M/s. Ashok Tobacco Processing, Jalgaon V. ITO, Ward 2(2), Jalgaon

ITA 664/PUN/2013

• Counselvise Citation: 66424514 RSA 2013
• Duration Of Justice: 2 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 04-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 13-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.664/PN/2013 (ASSESSMENT YEAR : 2008-09) M/S ASHOK TOBACCO PROCESSING, DHULIA ROAD, AMALNER, DIST. JALGAON. PAN : AAEFA0277H . APPELLANT VS. INCOME TAX OFFICER, WARD 2(2), JALGAON. . RESPONDENT ASSESSEE BY : MR. ABHAY AVCHAT DEPARTMENT BY : MR. SANTOSH KUMAR DATE OF HEARING : 04-02-2015 DATE OF PRONOUNCEMENT : 18-03-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, NASHIK DATED 31.12.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 06.1 2.2010 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL :- 1. THE LEARNED INCOME TAX OFFICER, WARD 2(2), JALG AON HAS ERRED IN MAKING AGGREGATE ADDITIONS AND DISALLOWANCES OF RS. 4,32,186/- AND THE CIT(A) HAS ERRED IN CONFIRMING PARTLY THE SAME. 2. THE LEARNED INCOME TAX OFFICER, WARD 2(2), JALGA ON HAS ERRED IN INCREASING THE PRODUCTION ON THE BASIS OF CONSUMPTI ON OF ELECTRICITY AMOUNTING TO RS.4,32,186/- AND THE CIT(A) HAS ERRED IN CONFIR MING PARTLY THE SAME. 3. THE LEARNED INCOME TAX OFFICER, WARD 2(2), JALGA ON HAS ERRED IN INCREASING THE PRODUCTION ON THE BASIS OF PAYMENT O F WAGES AMOUNTING TO RS.3,10,317/- AND THE CIT(A) HAS ERRED IN CONFIRMIN G PARTLY THE SAME. 4. PROVISION OF SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 ARE NOT APPLICABLE FOR EXPENSES WHEN INCOME OF THE ASSESSEE HAVING BEEN DETERMINED BY RESORTING TO ESTIMATION ALSO WHEN THE RE WAS NO ORAL OR WRITTEN ITA NO.664/PN/2013 CONTRACT WITH THE ASSESSEE AND THE TRANSPORTER. LEA RNED INCOME TAX OFFICER, WARD 2(2), JALGAON HAS ERRED IN MAKING DISALLOWANCE AGGREGATING RS.2,72,900/-, AND THE CIT(A) HAS ERRED IN CONFIRMI NG THE SAME. 5. THE LEARNED INCOME TAX OFFICER, WARD 2(2), JALGA ON HAS ERRED IN DISALLOWING AN AMOUNT OF RS.29,534/- DEBITED ON ACC OUNT OF CHUNA MANUFACTURING ACCOUNT, AND THE CIT(A) HAS ERRED IN CONFIRMING PARTLY THE SAME. 6. THE LEARNED INCOME TAX OFFICER, WARD 2(2), JALGA ON HAS ERRED IN DISALLOWING AN AMOUNT OF RS.2,26,979/- DEBITED ON A CCOUNT OF MALL EXPENSES, AND THE CIT(A) HAS ERRED IN CONFIRMING PARTLY THE S AME. 7. THE LEARNED INCOME TAX OFFICER, WARD 2(2), JALGAON HAS ALSO ERRED IN DISALLOWING AN AMOUNT OF RS.87,837/- DEBIT ED ON ACCOUNT OF GANGHAT AND KARKHANA MAJURI, AND THE CIT(A) HAS ERRED IN CO NFIRMING THE PARTLY SAME. 8. AN AMOUNT OF RS.26,755/- RELATING TO MACHINERY E XPENSES HAS BEING DISALLOWED BY THE INCOME TAX OFFICER, WARD 2(2), JA LGAON, AND THE CIT(A) HAS ERRED IN CONFIRMING PARTLY THE SAME. 9. THE LEARNED INCOME TAX OFFICER, WARD 2(2), JALGA ON HAS ERRED IN DISALLOWING RS.22,020/- ON ACCOUNT OF MACHINERY PUN ELI MAJURI, AND THE CIT(A) HAS ERRED IN CONFIRMING PARTLY THE SAME. 10. THE LEARNED INCOME TAX OFFICER, WARD 2(2), JALG AON HAS ERRONEOUSLY INCREASED THE CREDITORS AMOUNTING TO RS.4,36,682/-, AND THE CIT(A) HAS ERRED IN CONFIRMING PARTLY THE SAME. 11. THE ASSESSEE PRAYS THAT IN VIEW OF THE FACT THA T PROPER BILLS ARE MAINTAINED BY THE ASSESSEE AND THE DISALLOWANCE SUP PORTING TO IMPROPER BILLS AND VOUCHERS BE DELETED, AND THE CIT(A) HAS ERRED I N CONFIRMING PARTLY THE SAME. 12. THE ASSESSMENT MADE UNDER PROVISIONS OF THE INC OME-TAX ACT, 1961 BY THE LEARNED ASSESSING OFFICER, JALGAON IS IN VIO LATION OF THE SAID PROVISION AND IS BAD IN LAW, AND THE CIT(A) HAS ERRED IN CONF IRMING THE SAME. 13. THE ASSESSMENT ORDER IS NOT KEEPING WITH THE PR OVISIONS OF LAW AND NEED TO BE CANCELLED. 3. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE F OR THE ASSESSEE SUBMITTED THAT OTHER THAN THE GROUND OF APPEAL NO.1 0 RELATING TO THE DIFFERENCE IN CREDITORS AMOUNTING TO RS.4,36,682/-, ALL OTHER GROUNDS OF APPEAL ARE NOT BEING PRESSED SINCE ON SUCH ISSUES, THE ASS ESSEE HAD AGREED FOR THE ADDITIONS BEFORE THE ASSESSING OFFICER AND/OR CIT(A ). IN THIS MANNER, THE RIVAL COUNSELS WERE HEARD ONLY WITH RESPECT TO THE DISALL OWANCE MADE BY THE ASSESSING OFFICER OF RS.4,36,682/- ON ACCOUNT OF DI FFERENCE IN THE CREDITORS BALANCES. IN THIS CONTEXT, BRIEF FACTS ARE THAT TH E ASSESSEE IS A PARTNERSHIP FIRM WHICH IS ENGAGED IN THE MANUFACTURING CHEWING TOBAC CO AND CHUNA. DURING THE ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTED THAT AS PER THE DETAILS OF ITA NO.664/PN/2013 CREDITORS FILED BY THE ASSESSEE AND THE INFORMATION COLLECTED FROM THE CREDITORS DIFFERENCES WERE NOTED. SUCH DIFFERENCES IN THE BA LANCES APPEARING IN THE NAME OF THE PARTIES IN THE ASSESSEES BOOKS VIS--V IS THE BALANCE APPEARING IN THE BOOKS OF THE CREDITORS HAVE BEEN TABULATED BY T HE ASSESSING OFFICER IN PARA 9 OF THE ASSESSMENT ORDER, WHICH TOTAL TO RS.4 ,36,682/-. THE ASSESSING OFFICER HAS NOTED THAT ASSESSEE COULD NOT RECONCILE THE DIFFERENCES AND THEREFORE THE SUM OF RS.4,36,682/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. BEFORE THE CIT(A), ASSESSEE WAS REQUIRED TO PROVIDE STATEMENTS OF ACCOUNT OF SUCH CREDITORS FROM ASSESSMENT YEARS 200 5-06 TO 2009-10 AS APPEARING IN ITS BOOKS OF ACCOUNT. THE CIT(A) HAS NOTED THAT ASSESSEE DID NOT PRODUCE THE DETAILS BUT AGREED FOR AN ADDITION OF R S.64,320/- WITH RESPECT TO THE FIVE CREDITORS, WHERE BALANCES WERE OUTSTANDING FOR 4 TO 5 YEARS, AS PER THE DETAILS CONTAINED IN PARA 13 OF THE IMPUGNED ORDER. IN PARA 13, THE CIT(A) HAS TABULATED CASES WHERE BALANCE AS PER THE CREDITOR W AS NIL WHEREAS ASSESSEE WAS SHOWING CERTAIN CREDIT BALANCES AND SUCH DIFFER ENCES CAME TO RS.2,27,356/-. HE THEREFORE HELD THAT ADDITION OF RS.2,27,356/- ONLY WAS JUSTIFIED INSTEAD OF RS.4,36,682/- MADE BY THE ASSE SSING OFFICER. AS A CONSEQUENCE, ASSESSEE WAS ALLOWED A RELIEF OF RS.2, 09,326/- AND THE BALANCE OF RS.2,27,356/- WAS SUSTAINED. 4. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE CONCEDED THAT IN SO FAR AS THE RS.64,320/- OUT OF THE ADDITION OF RS.2, 27,356/- IS CONCERNED, THE SAME IS NOT DISPUTED AS IT WAS AGREED BEFORE THE CI T(A). FOR THE BALANCE OF THE AMOUNT, THE LD. REPRESENTATIVE SUBMITTED THAT T HE ADDITION HAS BEEN SUSTAINED WITHOUT AFFORDING THE ASSESSEE AN OPPORTU NITY TO RECONCILE THE DIFFERENCE. IT WAS ASSERTED THAT BEFORE THE LOWER AUTHORITIES ALSO, ASSESSEE HAD POINTED OUT THAT THE DIFFERENCES WERE RECONCILA BLE AND IN THIS CONTEXT HE REFERRED TO THE ACCOUNT STATEMENTS OF CERTAIN PARTI ES PLACED IN THE PAPER BOOK. THE LD. REPRESENTATIVE SUBMITTED THAT IF THE MATTER IS RESTORED BACK TO THE FILE ITA NO.664/PN/2013 OF THE ASSESSING OFFICER, ASSESSEE WOULD BE ABLE TO SUBSTANTIATE ITS POSITION THAT UPON RECONCILIATION OF THE RESPECTIVE CREDITOR S THE IMPUGNED DIFFERENCES DO NOT EXIST SO AS TO JUSTIFY AN ADDITION. 5. THE LD. DEPARTMENTAL REPRESENTATIVE APPEARING FO R THE REVENUE HAS NOT SERIOUSLY OPPOSED ASSESSEES PLEA FOR THE MATTE R TO BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER IN ORDER TO RECON CILE THE BALANCES WITH THE IMPUGNED CREDITORS. 6. HAVING CONSIDERED THE RIVAL STANDS, WE FIND THAT THE ASSESSING OFFICER HAS MADE THE ADDITION ON THE BASIS OF HIS DISCUSSIO N IN PARA 9 OF THE ASSESSMENT ORDER. IT IS NOTED BY THE ASSESSING OFF ICER THAT THE DIFFERENCES IN THE BALANCES STANDING IN THE NAME OF CREDITORS WAS NOTED ON THE BASIS OF INFORMATION COLLECTED . SO HOWEVER, THERE IS NO ILLUSTRATION AS TO WHAT WAS THE INFORMATION THAT WAS COLLECTED AND IT IS ALSO NOT E MERGING FROM RECORD AS TO WHETHER ANY SUCH INFORMATION WAS CONFRONTED TO THE ASSESSEE. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE FOR THE ASSESSEE HA S ASSERTED THAT THE DIFFERENCES NOTED BY THE LOWER AUTHORITIES WITH RES PECT TO THE BALANCES IN THE ACCOUNT OF THE CREDITORS WERE RECONCILABLE; IN SUPP ORT, REFERENCE HAS BEEN MADE TO THE STATEMENTS PLACED IN THE PAPER BOOK. I N OUR CONSIDERED OPINION, IT WOULD MEET THE ENDS OF JUSTICE, IF THE MATTER IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER AND THE ASSESSEE BE ALLOWED A N OPPORTUNITY TO RECONCILE THE DIFFERENCES WITH RESPECT TO THE CREDITORS CORRE SPONDING TO THE ADDITION OF RS.1,63,036/-, I.E. (RS.2,27,356/- MINUS RS.64,320/-) SUSTAINED BY THE CIT(A) OTHER THAN THE AMOUNT ADMITTED BY THE ASSESSEE. NE EDLESS TO SAY, THE ASSESSEE SHALL BE ALLOWED A REASONABLE OPPORTUNITY TO PUT-FORTH ITS CLAIM BEFORE THE ASSESSING OFFICER, WHO SHALL CONSIDER TH E SAME AND THEREAFTER PASS AN APPROPRIATE ORDER ON THIS LIMITED ASPECT AS PER LAW. THUS, ON GROUND OF APPEAL NO.10, ASSESSEE PARTLY SUCCEEDS FOR STATISTI CAL PURPOSES. ITA NO.664/PN/2013 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED, AS ABOVE. ORDER PRONOUNCED ON 18 TH MARCH, 2015. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 18 TH MARCH, 2015. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, NASHIK; 4) THE CIT-II, NASHIK; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE