M/s. Sarojani Tea Company Pvt. Ltd., Dibrugarh V. Assistant Commissioner of Income Tax, Circle- 1, Dibrugarh

ITA 82/GTY/2016

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9924 (ITAT-GUWAHATI)
• Duration Of Justice: 6 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-07-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 20-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3); 142(1); 115JB; 143(1); 143(2)

Judgement Text

1 ITA No. 82/GTY/2016 M/s. Sarojini Tea Company Pvt. Ltd. AY 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, (VIRTUAL HEARING AT KOLKATA) [BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER & SHRI SONJOY SARMA, JUDICIAL MEMBER] I.T.A. No. 82/GTY/2016 Assessment Year: 2010-11 M/s. Sarojini Tea Company Pvt. Ltd. Kartick Para, Dibrugarh-786001. (PAN: AACCS 7284 H) Vs. ACIT, Circle-1, Dibrugarh. Appellant Respondent Date of Hearing 26.07.2022 Date of Pronouncement 21.10.2022 For the Appellant None For the Respondent Shri N.T. Sherpa, JCIT ORDER PER SONJOY SARMA, JM: This appeal filed by the assessee to the assessment year 2010-11 is directed against the order of ld. CIT(A), Dibrugarh dated 31.05.2016 which is arising out of assessment order u/s 143(3) of the Income-tax Act, 1961. The assessee is in appeal before the Tribunal raising the following grounds: “i. For that the ld. CIT(A) for short [CIT(A)] acted arbitrary in confirming the disallowance of Rs. 3,00,000/- made by AO under the account head other expenses, without considering the facts and our submissions made during the course of hearing. ii. For that the ld. CIT(A) was not justified in confirming the computations of book profit u/s 115JB of the Act made by AO without considering our submissions made during the course of hearing. iii. For that the ld. CIT(A) acted arbitrary in confirming the amount of agricultural income, the facts and deducted by AO from the composite income for computation of book profit u/s 115JB of the Act, without considering our submissions made during the course of hearing. iv. For that the appellant crave leave to submit additional grounds at the time of hearing of the appeal or before.” 2 ITA No. 82/GTY/2016 M/s. Sarojini Tea Company Pvt. Ltd. AY 2010-11 2. The brief facts of the case are that the assessee company filed its return on 12.10.2010 showing total income at Nil. The return of the assessee was processed u/s 143(1) of the Income Tax Act and the case of the assessee was selected for scrutiny. Subsequently, statutory notices u/s 143(2) and 142(1) were issued upon the assessee and in pursuance to the same, the ld. AR of the assessee appeared before the AO from time to time for hearing. During the course of assessment proceeding, the AO noticed that assessee debited Rs. 89,48,074/- to the profit & loss account under the head of other expenses. The AO asked the assessee explained payments and produce the supporting documents/bills/vouchers etc. However, the AR of the assessee could not able to produce supporting documents in connection with the above expenses and the ld. AO disallowed Rs. 3,00,000/- under the head of other expenses and added back to the total income of the assessee. 3. Dissatisfied with the above order, assessee preferred an appeal before the ld. CIT(A), where the appeal of the assessee was partly allowed. However, certain issues remain unaddressed by the ld. CIT(A) 4. Aggrieved by the above order, assessee preferred an appeal before the Tribunal raising four grounds of appeal. 5. At the time of hearing before this Tribunal, no one appeared on behalf of the assessee. Although this Tribunal issued notice upon the assessee, therefore, this appeal cannot be remain pending for inordinate period and interest of justice, we decide the appeal with the assistance of ld. DR. 6. While perusing the material available on record, we noticed that the first issue raised by the assessee before this Tribunal regarding disallowance of Rs. 3,00,000/- on account of other expenses and the assessee alleged that the authorities below decided the issue without considering the facts and submission during the course of hearing before the authorities below. While we going through the assessment order, the ld. AO while framing the assessee he observed that assessee could not produce full supporting documents / evidence in support of claim of such expenses and the assessee submitted that it was not possible on the part of 3 ITA No. 82/GTY/2016 M/s. Sarojini Tea Company Pvt. Ltd. AY 2010-11 assessee to obtain bills of supporting documents for the expenses in question. Accordingly, the AO disallowed Rs. 3,00,000/- under the head of other expenses and added back to the total income of the assessee. On this very issue when assessee preferred an appeal before the ld. CIT(A), the assessee could not able to furnish any supported documents in support of claim of expenses and the ld. CIT(A) has no other option but to decide this issue against the assessee. Similarly, when this matter comes before this Tribunal, no one appeared on behalf of the assessee nor file any documents to substantiate assessee’s claim for such expenses and did not produce any vouchers, bills to support its claim as such we do not find any irregularity in the impugned order passed by the ld. CIT(A) on this issue and accordingly this ground of appeal of the assessee disallowed the same. 7. However, Ground no. 2 & 3 raisesd by the assessee are connected, therefore, we are going to decide both issues simultaneously. In these grounds, the assessee’s claim for computation of book profit u/s 115JB of the Act made by the AO without considering the submission of the assessee during the course of assessment proceeding and same has been confirmed by the ld. CIT(A). The fact of the case was that the Assessing Officer while framing the assessment proceeding he noticed that the assessee had straightway calculated MAT u/s 115JB applying Rule 8 of the IT Rules, 1962 on the book profit. However, the assessee alleged that the ld. AO did the calculation wrong manner as the assessee had component of book profit derived from bought leaves and which ought to have been deducted from the book profit before applying Rule 8 as envisaged and prescribed in the Act and the Rules. Therefore, the ld. AO had to segregated the component related to bought leaves contained in the book profit before applying Rule 8. Resultantly, computation of adjusted book profit different from the claimed by the appellant. Similarly, the ld. CIT(A) while addressing this issue, he viewed that as per Circular No. 495 of the CBDT, the intention of the Board’s is quite clear that the companies having its own plantation and deriving income from sale of tea manufactured from those leaves plucked from its own plantation should be benefitted and the intention of the legislature to promote agriculture by taxing less through application of Rule 8 would be defeated and due to this reason, ld. CIT(A) considered that the ld. AO was perfectly justified on the facts and in law to 4 ITA No. 82/GTY/2016 M/s. Sarojini Tea Company Pvt. Ltd. AY 2010-11 segregate the component of profit related to bought leaves in book profit before applying Rule 8. Accordingly, ld. CIT(A) dismissed the grounds of appeal raised by the assessee. 8. We after going through the facts of the case as well as the issued involved and findings of the authorities below and considering the views taken by the AO as well as ld. CIT(A) where the authorities below considered the facts of the assessee properly discussed the issues in detail and considered the same in accordance with law. Accordingly, we do not find any infirmity in the order passed by the ld. CIT(A) in respect of these issues and we dismissed the grounds raised by the assessee. The remaining grounds are general in natural and need not required to be adjudicated. 9. In the result, the appeal of the assessee is dismissed. Order is pronounced in the open court on 21.10.2022. Sd/- Sd/- (Manish Borad) (Sonjoy Sarma) Accountant Member Judicial Member Dated: 21.10.2022 Biswajit, Sr. PS Copy of the order forwarded to: 1. Appellant– M/s. Sarojini Tea Company Pvt. Ltd. 2. Respondent – ACIT, Circle-1, Dibrugarh. 3. CIT(A), 4. CIT , 5. DR, ITAT, True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata