Sanjay Danchand Ghodawat(HUF), Kolhapur V. Assistant Commissioner of Income-tax,

ITA 602/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7220 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-09-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 28-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Assessee Lawyers: R G NAHAR
• Keywords: Business expenditure; Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.602/PUN/2014 [ [ / ASSESSMENT YEAR : 2010-11 SANJAY DANCHAND GHODAWAT (HUF), SUSHREYA, YASHWANT HOUSING SOCIETY, JAYSINGPUR, TAL. SHIROL, KOLHAPUR. PAN : AAEHS6340B. . / APPELLANT V/S ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . / RESPONDENT ASSESSEE BY : SHRI R.G. NAHAR. REVENUE BY : SHRI DR. VIVEK AGGARWAL. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A), KOLHAPUR DT.30.12.2013 FOR THE ASSESSMENT YEAR 2010-11. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER:- ASSESSEE IS AN HUF AND IS STATED TO BE ENGAGED IN THE BUSINESS OF CONSTRUCTION AND POWER GENERATION BY USING WINDMILLS. / DATE OF HEARING : 18.09.2017 / DATE OF PRONOUNCEMENT: 31.10.2017 2 ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2010-11 ON 13.10.2010 DECLARING TOTAL INCOME OF RS.1,39,06,980/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.17.12.2012 AND THE TOTAL INCOME WAS DETERMINED AT RS.1,72,96,640/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.30.12.2013 (IN APPEAL NO.KOP/281/12-13) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A) ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. THE LEARNED CIT (APPEALS) HAS ERRED IN FACTS AND CIRCUMSTANCES OF CASE AND IN LAW IN CONFIRMING AN ADDITION OF RS 10,00,000/- ON ACCOUNT OF SUBSIDY REFUNDED TO MEDA DURING FINANCIAL YEAR 2009-10 DEBITED TO PROFIT AND LOSS ACCOUNT , ON A REASONING THAT THE CLAIM FOR A REFUND HAS TO BE MADE FOR THE SAME FINANCIAL YEAR IN WHICH THE SAID SUBSIDY WAS CREDITED TO PROFIT AND LOSS ACCOUNT I.E F Y 2005-06. THE ADDITION SO MADE MAY KINDLY BE DELETED . 2. THE LEARNED CIT (APPEALS) HAS ERRED IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN CONFIRMING AN ADDITION OF RS 3,21,097/- PRIOR PERIOD EXPENSES . THE SAID EXPENSES ARE ON ACCOUNT OF SERVICE TAX AND INTEREST ON LATE PAYMENT OF SERVICE TAX PAID ON THE BASIS OF DEMAND NOTICES RECEIVED FROM SERVICE TAX DEPARTMENT DURING F Y 2009-10. THE ADDITION SO MADE MAY KINDLY BE DELETED. 3. THE LEARNED CIT (APPEALS) HAS ERRED IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN CONFIRMING AN ADDITION OF RS 20,68,563/- BEING MISMATCH ON ACCOUNT OF INCOME AS PER FORM 26 AS AND INCOME DECLARED IN OUR RETURN OF INCOME. AS PER THE RECONCILIATION STATEMENT SUBMITTED, THERE IS NO MISMATCH BETWEEN THE INCOME AS PER FORM 26 AS AND INCOME DECLARED IN OUR RETURN OF INCOME. THE ADDITION SO MADE MAY KINDLY BE DELETED. 3. FIRST GROUND IS WITH RESPECT TO ADDITION OF CAPITAL SUBSIDY REFUNDED OF RS.10 LAKHS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO ON PERUSING THE DETAILS NOTICED THAT MAHARASHTRA ENERGY DEVELOPMENT AGENCY (MEDA) HAD REFUNDED CAPITAL SUBSIDY OF RS.10,00,000/- , AND IT WAS 3 DEBITED TO THE PROFIT AND LOSS ACCOUNT BY THE ASSESSEE TO ITS WIND POWER DIVISION. THE ASSESSEE WAS ASKED TO JUSTIFY THE CLAIM TO WHICH ASSESSEE SUBMITTED THAT MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LTD HAD RECOVERED THE SUBSIDY OF RS 10 LACS AS PER THE MERC ORDER. THE SUBMISSION OF ASSESSEE WAS NOT FOUND ACCEPTABLE TO AO AS HE WAS OF THE VIEW THAT CAPITAL SUBSIDY DEBITED TO THE PROFIT AND LOSS ACCOUNT WAS CAPITAL IN NATURE AND THEREFORE WAS NOT ALLOWABLE. HE ACCORDINGLY DISALLOWED THE SAME. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO BY HOLDING AS UNDER : 3. THE APPELLANT'S BUSINESS INCLUDES WIND POWER DIVISION. A SUM OF RS.10 LAKHS BEING CAPITAL SUBSIDY RECEIVED FROM MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LTD. (MSEDCL) WAS DEBITED TO PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER HAS NOTED THAT CAPITAL EXPENDITURE IS INADMISSIBLE AND CANNOT BE DEBITED TO PROFIT AND LOSS ACCOUNT. THE ASSESSEE WAS ASKED REASON FOR THE SAME. IT WAS REPLIED THAT AS PER LETTER DATED 08/10/2009 FROM MSEDCL AN AMOUNT OF RS.10 LAKHS WAS RECOVERED AS PER MERC ORDER AND INSTRUCTIONS. HOWEVER, SINCE THE CAPITAL EXPENDITURES ARE NOT ALLOWED, THE AMOUNT WAS DISALLOWED BY THE ASSESSING OFFICER. 4. DURING THE APPELLATE PROCEEDINGS, FURTHER FACTS WERE INFORMED THAT APPELLANT HAD RECEIVED SUBSIDY OF RS.20 LAKHS DURING FINANCIAL YEAR 2005-06 AND THIS AMOUNT WAS CREDITED TO PROFIT AND LOSS ACCOUNT. THEREFORE, THE REFUND OF SUBSIDY SHOULD BE ALLOWED. HOWEVER, IN MY OPINION, THE APPELLANT HAS NOT REALIZED THAT IN CASE THE APPELLANT HAS CREDITED THE AMOUNT IN FINANCIAL YEAR 2005-06, ANY CLAIM FOR REFUND OR SUBSIDY HAS TO BE MADE FOR THE SAME FINANCIAL YEAR WHICH RELATES TO ASSESSMENT YEAR 2006-07. THEREFORE, THE GROUND TAKEN BY THE APPELLANT IS REJECTED AND THE DISALLOWANCE IS SUSTAINED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 4. BEFORE US LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES AND FURTHER SUBMITTED THAT ASSESSEE IS ALSO ENGAGED IN THE BUSINESS OF POWER GENERATION USING WIND MILLS APART 4 FROM OTHER BUSINESSES. DURING THE YEAR, ASSESSEE HAD FOUR WINDMILLS AND OUT OF WHICH WINDMILL BEARING METERING POINT NO.1047 AND 4033 WERE INSTALLED AND COMMISSIONED IN THE YEAR 2000. FOR THESE TWO WINDMILLS SUBSIDY OF RS.20 LAKHS WAS RECEIVED IN F.Y. 2005-06 RELEVANT TO A.Y. 2006-07 FROM THE GOVERNMENT OF MAHARASHTRA THROUGH MEDA AS PER THE POLICY DECISION OF GOVERNMENT OF MAHARASHTRA. HE SUBMITTED THAT THE RS.20 LAKHS SUBSIDY RECEIVED WAS CREDITED TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2006 AND OFFERED TO TAX IN A.Y. 2006-07. HE FURTHER SUBMITTED THAT MAHARASHTRA STATE ELECTRICITY BOARD (MESB) APPROACHED MAHARASHTRA ELECTRICITY REGULATORY COMMISSION (MERC) SEEKING APPROVAL OF ENERGY PURCHASE FROM WIND/SOLAR POWER PROJECTS IN LINE WITH THEIR POLICY. AS PER THE RECOMMENDATION OF MERC, MAHARASHTRA STATE BOARD COUNCIL DISTRIBUTION COMPANY LIMITED (MSEDCL) DEMANDED 50% SUBSIDY REFUND AND IN SOME CASES DIRECTLY DEDUCTED THE AMOUNT FROM THE CREDIT NOTES FOR THE POWER SUPPLIED BY THE DEVELOPER. IN THE CASE OF ASSESSEE, RS.10 LAKHS WAS RECOVERED BY MSEDCL AND THE ASSESSEE CAME TO KNOW ABOUT THE RECOVERY FOR THE FIRST TIME ON RECEIPT OF LETTER OF MSEDCL DT.19.10.2009. HE THEREFORE SUBMITTED THAT THE AMOUNT GOT CRYSTALLIZED IN THE YEAR UNDER CONSIDERATION AND THEREFORE THE SAME WAS RIGHTLY CLAIMED AS EXPENDITURE IN THE YEAR UNDER CONSIDERATION. HE POINTED TO THE COPIES OF THE LETTERS OF MSEDCL PLACED IN PAPER BOOK. HE THEREFORE SUBMITTED THAT THE EXPENDITURE BE ALLOWED AS IT CRYSTALLIZED DURING THE YEAR. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO AND LD.CIT(A). 5 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE RECOVERY OF RS.10 LAKHS MADE BY MSEDCL WHICH IS CLAIMED BY THE ASSESSEE AS EXPENDITURE. IT IS AN UNDISPUTED FACT THAT THE AMOUNT OF RS.20 LAKHS WHICH WAS RECEIVED AS SUBSIDY IN THE YEAR 2006 WAS CREDITED TO THE PROFIT AND LOSS ACCOUNT IN THAT YEAR AND WAS ALSO OFFERED TO TAX AND WAS ACCEPTED BY THE REVENUE. DURING THE YEAR UNDER CONSIDERATION, THE AMOUNT OF RS.10 LAKHS WAS DEDUCTED OUT OF THE PORTION OF CAPITAL SUBSIDY RECEIVED IN EARLIER YEAR (COPY OF THE LETTER DT.08.10.2009 WHICH IS PLACED AT PAGE 12 OF THE PAPER BOOK). THE AMOUNT OF RECEIPT OF SUBSIDY OF RS 20 LAKHS BEING OFFERED TO TAX IN THE YEAR OF ITS RECEIPT IS NOT IN DISPUTE. FURTHER THE ASSESSEES CONTENTION THAT THE RECOVERY WAS MADE DURING THE YEAR IS ALSO NOT FOUND TO BE UNTRUE. IN SUCH CIRCUMSTANCES WE ARE OF THE VIEW THAT WHEN THE AMOUNT OF SUBSIDY RECEIVED WAS TREATED AS REVENUE RECEIPT BY THE REVENUE IN EARLIER YEARS AND WHEN A PART OF THE SAME WAS RECOVERED FROM THE ASSESSEE IN THE YEAR UNDER CONSIDERATION, THE LIABILITY GOT CRYSTALLIZED DURING THE YEAR AND THEREFORE THE AMOUNT OF RS 10 LAKHS IS ALLOWABLE AS DEDUCTION DURING THE YEAR MORE SO WHEN THERE IS NOTHING ON RECORD TO SHOW THAT THE NOTICE FOR RECOVERY OF CAPITAL SUBSIDY WAS NOT RECEIVED DURING THE YEAR. WE THEREFORE DIRECT THE AO TO GRANT DEDUCTION OF RS.10 LACS. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED. 6. SECOND GROUND IS WITH RESPECT TO ADDITION ON ACCOUNT OF PRIOR PERIOD EXPENSES AT RS.3,21,097/- 6 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO ON PERUSING THE DETAILS OF EXPENSES SUBMITTED BY THE ASSESSEE NOTICED THAT UNDER THE HEAD ADMINISTRATIVE AND OTHER EXPENSES ASSESSEE HAD DEBITED AGGREGATE SUM OF RS.3,21,097/- WHICH COMPRISED OF RS.1,86,194/- ON ACCOUNT OF INTEREST AND LATE PAYMENT OF SERVICE TAX COMPRISING OF FOR 2008-09, RS.39,609/- FOR A.Y. 2009-10 AND RS.95,294/- ON ACCOUNT OF SERVICE TAX PURSUANT TO SHOW CAUSE NOTICE. HE WAS OF THE VIEW THAT THE EXPENSES PERTAINED TO EARLIER YEARS IT WAS NOT ALLOWABLE. HE WAS FURTHER OF THE VIEW THAT SINCE PENALTY OR FINE DEBITED TO THE PROFIT AND LOSS ACCOUNT WAS INADMISSIBLE, THE AFORESAID AMOUNTS COULD ALSO NOT BE ALLOWED AS DEDUCTION. HE ACCORDINGLY DISALLOWED RS 3,21,097/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO BY HOLDING AS UNDER : 5. ADMINISTRATIVE AND OTHER EXPENSES DEBITED BY THE APPELLANT INCLUDE INTEREST AND LATE PAYMENT OF SERVICE TAX FOR 2008-09 - RS. 1,86,194, INTEREST AND LATE PAYMENT SERVICE TAX FOR 2009-10 - RS. 39,609 AND SERVICE TAX SHOW CAUSE DEMAND PAID - RS. 95,294/- TOTALING TO RS. 3,21,097/-. THESE EXPENSES WERE PRIOR PERIOD EXPENSES AND THESE ARE INADMISSIBLE, STILL THE APPELLANT DEBITED THESE IN THE NET PROFIT IN THE COMPUTATION OF TOTAL INCOME. ALSO, ANY PENALTY OR FIND ARE NOT ALLOWABLE EXPENSES. DUE TO THIS REASON THE EXPENSES WERE DISALLOWED BY THE ASSESSING OFFICER. 6. THE APPELLANT HAS PLEADED BEFORE THE UNDERSIGNED THAT ONLY THE AMOUNT OF RS.95,294/- IS ON ACCOUNT OF PENALTY AND OTHER EXPENSES ARE INTEREST PAYMENT FOR LATE SERVICE TAX PAYMENT, THEREFORE, THIS SHOULD BE ALLOWED. HOWEVER, NO DOCUMENTS WERE FURNISHED IN SUPPORT OF THIS CLAIM. MOREOVER, RS.1,86,194/- RELATED TO FINANCIAL YEAR 2008-09 RELEVANT TO THE ASSESSMENT YEAR 2009-10. THEREFORE, IT CANNOT BE ALLOWED IN ASSESSMENT YEAR 2010-11. THE CLAIM IS ALLOWED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 7 7. BEFORE US LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES AND FURTHER SUBMITTED THAT INTEREST ON DELAY IN PAYMENT OF SERVICE TAX UNDER SERVICE TAX RULES IS FROM THE DUE DATE OF PAYMENT OF TAX UPTO THE DATE OF ACTUAL PAYMENT OF TAX. HE SUBMITTED THAT THE ASSESSEE HAD PAID TAX FOR ALL THE FOUR QUARTERS OF THE YEAR 2008-09 ON 20.05.2009 INSTEAD OF RESPECTIVE DUE DATES AND AS SUCH THE INTEREST OF RS.1,82,194/- PAID ON 20.05.2009 WAS NOT FROM PRIOR PERIOD EXPENSES BUT WAS FOR THE YEAR. HE FURTHER SUBMITTED THAT INTEREST ON DELAYED PAYMENT OF SERVICE TAX IS COMPENSATORY IN NATURE AND THEREFORE AN ALLOWABLE DEDUCTION. AS FAR AS THE BALANCE AMOUNT OF RS.4,000/- IS CONCERNED, HE SUBMITTED THAT IT WAS A CHARGE FOR LATE FILING OF SERVICE TAX RETURN FOR TWO HALF YEARS OF F.Y. 2008-09. HE SUBMITTED THAT LATE FILING CHARGES WAS NOT PENALTY AND WAS LIKE A FEE CHARGED FOR LATE FILING OF TDS RETURNS UNDER THE INCOME TAX ACT, 1961. 8. WITH RESPECT TO INTEREST OF RS.39,609/- PAID FOR 2009-10, HE SUBMITTED THAT IT COMPRISES OF RS.2,529/- WHICH WAS ON ACCOUNT OF INTEREST FOR LATE PAYMENT OF SERVICE TAX FOR 1 ST QUARTER OF 2009-10 WHICH WAS PAID ON 11.8.2009. WITH RESPECT TO RS.27,080/- HE SUBMITTED THAT IT WAS ON ACCOUNT OF INTEREST PAYMENT FOR 4 TH QUARTER OF 2008-09 WHICH WAS PAID ON 20.5.2009. I.E., PAYMENTS FOR EARLIER YEARS SERVICE TAX DUES. HE SUBMITTED THAT INTEREST ON SERVICE TAX WAS COMPENSATORY IN NATURE AND THEREFORE ALLOWABLE. 9. WITH RESPECT TO THE AMOUNT OF RS.95,294/-, HE SUBMITTED THAT IT WAS ON ACCOUNT OF SERVICE TAX ON IPR SERVICE AND RENT A CAB 8 SERVICE FOR F.YS. 2004-05 TO 2007-08. THE AFORESAID DEMAND WERE RAISED DUE TO THE ORDER OF COMMISSIONER, CENTRAL EXCISE, KOLHAPUR PASSED ON 06.01.2010 AND SINCE THE ORDER WAS RECEIVED DURING THE YEAR, THE LIABILITY GOT CRYSTALLIZED DURING THE YEAR. HE SUBMITTED THAT THE AMOUNT OF RS.9,000/- WAS PAID ON ACCOUNT OF PENALTY U/S 77 OF THE CENTRAL EXCISE ACT FOR SERVICE TAX. HE FAIRLY CONCEDED THAT THIS AMOUNT OF PENALTY CANNOT BE ALLOWED. HE ALSO POINTED TO THE COPY OF CHALLANS AND ORDER OF SERVICE TAX AUTHORITIES WHICH ARE PLACED IN PAPER BOOK. HE THEREFORE SUBMITTED THAT EXCEPT FOR THE AMOUNT OF RS.9,000/- WHICH IS ON ACCOUNT OF PENALTY, REST OF THE EXPENDITURE NEEDS TO BE ALLOWED. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO AND LD.CIT(A). HE FURTHER SUBMITTED THAT LD.CIT(A) HAS NOTED THAT NO DETAILS WERE FURNISHED BY THE ASSESSEE BEFORE HIM AND THEREFORE ALSO HE CONFIRMED THE DISALLOWANCE. LD.A.R. IN THE REJOINDER SUBMITTED THAT ASSESSEE COULD NOT SUBMIT THE DETAILS BEFORE CIT(A) BUT IF THE MATTER IS REMITTED BACK THE ASSESSEE WOULD FURNISH THE REQUIRED DETAILS. HE THEREFORE SUBMITTED THAT IN THE ALTERNATIVE THE MATTER MAY BE SENT BACK TO THE FILE OF AO FOR HIS VERIFICATION. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE PAYMENTS MADE ON ACCOUNT OF SERVICE TAX AND INTEREST ON SERVICE TAX DUES. IT IS UNDISPUTED FACT THAT THE LIABILITY OF PAYMENT OF SERVICE TAX HAS ARISEN DURING THE COURSE OF BUSINESS AND IT IS NOT IN DISPUTE THAT THE LIABILITY OF SERVICE TAX WAS EXPENDED BY THE ASSESSEE DURING THE COURSE OF BUSINESS, WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF 9 BUSINESS. IT IS ALSO A FACT THAT THE PAYMENT OF SERVICE TAX MADE DURING THE YEAR BY THE ASSESSEE INCLUDES THE INTEREST ON SERVICE TAX. WE FIND THAT HBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS KAYPEE MECHANICAL INDIA (P.) LTD [2014] 45 TAXMANN.COM 363 (GUJARAT) AFTER RELYING ON THE DECISION OF HBLE APEX COURT IN THE CASE OF CIT V. LUXMI DEVI SUGAR MILLS (P.) LTD. [1991] 188 ITR 41 AND THE DECISION IN CASE OF MAHALAKSHMI SUGAR MILLS CO. V. CIT [1980] 123 ITR 429 (SC) HAS HELD THAT THE PAYMENT OF INTEREST UNDER THE SERVICE TAX IS COMPENSATORY IN NATURE AND WOULD NOT PARTAKE THE CHARACTER OF PENALTY. IT FURTHER HELD THAT WHEN ASSESSEE HAD NOT COLLECTED AND DEPOSITED SERVICE TAX BUT ON BEING POINTED OUT, DEPOSITED SAME, AMOUNT BEING EXPENDED BY ASSESSEE IN COURSE OF BUSINESS WAS ALLOWABLE AS BUSINESS EXPENDITURE. BEFORE US, WITH RESPECT TO RS.9,000/- PAID AS PENALTY, LD.A.R. FAIRLY CONCEDED THAT IS NOT ALLOWABLE AS IT IS PENAL IN NATURE. WE ACCORDINGLY HOLD THAT NO INTERFERENCE TO THE ORDER OF LD.CIT(A) TO THE EXTENT OF DISALLOWANCE OF RS.9,000/- IS CALLED FOR. WE FIND THAT LD.CIT(A) WHILE UPHOLDING THE ORDER OF AO HAS NOTED THAT THE REQUIRED DETAILS WERE NOT FURNISHED BY THE ASSESSEE BEFORE HIM. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THAT THE PAYMENT IS TOWARDS SERVICE TAX INTEREST DUES AND THE SAME BEING ALLOWABLE AND IN VIEW OF THE SUBMISSION OF LD AR THAT THE ASSESSEE WILL PRODUCE THE REQUIRED DETAILS BEFORE AO, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE THE ASSESSEE BE GRANTED ONE MORE OPPORTUNITY. WE THEREFORE RESTORE THE ISSUE TO THE FILE OF AO FOR RE-EXAMINATION AND DECIDE THE ISSUE IN VIEW OF OUR FOREGOING OBSERVATIONS AND IN ACCORDANCE WITH LAW. NEEDLESS TO STATE THAT AO SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 10 ASSESSEE IS ALSO DIRECTED TO PROMPTLY FURNISH ALL THE DETAILS, AS CALLED FOR BY AO. IN CASE ASSESSEE FAILS TO FURNISH THE REQUIRED DETAILS, AO SHALL BE FREE TO PROCEED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. WITH THESE DIRECTIONS, WE RESTORE THE ISSUE TO THE FILE OF AO. THUS, THE GROUND OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 11. THIRD GROUND IS WITH RESPECT TO ADDITION OF RS.20,68,563/- ON ACCOUNT OF MIS-MATCH OF TDS AMOUNTS AS PER RETURN OF INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AS PER THE DETAILS OF TDS FILED BY THE ASSESSEE, IT WAS NOTICED BY THE AO THAT ASSESSEE HAD RECEIVED A SUM OF RS.2,12,99,516/- AS INCOME. THE ASSESSEE WAS ASKED TO RECONCILE IT WITH THE INCOME REFLECTED IN THE PROFIT AND LOSS ACCOUNT. ON PERUSAL OF THE RECONCILIATION STATEMENT, AO NOTICED THAT THE AMOUNT AGGREGATING TO RS.20,68,563/- ( WHICH ARE DETAILED AT PAGE 3 OF THE ASSESSMENT ORDER) WAS NOT CONSIDERED BY THE ASSESSEE IN ITS TOTAL INCOME. AO ACCORDINGLY MADE THE ADDITION OF THE DIFFERENCE OF THE AMOUNT OF INCOME AS PER TDS CERTIFICATES AND THE INCOME REFLECTED BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT AMOUNTING TO RS.20,68,563/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER : 7. THE ASSESSING OFFICER HAS DISALLOWED AN AMOUNT OF RS. 20,68,563/- DUE TO THE REASON THAT THE DETAILS FILED IN THE TDS RETURN DID NOT MATCH WITH THE TDS RECONCILIATION FILED BY THE ASSESSEE. THE INCOME AS PER TDS DETAILS FILED WITH THE RETURN WAS IN EXCESS OF THE INCOME AS PER TDS RECONCILIATION BY RS.20,68,563/-. THERE ARE FOUR AMOUNTS INCLUDED IN, THIS FIGURE WHICH RELATED TO FOUR PARTIES VIZ. GHODAWAT ENERGY LTD., STAR MULTI OIL PACKERS, STARLINE TEXTILE AND M/S GHODAWAT PAN MASALA PRODUCTS INDIA PVT. LTD. A RECONCILIATION 11 STATEMENT HAS BEEN PREPARED AND FURNISHED BEFORE THE UNDERSIGNED. AS PER THIS RECONCILIATION STATEMENT, THE APPELLANT HAS RECEIVED TWO AMOUNTS OF RS.1,36,000/ - AND RS.1,30,031/- FROM M/S GHODAWAT PAN MASALA PRODUCTS INDIA PVT. LTD. THE ASSESSING OFFICER HAS TAKEN THE AMOUNT OF RS. 1,36,000/- ONLY TO COMPARE THE DIFFERENCE. HE IS DIRECTED TO CONSIDER RS. 1,30,031/- ALSO DUE TO WHICH THE DISALLOWANCE WILL INCREASE BY THIS AMOUNT. REGARDING STARLINE MULTI OIL PACKERS AS PER THE STATEMENT FILED BY THE APPELLANT, THERE WAS A RECEIPT OF RS.66,180/- WHICH INCLUDED RS.60,000/- AS ROYALTY INCOME AND RS.6,180/ - TDS ON THE SAME. THE ASSESSING OFFICER HAS TAKEN ONLY RS.60,000/- WHICH IS THE AMOUNT RECEIVED BY APPELLANT NOT OF TDS. THEREFORE, THE DIFFERENCE IS EXPLAINED AND THE ASSESSING OFFICER WILL REDUCE DIFFERENCE OF RS.6,180/- WHICH WAS TDS AMOUNT. THE OTHER TWO CONCERNS VIZ. GHODAWAT ENERGY LTD. AND STARLINE TEXTILE MENTIONED IN THE ASSESSMENT ORDER HAVE NOT BEEN INCLUDED IN THE RECONCILIATION STATEMENT FILED BY THE APPELLANT. THEREFORE, THE AMOUNT RELATING TO THESE CONCERNS REMAIN UNEXPLAINED AND, THEREFORE, THE ADDITION TO THIS EXTENT IS SUSTAINED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 12. BEFORE US, LD.A.R. POINTED TO THE RECONCILIATION STATEMENT OF 26AS WITH THE BOOKS AND THE INCOME TAX RETURNS (COPIES OF INCOME TAX RETURNS ARE PLACED AT PAPER BOOK) FROM THE RECONCILIATION STATEMENT HE SUBMITTED THAT THE ASSESSEE HAS RECONCILED THE INCOME AND IF IT WAS GIVEN A CHANCE, IT WOULD BE IN A POSITION TO SATISFY THE AO WITHOUT THE RECONCILIATION. HE THEREFORE SUBMITTED THAT THE MATTER MAY BE REMANDED BACK TO THE FILE OF AO FOR VERIFICATION. LD.D.R. DID NOT SERIOUSLY OBJECT TO THE REQUEST FOR REMANDING THE MATTER TO THE FILE OF AO. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE ADDITION ON AMOUNT OF DIFFERENCE BETWEEN THE INCOME SHOWN IN FORM NO.26AS AND THE RETURN OF INCOME. BEFORE US, ASSESSEE HAS FURNISHED DETAILED RECONCILIATION OF 26AS WITH THE BOOKS AND THE 12 ITRS AND HE HAS TRIED TO EXPLAIN THE SAME. WE ARE OF THE VIEW THAT THE RECONCILIATION STATEMENT FURNISHED BY THE ASSESSEE NEEDS TO BE RE-EXAMINED AT THE END OF THE AO. WE THEREFORE, IN THE INTERESTS OF JUSTICE, REMAND THE ISSUE TO THE FILE OF AO TO VERIFY THE RECONCILIATION STATEMENT FILED BY THE ASSESSEE AND IF THE ASSESSEE IS IN A POSITION TO RECONCILE THE AMOUNTS AS PER 26AS AND THE RETURN OF INCOME, NO ADDITION AS MADE BY THE AO AND CONFIRMED BY LD CIT(A), IS CALLED FOR. WE THEREFORE RESTORE THE ISSUE TO THE FILE OF AO. NEEDLESS TO STATE THAT AO SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH AO BY PROMPTLY FURNISHING ALL THE REQUIRED DOCUMENTS CALLED FOR BY THE AO. WITH THESE DIRECTIONS, WE RESTORE THE ISSUE TO THE FILE OF AO. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 31 ST DAY OF OCTOBER, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 31 ST OCTOBER, 2017. YAMINI 13 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT(A)- KOLHAPUR. CIT-I/II, KOLHAPUR / CIT(CENTRAL), PUNE. , , / DR, ITAT, B PUNE; [ / GUARD FILE. / BY ORDER // // TRUE COPY // // / SR. PRIVATE SECRETARY , / ITAT, PUNE.