Haryana Warehousing Corporation, Panchkula V. DCIT, Panchkula

ITA 662/CHANDI/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9826 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-06-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 09-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Assessee Lawyers: B K NOHRIA
• Keywords: Charitable institution
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 662/CHD/2011 ASSESSMENT YEAR: 2003-04 HARYANA WAREHOUSING CORP., VS THE DCIT, BAY NO. 15-18, PANCHKULA CIRCLE, SECTOR 2, PANCHKULA. PANCHKULA. PAN: AAACH3948K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.K.NOHRIA RESPONDENT BY : SMT. JYOTI KUMARI DATE OF HEARING : 17.06.2015 DATE OF PRONOUNCEMENT : 19.06.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS) PANCHKULA DATED 29.03.2011 FOR ASSESSMENT YEAR 2003-04. 2. THE ASSESSEE ORIGINALLY FILED THIS APPEAL ON TWO GROUNDS. THEREAFTER, LD. COUNSEL FOR THE ASSESSEE FILED REVISED GROUNDS OF APPEAL CONTAINING SIX GROUNDS OF APPEAL. 3. GROUND NO. 6 IS GENERAL IN NATURE AND NEED NO FINDING. THE LD. COUNSEL FOR THE ASSESSEE DID NOT P RESS GROUND NOS. 1 & 2 OF THE REVISED GROUNDS OF APPEAL. THE SAME ARE, THEREFORE, DISMISSED AS NOT PRESSED. THE 2 REMAINING GROUND NOS. 3, 4 AND 5 OF THE REVISED GRO UNDS READ AS UNDER : 3. THAT ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE THE LEARNED CIT (A) PANCHKULA HAS ERRED IN LAW AND FACTS IN ADDING THE EXPENDITURE OF RS.37,84,658/- AS VIOLATION T O SECTION 43B AS THE SAME HAS NOT BEEN CLAIMED AS APPLI CATION OF INCOME AS THE APPELLANT IS A CHARITABLE INSTITUTION. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) PANCHKULA HAS ERRED IN LAW AND FAC TS IN DISALLOWING THE PENSION FUND EXPENDITURE OF RS.44,97,5 75/- AS THE SAME AROSE DURING THE YEAR AND ALLOWABLE AS APPLICATION OF INCOME ON PAYMENT BASIS APPELLANT IS A CHARITABLE INSTITUTION. 5. THAT ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE THE LEARNED CIT (A) PANCHKULA HAS ERRED IN LAW AND FACTS IN DISALLOWING THE LOAN WAIVE OFF EXPENDITURE OF RS.2, 13,828/- AS THE SAME AROSE DURING THE YEAR AND ALLOWABLE AS APPLICATION OF INCOME ON PAYMENT BASIS AS APPELLANT I S A CHARITABLE INSTITUTION. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT RETURN OF INCOME IN THIS CASE WAS FILED ON 28.11.2003 DECLARI NG INCOME AT RS. 2,44,34,637/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 30.12. 2005 AFTER MAKING VARIOUS ADDITIONS AND INCOME WAS ASSES SED AT RS.25,75,07,660/-. THE ASSESSEE FILED APPEAL BEF ORE LD. CIT(APPEALS) WHICH WAS DECIDED ON 02.09.2006 ALLOWI NG THE APPEAL OF THE ASSESSEE ON THE ISSUE OF STATUS O F THE ASSESSEE I.E. CHARITABLE ORGANIZATION AND CONFIRM ED THE ADDITIONS MADE BY THE ASSESSING OFFICER. THE ASSES SEE AS WELL AS DEPARTMENT FILED APPEALS BEFORE THE TRIBUNA L WHO VIDE ITS ORDER IN ITA 780/CHD/2006 AND ITA 797/CHD/2006 FOR ASSESSMENT YEAR 2003-04 DATED 14.09.2007 DIRECTED THE ASSESSING OFFICER TO GIVE E FFECT TO THE ORDER OF TRIBUNAL BY TREATING THE ASSESSEE CORP ORATION AS CHARITABLE INSTITUTION. THE ASSESSING OFFICER, 3 ACCORDINGLY, TAKE UP THE MATTER AND PASSED THE ORDE R UNDER SECTION 143(3) READ WITH SECTION 254 OF THE I NCOME TAX ACT DATED 24.12.2010 AND AFTER DISCUSSING VARIO US ISSUES, ASSESSED THE INCOME AT RS.25,75,07,664/- AS WAS MAINTAINED VIDE ORDER UNDER SECTION 143(3) DATED 30.12.2005. THE ASSESSEE CHALLENGED THE ORDER BEFO RE LD. CIT(APPEALS). SINCE THE PRESENT APPEAL IS CONFINED TO GROUND NOS. 3, 4 AND 5 OF THE REVISED GROUNDS OF AP PEAL REPRODUCED ABOVE, THEREFORE, WE NOTE THE FACTS WITH REGARD TO THESE THREE GROUNDS ONLY FROM THE ORDER O F LD. CIT(APPEALS) UNDER APPEAL. 5. THE LD. CIT(APPEALS) NOTED IN PARA 6 OF THE APPE LLATE ORDER THAT ASSESSEE HAS CHALLENGED VARIOUS ADDITION S MADE IN THE ORIGINAL ASSESSMENT ORDER DATED 30.12.2 005 I.E. VIOLATION OF SECTION 43B RS. 37,84,658/-, PENS ION FUND RS. 44,97,575/- AND LOAN WAIVE OFF EXPENDITURE RS. 2,13,828/-. THE LD. CIT(APPEALS) IN PARA 6.3 O F THE IMPUGNED ORDER HELD AS UNDER : 6.3 AS REGARDS, THE OTHER EXPENSES NO DETAILS HAVE B EEN FILED. THE APPELLANT HAS STATED THAT THE ADDITIONS AS PER ABO VE HAVE BEEN CONFIRMED BY MY PREDECESSOR. THE APPELLAN T HAS NOT GIVEN ANY ARGUMENTS IN SUPPORT OF ITS CLAIM THAT THE SAME HAVE BEEN WRONGLY MADE. IN THE ABSENCE OF THE DETAILS FILED AND IN VIEW OF THE REASONING GIVEN BY M Y PREDECESSOR IN HIS ORDER DATED 02.09.2006, THE ADDI TION SO MADE UNDER THE RESPECTIVE HEADS IS CONFIRMED. THE G ROUND OF APPEAL IS PARTLY ALLOWED. 6. IT MAY BE NOTED HERE THAT THE LD. CIT(APPEALS) W HILE ALLOWING THIS GROUND PARTLY, HAS ALLOWED TWO OTHER GROUNDS OF APPEAL OF THE ASSESSEE IN FAVOUR OF THE ASSESSEE. HOWEVER, ON REST OF THE GROUNDS, WHICH A RE AGITATED IN THE PRESENT APPEAL, LD. CIT(APPEALS) 4 DISMISSED THESE GROUNDS OF APPEAL FOLLOWING THE REA SONS GIVEN BY HIS PREDECESSOR VIDE ORDER DATED 02.09.200 6. 7. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE EXPENDITURE OF RS. 37,84,658/- WAS NOT CLAIMED AS EXPENDITURE. HE HAS SUBMITTED THAT THE ISSUE OF PE NSION FUND WAS DECIDED EARLIER BY ITAT CHANDIGARH BENCH I N THE CASE OF HARYANA FINANCIAL CORPORATION VS DCIT D ATED 27.03.2014 IN ITA NOS. 785 AND 945 OF 2011. HE HAS SUBMITTED THAT LOAN WAIVE OFF EXPENDITURE SHOULD BE ALLOWED AS APPLICATION OF INCOME ON PAYMENT BASIS. 8. ON THE OTHER HAND, LD. DR SUBMITTED THAT MATTER MAY BE REMANDED TO THE LD. CIT(APPEALS) FOR VERIFIC ATION OF THE FACTS. 9. IN VIEW OF THE SUBMISSIONS OF THE PARTIES IN THE LIGHT OF THE ORDER PASSED BY THE LD. CIT(APPEALS), WE ARE OF THE VIEW THE MATTER REQUIRES RE-CONSIDERATION AT THE LE VEL OF THE LD. CIT(APPEALS). THE LD. CIT(APPEALS), WITH R EGARD TO THE ABOVE THREE ADDITIONS, NOTED IN HIS FINDINGS IN PARA 6.3 REPRODUCED ABOVE, THAT NO DETAILS HAVE BEEN FIL ED ON THESE EXPENSES AND THAT COUNSEL FOR ASSESSEE HAS AL SO NOT GIVEN ANY ARGUMENTS. THE LD. CIT(APPEALS) FOLL OWED THE ORDER OF HIS PREDECESSOR DATED 02.09.2006 WHICH REMAINED IN APPEAL BEFORE TRIBUNAL, THEREFORE, THE LD. CIT(APPEALS) INSTEAD OF FOLLOWING THE ORDER OF HIS PREDECESSOR SHOULD HAVE GIVEN INDEPENDENT FINDING O N ALL THESE GROUNDS. FURTHER, ASSESSEE CLAIMED THAT NO 5 EXPENDITURE WAS CLAIMED UNDER SECTION 43B OF THE AC T, THEREFORE, FACTS SHOULD BE VERIFIED AND FURTHER WHE N SOME ADDITION IS MADE AGAINST THE ASSESSEE, IT COULD BE CONSIDERED AS APPLICATION OF INCOME BUT NEITHER THE ASSESSEE HAS FILED ANY DETAIL BEFORE LD. CIT(APPEAL S) NOR ARGUED THE GROUNDS BEFORE LD. CIT(APPEALS). FURTHE R, THE LD. CIT(APPEALS) HAS ALSO NOT DISCUSSED ANY FACTS A ND MATERIAL ON RECORD WHILE DECIDING AND GIVING HIS INDEPENDENT OPINION ON THESE GROUNDS. THEREFORE, CONSIDERING THE ABOVE FACTS THAT LD. CIT(APPEALS) H AS PASSED NON REASONED ORDER, IT WOULD BE REASONABLE A ND APPROPRIATE TO RESTORE THESE THREE GROUNDS TO THE F ILE OF LD. CIT(APPEALS) WITH DIRECTION TO RE-DECIDE THESE GROUNDS BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEIN G HERD TO THE ASSESSEE AND LD. CIT(APPEALS) SHALL PASS REA SONED ORDER GIVING FINDING OF FACT ON THE ABOVE GROUNDS O F APPEAL. 10. WITH THESE OBSERVATIONS, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JUNE,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 TH JUNE,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR ITAT CHANDIGARH