The ACIT, 3(1), V. M/s Sunegra Foods Pvt. Ltd.,

ITA 632/IND/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2388 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-12-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 07-11-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: ANIL KHAA
• Keywords: TDS

Judgement Text

PAGE 1 OF 7 I.T.A.NO. 632/IND/2007 & C.O.133/IND/2 007 M/S.SUNEGRA FOODS PRIVATE LIMITED, BHOPAL IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : N.A. I.T.A.NO.632/IND/2007 A.Y. : 2004-05 ACIT, M/S.SUNEGRA FOODS (P) LIMITED, 3(1), VS E-5/1, AJAY TOWER, BHOPAL ARERA COLONY, BHOPAL. APPELLANT RESPONDENT C.O.NO.133/IND/2007 A.Y. : 2004-05 M/S.SUNEGRA FOODS (P) LIMITED, ACIT, E-5/1, AJAY TOWER, VS 3(1), ARERA COLONY, BHOPAL. BHOPAL CROSS OBJECTOR RESPONDENT APPELLANT BY : SMT.APARNA KARAN, SR. DR RESPONDENT BY : SHRI ANIL KHABYA, C. A. DATE OF HEARING : 07/12/2009 O R D E R PER V.K. GUPTA, A.M. THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO N FILED BY THE ASSESSEE ARISE OUT OF THE ORDER OF THE LD. CIT(A)-I I, BHOPAL, DATED 16.8.2007 FOR THE ASSESSMENT YEAR 2004-05. PAGE 2 OF 7 I.T.A.NO. 632/IND/2007 & C.O.133/IND/2 007 M/S.SUNEGRA FOODS PRIVATE LIMITED, BHOPAL 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. FIRST, WE SHALL TAKE UP THE REVENUES APPEAL IN I.T .A.NO. 632/IND/2007. 4. IN GROUND NO. 1, THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN DELETING THE ADDITION AT RS. 1,27 ,424/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INCOME FROM UNDISCL OSED SOURCES. 5. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAG ED IN OPERATING A SOYA PROCESSING FACILITY AND TRADING IN SOYA SEED S. THE A.O. FOUND THAT AS PER TRIPARTITE AGREEMENT BETWEEN THE ASSESSEE, ITC AND PAIL, THE ASSESSEE PROCESSED THE SOYA SEEDS. THE A.O. FURTHER HELD THAT OIL REFINING REVENUE SHOULD HAVE BEEN SHOWN BY THE ASSESSEE AT R S. 40,90,192/- WHEREAS THE TURNOVER WAS SHOWN BY THE ASSESSEE AT R S. 32,62,768/- ONLY, HENCE, HE ADDED THE DIFFERENCE BETWEEN THE TWO AS UNDISCLOSED INCOME. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A), WHEREIN IT WAS CONTENDED THAT THE ASSES SEE COULD PRODUCE CRUDE OIL AND DEOILED CAKE AS PER THE AGREEMENT. HO WEVER, IT WAS NOT NECESSARY THAT ALL CRUDE OIL MUST BE REFINED. IT WA S FURTHER SUBMITTED THAT THE PROCESSING DEPENDED UPON THE INSTRUCTIONS OF TH E ITC, WHEREAS THE A.O. HAD ASSUMED THAT ALL THE CRUDE OIL HAD TO BE R EFINED ONLY AND THAT TOO WITHOUT VERIFYING THE FACTS FROM THE OTHER PARTIES INVOLVED IN THE ACTIVITY. PAGE 3 OF 7 I.T.A.NO. 632/IND/2007 & C.O.133/IND/2 007 M/S.SUNEGRA FOODS PRIVATE LIMITED, BHOPAL IT WAS ALSO CONTENDED THAT THE JOB RECEIPTS SHOWN B Y THE ASSESSEE ALSO TALLIED WITH THE T.D.S. CERTIFICATE ISSUED BY M/S. PAIL. THE LD. CIT(A) HELD THAT THE A.OS ACTION WAS A CASE OF PRESUMPTIO NS AND GUESS WORK AND THAT TOO WHEN HE COULD HAVE CONDUCTED ENQUIRIES FRO M I.T.C. /M/S. PAIL TO VERIFY THE FACTS. ACCORDINGLY, HE DELETED THE AD DITION. AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFORE US. 6. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OT HER HAND, PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 7. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 8. IT IS NOTED THAT THE ASSESSEE IS ENGAGED IN JOB WOR K ACTIVITIES. IT HAS PROCESSED SOYABEAN FOR PRODUCING CRUDE OIL AND DEOILED CAKE. CRUDE OIL CAN BE OF ORDINARY CATEGORY OR AS WELL AS OF RE FINED CATEGORY. THE A.O. HAS PRESUMED THE FACT THAT THE ASSESSEE SHOULD HAVE PRODUCED ONLY REFINED OIL, WHICH IS NOT SUPPORTED BY ANY MATERIAL ON RECO RD. ON THE CONTRARY, THE ASSESSEES JOB WORK RECEIPTS ARE DULY SUPPORTED BY THE TDS CERTIFICATES ISSUED BY THE CLIENT. IN THIS VIEW OF THE MATTER, W E HOLD THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. PAGE 4 OF 7 I.T.A.NO. 632/IND/2007 & C.O.133/IND/2 007 M/S.SUNEGRA FOODS PRIVATE LIMITED, BHOPAL 9. IN GROUND NOS. 3 & 4, THE REVENUE IS AGGRIEVED BY T HE DECISION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 2 ,10,387/- OUT OF ADMINISTRATIVE EXPENSES AND RS. 2,14,758/- OUT OF T RAVELING EXPENSES. 10. THE FACTS, IN BRIEF, ARE THAT THE A.O. FOUND THAT T HE ASSESSEE HAD CLAIMED SALARY TO ADMINISTRATIVE STAFF AT RS. 7,01, 290/-, WHICH, HE FOUND EXCESSIVE IN VIEW OF THE NATURE OF THE ACTIVITY OF THE ASSESSEE. HENCE, HE DISALLOWED 30 % THREREOF. SIMILARLY, THE A.O. DISAL LOWED TOTAL TRAVELING EXPENSES FOR THE REASONS THAT THE ASSESSEE HAD SUFF ERED LOSS, HENCE, THERE WAS NO PRUDENCE IN INCURRING THESE EXPENSES. AGGRIE VED BY THIS, THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A), WHEREIN THE ASSESSEE SUBMITTED THAT THE REASONS FOR TRAVELING E XPENSES INCURRED BY THE ASSESSEE. THE LD. CIT(A) REDUCED THE DISALLOWANCE T O 25 % OF BOTH THESE EXPENSES FOR THE REASONS THAT ALL THE VOUCHERS WERE NOT PRODUCED BEFORE THE A.O. FOR VERIFICATION. AGGRIEVED BY THIS, THE R EVENUE IS IN APPEAL BEFORE US. 11. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OT HER HAND, PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 12. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. PAGE 5 OF 7 I.T.A.NO. 632/IND/2007 & C.O.133/IND/2 007 M/S.SUNEGRA FOODS PRIVATE LIMITED, BHOPAL 13. IT IS NOTED THAT THE VOUCHERS HAVE BEEN MISPLACED. HENCE, FOR WANT OF VERIFICATION, DISALLOWANCE SUSTAINED BY THE CIT(A) OUT OF ADMINISTRATIVE EXPENSES AND TRAVELING EXPENSES IS C ONFIRMED. BEFORE PARTING, WE MAY ADD THAT DUE TO DISTANCE BETWEEN T HE HEAD OFFICE AND THE PROCESSING FACILITIES, THE A.O. WAS NOT JUSTIFI ED IN DISALLOWING THE TOTAL TRAVELING EXPENSES. ACCORDINGLY, WE DISMISS B OTH THESE GROUNDS OF THE REVENUE. 14. IN GROUND NO.4, THE REVENUE IS AGGRIEVED BY THE DE CISION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 11,17,07 7/-MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN SALE PROCEEDS. 15. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE SOLD SEE DS PROCURED FROM I.T.C. TO THE FARMERS. THE A.O. ON THE BASIS OF AGREEMENT BETWEEN THE ASSESSEE AND THE I.T.C. WORKED OUT THE QUANTUM OF SALES AT RS. 83,73,813/-. THE A.O., ACCORDINGLY, ADDED THE IMPUG NED SUM BEING DIFFERENCE BETWEEN THE VALUE WAS ARRIVED AT BY THE ASSESSING OFFICER AND THE VALUE OF SALE AS SUBMITTED BY THE ASSESSEE. IN APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT SOYABEAN WAS GR ADED BY THE ASSESSEE BY PROCESSING, WHICH RESULTED INTO DAMAGED SEEDS BE ING SEGREGATED. IT WAS ALSO CONTENDED THAT THE ASSESSEE HAD RECEIVED S ERVICE CHARGES AT RS. 3,98,000/- AND, IN FACT, THE ASSESSEE WAS ENTITLED ONLY FOR SERVICE CHARGES AND WHATEVER LOSS WAS THERE THAT WAS TO THE ACCOUNT OF I.T.C. THE LD. PAGE 6 OF 7 I.T.A.NO. 632/IND/2007 & C.O.133/IND/2 007 M/S.SUNEGRA FOODS PRIVATE LIMITED, BHOPAL CIT(A) FOUND THAT THIS ADDITION WAS ALSO A CASE OF ASSUMPTIONS AND PRESUMPTIONS AND THAT TOO WITHOUT ANY INQUIRY BEING DONE BY THE ASSESSING OFFICER FROM I.T.C. ACCORDINGLY, HE DELET ED THE ADDITION. AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFORE US. 16. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OT HER HAND, PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 17. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 18. IT IS NOTED THAT THE ASSESSEE HAD PURCHASED SOYA SE EDS FROM I.T.C., WHICH HAS BEEN PROCESSED AND GRADED AND THE REAFTER SALE HAS BEEN MADE TO THE FARMERS. IN THIS PROCESS, SOME RECEIPTS IS NECESSARILY GENERATED. FURTHER, THE A.O. HAS NOT CONDUCTED ANY INQUIRY FROM I.T.C. AND HAS ALSO NOT TAKEN INTO CONSIDERATION THE FACT THAT THE ASSESSEE COULD EARN ONLY SERVICE CHARGES FROM SUCH ACTIVITIES AS P ER THE AGREEMENT BETWEEN HIM AND THE I.T.C. THUS, WE HOLD THAT THIS ADDITION HAS RIGHTLY BEEN DELETED BY THE CIT(A). ACCORDINGLY, THIS GROUN D OF THE REVENUE IS ALSO DISMISSED. 19. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 20. NOW, WE SHALL TAKE UP CROSS OBJECTION FILED BY THE ASSESSEE, WHEREIN THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT ORDER PAGE 7 OF 7 I.T.A.NO. 632/IND/2007 & C.O.133/IND/2 007 M/S.SUNEGRA FOODS PRIVATE LIMITED, BHOPAL ON THE GROUND THAT IT WAS TIME BARRED. THE ASSESSEE DID NOT PRESS THE SAME. HENCE, WE DISMISS THE SAME AS NOT PRESSED. 21. THUS, IN THE RESULT, CROSS OBJECTION FILED BY THE A SSESSEE IS DISMISSED. 22. TO SUM UP, BOTH REVENUES APPEAL AS WELL AS ASSESSE ES CROSS OBJECTION ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 14 TH DECEMBER, 2009. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :14 TH DECEMBER, 2009. CPU* 7812