDENCE . 3 . WE HAVE HEARD THE RIVAL SUBM ISSIONS AND HAVE CAREFULLY PERUSED THE RECORD. WE HAVE FOUND IT FOR CERTAIN THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE FACTUM OF LOSS BY FIRE. IT IS ALSO AN UNDENIAL FACT THAT THE ASSESSEE HAS MADE A SURRENDER OF RS. 2 CRORES WHICH ALSO COVERS THE LOS S BY FIRE. IT IS ALSO TRUE THAT AGAINST THE LOSS OF RS.42,95,467 A SUM OF RS.14,95,107 HAS BEEN RECEIVED FROM THE INSURANCE COMPANY AND THE BALANCE 4 AMOUNT OF RS.28,00,360 HAS BEEN DEBITED AS LOSS FROM FIRE TO THE PROFIT AND LOSS ACCOUNT AND THE SAME HAS BE EN CLAIMED AS BUSINESS EXPENDITURE. THE ASSESSING OFFICER HAS FOUND THIS LOSS TO BE EXCESSIVE. THIS FINDING OF ASSESSING OFFICER IS BASED ON SURMISES AND CONJECTURES. DURING SURVEY ON 10.09.2008, CONDUCTED IN THE PREMISES OF THE ASSESSEE, SURRENDER OF RS. 2 CRORES OVER AND ABOVE THE PROFIT/LOSS AS PER THE BOOKS OF INVESTMENT AND ANY IRREGULARITY THEREIN, THEREFORE, WE ARE ALSO OF THE SAME OPINION AS HAS BEEN TAKEN BY THE LEARNED CIT(APPEALS). WE HAVE SEEN THE PROFIT AND LOSS ACCOUNT ENCLOSED IN THE PAPER BO OK AND ALL OTHER RELEVANT DOCUMENTS AND HOLD THAT THERE IS NO FALLACY IN THE IMPUGNED FINDING OF THE LEARNED CIT(APPEALS). 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 31 . 10 . 2012 SD/ - SD/ - ( G.D. AGRAWAL ) ( HARI OM MARATHA ) VICE - PRESIDENT JUDICIAL MEMBER DATED: 31 / 1 0/2012 MOHAN LAL 5 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR