Poonam Agarwal Prop. Agarwal Trading Co., Hardoi V. Income Tax Officer-3(3), Hardoi

ITA 659/LKW/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1788 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 05-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

I.T.A. NO.659/LKW/2017 ASSESSMENT YEAR:2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO.659/LKW/2017 ASSESSMENT YEAR:2013-14 POONAM AGARWAL, PROP. AGARWAL TRADING CO., CENTRAL BANK ROAD, RAILWAYGANJ, HARDOI. PAN:AAWPA 3620Q VS. INCOME TAX OFFICER-3(3), HARDOI. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), BAREILLY DATED 19/07/2017. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS THE ACTI ON OF LEARNED CIT(A) BY WHICH HE HAS UPHELD AN ADDITION OF RS.3,88,015/- WH ICH THE ASSESSING OFFICER HAD MADE ON ACCOUNT OF DISALLOWANCE OF BANK CHARGES CHARGED BY HDFC BANK LIMITED. 3. AT THE OUTSET LEARNED A. R. SUBMITTED THAT ASSES SEE IS A DEALER IN TRADING OF SUGAR, VANASPATI AND MUSTARD OIL ETC. AN D WAS HAVING A CURRENT ACCOUNT WITH HDFC BANK AND USED TO DEPOSIT PROCEEDS WITH THE BANK AND HDFC BANK CHARGED BANK CHARGES DURING ASSESSMENT YE AR 2011-12 AND APPELLANT BY SHRI SANJAY SAXENA, C.A. RESPONDENT BY SMT. PINKI MAHAWAR, D.R. DATE OF HEARING 24/08/2018 DATE OF PRONOUNCEMENT 31 / 08 /201 8 I.T.A. NO.659/LKW/2017 ASSESSMENT YEAR:2013-14 2 2012-13. IT WAS SUBMITTED THAT ASSESSEE DID NOT CH ARGE THESE CHARGES TO ITS PROFIT & LOSS ACCOUNT AS IT WAS UNDER IMPRESSION TH AT BANK WILL WAIVE OFF THE SAME AS WAS PROMISED TO HER VERBALLY. OUR ATTENTIO N WAS INVITED TO VARIOUS LETTERS WRITTEN BY THE ASSESSEE PLACED AT PAGES 10 TO 15 OF THE PAPER BOOK WHEREIN THE ASSESSEE HAS BEEN REQUESTING THE BANKER S TO WAIVE OFF THE CHARGES. OUR SPECIFIC ATTENTION WAS INVITED TO LET TER DATED 10/03/2013 PLACED AT PAGE NO. 13 OF THE PAPER BOOK WHERE THE B ANKER HAD EXPRESSED THEIR INABILITY TO REVERSE THE BANK CHARGES AND THE REFORE, THE ASSESSEE DEBITED THESE CHARGES DURING THE YEAR UNDER CONSIDE RATION. LEARNED A. R. SUBMITTED THAT THE EXPENDITURE BECAME ALLOWABLE EXP ENDITURE DURING THE YEAR UNDER CONSIDERATION AS THE BANKER HAD FINALLY REFUSED TO REVERSE THESE CHARGES THEREFORE, IT SHOULD HAVE BEEN ALLOWED. 4. LEARNED D.R., ON THE OTHER HAND, SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THERE ARE VARIOUS LETTERS WRITTEN BY THE ASSESSEE PLACED AT PAGES 10 TO 15 OF THE PAPER BOOK WITH A REQUEST TO BANKER TO WAIVE OFF THE CHARGES. HOWEVER, THE BANK VIDE LETTER DATED 10/03/2013 EXPRESSED ITS INABILITY TO REVERSE THESE CHARGES AND THEREFORE, THE EXPENSES WHICH UNDISPUTEDLY WERE NOT CLAIMED IN EARLIER YEAR BECAME EXPENSES OF THE ASSESSEE DURING THE YEAR UNDER CONS IDERATION. THE OBJECTION OF THE AUTHORITIES BELOW IN NOT ALLOWING THE EXPENDITURE DURING THIS YEAR IS THAT THE EXPENDITURE RELATES TO EARLIER YEA RS AND THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. HOWEVER , IN OUR VIEW EVEN UNDER MERCANTILE SYSTEM OF ACCOUNTING THE EXPENDITU RE RELATES TO THE YEAR DURING WHICH IT BECOMES AN EXPENDITURE. IN THE PRE SENT CASE THE ASSESSEE WAS UNDER IMPRESSION ON THE VERBAL ASSURANCE OF THE MANAGER OF THE BANK I.T.A. NO.659/LKW/2017 ASSESSMENT YEAR:2013-14 3 THAT THESE EXPENSES WILL BE REVERSED AND THEREFORE, HE DID NOT BOOK THESE EXPENSES DURING EARLIER YEARS. HOWEVER, WHEN SHE C AME TO KNOW THAT THESE EXPENSES WILL NOT BE REVERSED, SHE DEBITED THE SAME IN THE PROFIT & LOSS ACCOUNT AND THEREFORE, IS ALLOWABLE EXPENDITURE. I N VIEW OF THE ABOVE, WE ALLOW THE APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 31/08/2 018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:31/08/2018 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW