M/s. Asian Industries, Jammu V. The Income tax Officer, Jammu

ITA 588/ASR/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6989 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 24-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAAD KIDWAI
• Assessee Lawyers: P N ARORA
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.588(ASR)/2013 ASSESSMENT YEAR:2009-10 PAN :AANFA6667L M/S. ASIAN INDUSTRIES, VS. THE INCOME TAX OFFICER , KAINTHPUR, THANDIKHU, WARD-1(1), JAMMU. P.O. JAKH, VIJAYPUR, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.P.N.ARORA, ADV. RESPONDENT BY:SH. SAAD KIDWAI, DR DATE OF HEARING: 28/08/2014 DATE OF PRONOUNCEMENT:02/09/2014 ORDER PER B.P.JAIN, AM ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), JAMMU, DATED 10.07.203 FOR THE ASSESSMENT YEAR 200 9-10.THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE LD. CIT(A) ARE BOTH AGAINST THE FACTS OF THE CASE AND U NTENABLE IN LAW. ITA NO.588(ASR)/2013 2 2. THAT THE AO HAS GROSSLY ERRED IN MAKING DISALLOW ANCE OF RS.580387/- ON ACCOUNT OF PURCHASES, FREIGHT, POWER , FUEL, SALARY & WAGES AND OTHER EXPENSES. THE LD. CIT(APPE ALS) HAS ERRED IN SUSTAINING THE SAME. NO SPECIFIC REASON OR INSTANCE WAS POINTED OUT. AS SUCH THERE WAS NO REASON AND JUSTIF ICATION FOR SUSTAINING THIS ADDITION ESPECIALLY WHEN ALL THE EX PENSES ARE FULLY VOUCHED AND THEY WERE INCURRED DURING THE COU RSE OF BUSINESS. AS SUCH, THE ADDITION SUSTAINED BY THE LD . CIT(A) IS UNJUSTIFIED AND THE SAME MAY BE DELETED. ALTERNATIV ELY, THE DISALLOWANCE MADE BY AO IS VERY HIGH & EXCESSIVE. 3. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.2,50,000/- AND RS.3,32,580/- MADE BY THE AO ON A CCOUNT OF SO-CALLED BOGUS CREDITORS AND UNEXPLAINED LOANS. T HERE WAS NO REASON FOR SUSTAINING THE ADDITION ON ACCOUNT OF TH ESE CREDITS AND THE ADDITION OF RS.2,50,000/- AND RS.3,32,580/- SUSTAINED BY THE LD. CIT(A) IN THE NAME OF SH ASHOK SHARMA IS VERY OLD ONE AND THERE IS NO REASONS FOR MAKING THE ADDITION . AS SUCH, THE ADDITION CONFIRMED MAY BE DELETED AS THIS IS OL D GENUINE LOAN. SIMILARLY, THE ADDITION OF RS.3,32,580/- SHOU LD HAVE BEEN DELETED. 4. THAT THE LD. CIT(A) SHOULD HAVE ALLOWED THE DEDU CTION AS CLAIMED U/S 80IB OF THE ACT AT RS.20,81,705/- FOR W HICH THE ASSESSEE FULFILLED ALL THE CONDITIONS AND WAS CLEAR LY ENTITLED FOR DEDUCTION . NECESSARY EVIDENCE WAS DULY FILED BEFOR E THE AUTHORITIES BELOW WHO HAVE FAILED TO APPRECIATE ALL THESE FACTS AND SHOULD HAVE ALLOWED THE DEDUCTION AS CLAIMED U/ S 80IB OF THE ACT. THE AUTHORITIES BELOW DID NOT APPRECIATE T HAT DEDUCTION U/S 80IB OF THE ACT HAS ALWAYS BEEN ALLOWED IN THE PAST AS WELL AS IN THE SUBSEQUENT YEAR AND THERE WAS NO EARTHLY REASON AND OCCASION FOR THE AUTHORITIES BELOW TO DEPART FROM T HE SAME AS NO SPECIFIC REASON HAS BEEN BROUGHT ON RECORD BY T HE AUTHORITIES BELOW FOR DISALLOWING THE DEDUCTION AS CLAIMED BY THE ASSESSEE U/S 80IB OF THE ACT. THE DEDUCTION U/S 80IB AS CLAIMED MAY BE ALLOWED. 5. THAT THE AUTHORITIES BELOW DID NOT APPRECIATE A FTER ALLOWING DEDUCTION U/S 80IB , THERE WILL BE NO INCOME SUBJEC T TO TAX AND AS SUCH NO ADDITION IS CALLED FOR & SAME MAY BE DEL ETED. ITA NO.588(ASR)/2013 3 6. ANY OTHER GROUND OF APPEAL WHICH MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 2. GROUND NO.1 IS GENERAL IN NATURE AND THEREFORE, DID NOT REQUIRE ANY ADJUDICATION. 3. AS REGARDS GROUNDS NO. 2 & 3, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD CLAIMED FOLLOWING EXPENSES IN THE PROF IT & LOSS ACCOUNT: S.NO. PARTICULARS AMOUNT (RS.) 1. PURCHASES 4542550 2. FREIGHT 656904 3. POWER & FUEL 23698 4. SALARIES & WAGES 525190 5. OTHER EXPENSES 55543 THE AO DISALLOWED 15% OF THE SAID EXPENSES IN THE A BSENCE OF BOOKS OF ACCOUNT AND VOUCHERS VIDE PARA 3.1.2 OF THE ORDER A ND ALSO MADE SIMILAR ADDITION ON ACCOUNT OF SUNDRY CREDITORS AMOUNTING T O RS.3,32,580/- AND RS.4.90 LAKHS ON ACCOUNT OF UNSECURED LOANS IN THE ABSENCE OF ANY EXPLANATION TO THE SATISFACTION OF THE A.O. ITA NO.588(ASR)/2013 4 4. THE LD. CIT(A) DELETED THE ADDITION OF RS.2.40 L AKHS OUT OF INCOME ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS AMOUNTING TO RS.4.90 LAKHS AND CONFIRMED THE REST OF THE ADDITION MADE BY THE A.O . 5. THE LD. COUNSEL FOR THE ASSESSEE, MR. P.N.ARORA, ADVOCATE ARGUED THAT NO ADDITION CAN BE MADE WITHOUT INVOKING THE P ROVISIONS OF SECTION 145(3) OF THE ACT AND ADDITION IF SO MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS LIABLE TO BE DELETED. ACCORDINGLY, HE PRAYED TO DIRECT THE DELETION OF THE ADDITION. 5.1. HE FURTHER ARGUED THAT LOAN OF RS.2,50,000/- IS LOAN PERTAINING TO THE PRECEDING YEAR AND NO PART OF THE LOAN HAS BEEN RAI SED DURING THE YEAR UNDER CONSIDERATION. THEREFORE, NO ADDITION ON THIS ACCOU NT CAN BE MADE. HE FURTHER ARGUED THAT ONCE THE BOOKS OF ACCOUNT HAVE NOT BEEN REJECTED, NO ADDITION ON ACCOUNT OF CREDITORS OR EXPENDITURE CA N BE MADE. 6. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF BOTH THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE A.O. AS WE LL AS THE LD. CIT(A) HAS NOT INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT . THEREFORE, NO ADDITION ON ACCOUNT OF CREDITORS AND EXPENSES CAN BE MADE AN D ADDITION SO MADE IS DIRECTED TO BE DELETED. AS REGARDS THE UNSECURED L OANS OF RS.2,50,000/-, THE ITA NO.588(ASR)/2013 5 SAME ARE LOANS PERTAINING TO THE PRECEDING YEAR AN D NO PART OF THE SAME HAS BEEN RAISED DURING THE YEAR, THEREFORE, THE LD. CIT (A) IS NOT JUSTIFIED IN SUSTAINING THE SAME AND THE SAME ARE DIRECTED TO B E DELETED. 8. AS REGARDS GROUND NO.4, THE BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED DEDUCTION U/S 80-IB OF THE ACT AMOUNTING TO RS.20,1 8,705/-. THE LD. CIT(A) DISALLOWED THE SAME BY OBSERVING THAT THE ASSESSEE IS NOT QUALIFIED FOR DEDUCTION VIDE PARA 4.5 OF HIS ORDER. 8.1. THE LD. CIT(A) CONFIRMED THE ACTION OF THE A.O . AND CONSIDERING THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT A COPY OF FORM 10CCB AND COPY OF DIC CERTIFICATE WAS SUBMITTED TO THE AO BU T THE LD. CIT(A) OBSERVED THAT ALL THE CONDITIONS LAID DOWN U/S 80IB OF THE ACT ARE NOT FULFILLED AND MERELY FILING OF FORM 10CCB AND DIC CERTIFICATE DOES NOT ESTABLISH THE CLAIM OF DEDUCTION U/S 80IB OF THE AC T. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ONUS IS ON THE ASSESSEE TO FILE FORM 10CCB. IT IS A CERTIFICATE DULY CERTIFIED BY THE CA AND WHICH HAS BEEN SUBMITTED AL ONGWITH THE RETURN OF INCOME, IS NOT UNDER DISPUTE . THE DIC CERTIFICATE WAS ALSO SUBMITTED TO THE AO. THESE FACTS ARE NOT IN DISPUTE BEFORE THE AO A ND AS WELL AS BEFORE THE LD. CIT(A). NONE OF THE AUTHORITIES BELOW HAVE PLAC ED ON RECORD, WHICH CONDITION LAID DOWN U/S 80IB HAS NOT BEEN FULFILLED BY THE ASSESSEE. FURTHER, ITA NO.588(ASR)/2013 6 THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED WRI TTEN SUBMISSIONS STATING THAT THE ASSESSEE HAS BEEN ALLOWED DEDUCTION U/S 80 IB OF THE ACT UNDER THE SAME CONDITIONS AS IN THE PRECEDING YEAR AND THERE WAS NO CHANGE IN THE FACTS & CIRCUMSTANCES IN THE PRECEDING YEAR. IT WAS ALSO POINTED OUT THAT FOR THE ASSESSMENT YEAR 2010-11, ASSESSMENT ORDER DATED 22.2.2013 WHICH HAS BEEN PLACED ON RECORD FROM PAGES 74 AND ONWARDS WHE RE THE AO HIMSELF HAS MENTIONED WITH REGARD TO CLAIM OF DEDUCTION UNDER S ECTION 80IB BEING THE 5 TH YEAR OF THE BUSINESS OF THE ASSESSEE AND CLAIM OF DEDUCTION @ 100% UNDER SECTION 80IB WAS ALLOWED. IN THE FACTS AND CI RCUMSTANCES AND FOLLOWING THE DOCTRINE OF CONSISTENCY, THE LD. CIT( A) IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE A.O U/S 80IB OF THE AC T. IT WAS FURTHER ARGUED AND EVEN IF THE ADDITION IS SUSTAINED THAT WILL INCREASE THE INCOME OF THE ASSESSEE, WHICH IS ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION O F THE ITAT, AMRITSAR BENCH, IN THE CASE OF SMT. HARBHAJAN KAUR IN ITA NO .331(ASR)/2013 FOR THE ASSESSMENT YEAR 2009-10 ORDER DATED 06.12.2013, WHI CH IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN TH E FACTS AND CIRCUMSTANCES OF THE CASE, WITHOUT POINTING OUT ANY DEFECT IN THE CO NDITIONS LAID DOWN U/S 80IB OF THE ACT, THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE A.O. INSPITE OF THE FACT THAT THE ONUS HAS BEEN DISCHARGED BY THE ASSESSEE. ITA NO.588(ASR)/2013 7 ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS REVERSE D AND THE A.O. IS DIRECTED TO DELETE THE ADDITION SO MADE AND CONFIRMED BY TH E LD. CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.588(ASR)/2013 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2ND SEPTEMBER, 2014. SD/- SD/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2ND SEPTEMBER, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. ASIAN INDUSTRIES, JAMMU. 2. THE ITO WARD 1(1), JAMMU. 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR