The Deputy Commissioner of Income tax, Phagwara V. The Phillaur Primary Co-op. Agri. Dev. Bank Ltd., Phagwara

ITA 83/ASR/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2249 (ITAT-AMRITSAR)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 05-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PIYUSH BANSAL
• Keywords: Business income; Additional evidence
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 83(ASR)/2013 ASSESSMENT YEAR: 2009-10 PAN: AAATT 4025F DEPUTY COMMISSIONER VS. THE PHILLAUR PRIMARY CO-OP. OF INCOME TAX, PHAGWARA AGRI, DEV. BANK LTD. GOR AYA CIRCLE, PHAGWARA TEH. PHILLAUR, PHAGWARA (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARSEM LAL, D.R. RESPONDENT BY: SH. PIYUSH BANSAL, C.A. DATE OF HEARING: 20.06.2013 DATE OF PRONOUNCEMENT: 26.06.2013 ORDER PER BENCH THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 19.11.2012 PASSED BY LEARNED CIT(A), JALANDHAR, FOR THE ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS: I. ADMITTING ADDITIONAL EVIDENCE FOR PAYMENT OF INTERE ST TO STATE AGRICULTURAL DEVELOPMENT BANK, CHANDIGARH, WHEN DUR ING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS ITSELF ADMI TTED THAT INTEREST OF RS. 50,26,477/- WAS REMAINED PAYABLE UP TO THE DUE DATE OF FILING OF RETURN OF INCOME IN THE CASE OF THE AS SESSEE. 2 II. WRONGLY DELETING THE ADDITION OF RS. 50,26,477/- AN D ALSO OBSERVING THAT BUSINESS INCOME COMPUTED AS PER SECT ION 29 OF INCOME TAX ACT, 1961 AND SUBJECT TO THE PROVISIONS OF SECTION 30 TO 43D OF INCOME TAX ACT WOULD NOT BE TAXED IN VIEW OF THE PROVISIONS OF SECTION 80P OF INCOME TAX ACT, 1961. III. IT IS PRAYED THAT THE ORDER OF THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) BE SET-ASIDE AND THAT OF THE ASSESSIN G OFFICER BE RESTORED. IV. THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND OR ALTER THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DI SPOSED OF. 2. THE ASSESSEE BEING A CO-OPERATIVE SOCIETY FILED ITS RETURN OF INCOME ON 25.09.2009 AT RS. NIL. AFTER COMPLETING THE NECESSA RY FORMALITIES UNDER THE LAW, THE ASSESSING OFFICER FINALLY DISALLOWED THE I NTEREST PAYABLE TO THE STATE AGRICULTURAL DEVELOPMENT BANK, CHANDIGARH, AT RS. 5 0,26,477/-UNDER SECTION 43B OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) ON THE GROUND THAT IT WAS NOT PAID ON OR BEFORE DUE DATE OF FILIN G OF RETURN OF INCOME I.E. 30.09.2009. ASSESSING OFFICE ALSO MADE ANOTHER ADDI TION OF RS. 4,24,178/- UNDER SECTION 41(1) OF THE ACT ON ACCOUNT OF UNCLAI MED AND UNPAID DIVIDEND TO SHAREHOLDERS AND DEDUCTION U/S 80P OF THE ACT WA S ALSO DISALLOWED ON THE SAME WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ON 21.10.2011. AGGRIEVED BY THE ASSESSMENT ORDER DATED 21.10.2011, ASSESSEE FILED AN APPEAL BEFORE LEARNED FIRST APPELLATE AUTH ORITY WHO VIDE IMPUGNED ORDER DATED 19.11.2012, PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 3 3. NOW, THE REVENUE BEING AGGRIEVED BY THE IMPUGNED ORDER DATED 19.11.2012 PASSED BY LEARNED CIT(A), JALANDHAR, FIL ED THE PRESENT APPEAL CHALLENGING THE DELETION OF ADDITION OF RS. 50,26,4 77/- AND ADMISSION OF ADDITIONAL EVIDENCE FOR PAYMENT OF INTEREST TO STAT E AGRICULTURAL DEVELOPMENT BANK, CHANDIGARH. 4. AT THE TIME OF HEARING, LEARNED D.R. STATED THAT LEARNED FIRST APPELLATE AUTHORITY HAS WRONGLY ADMITTED THE ADDITIONAL EVIDE NCE FILED BY THE ASSESSEE AND HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSING OFFICER FOR VERIFYING THE SAME AND WRONGLY DELETED THE ADDITION IN DISPUTE. 5. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSES SEE HAS RELIED UPON THE ORDER PASSED BY LEARNED FIRST APPELLATE AUTHORITY A ND STATED THAT THE SUBMISSION OF THE ASSESSEE ALONGWITH THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE LEARNED FIRST APPELLATE AUTHORI TY WERE FORWARDED TO THE ASSESSING OFFICER FOR HIS COMMENTS BUT HE OBJECTED FOR ADMISSION OF ADDITIONAL EVIDENCE. THUS, THE LEARNED FIRST APPELL ATE AUTHORITY HAS GIVEN FULL OPPORTUNITY TO THE ASSESSEE AND THERE IS NO VI OLATION OF THE PROVISIONS OF RULE 46A OF THE I.T. RULES, 1962. HE FURTHER STATED THAT LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED THE ADDITIO N IN DISPUTE ON THE BASIS OF ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. THERE FORE, THE APPEAL FILED BY THE REVENUE MAY BE DISMISSED. 4 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDER PASSED BY L EARNED FIRST APPELLATE AUTHORITY. FOR THE SAKE OF CONVENIENCE, THE RELEVAN T PARAGRAPHS I.E. PARAS 7 TO 10 (PAGES 3 AND 4) OF THE FINDINGS GIVEN BY LEAR NED FIRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER ARE REPRODUCED BELO W: 7. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER , SUBMISSIONS MADE, COMMENTS OF A.O., THE REJOINDER AND THE MATER IAL ON RECORDS. 8. AS FAR AS ADMISSION OF ADDITIONAL EVIDENCE IS CO NCERNED, THE SAME IS IN THE SHAPE OF A CERTIFICATE FROM SADB AND ALSO THE LEDGER COPY IN ASSESSEES BOOKS FOR A.Y. 2010-11. THE AFFI DAVIT IS ALSO FILED TO SHOW THAT THE EVIDENCE WAS NOT ASKED BY THE COUNSEL DURING THE ASSESSMENT. THE ASSERTION MADE IS DEVOID OF ANY MAL A FIDE AND IS BASED ON A FACTUAL MATERIAL ON RECORDS WHICH COULD NOT BE ALTERED OR MODIFIED AT A LATER DATE. IN VIEW OF THIS, I FIND T HAT ADDITIONAL EVIDENCE WHICH GOES TO THE ROOT OF THE MATTER IS WELL ACCEPT ABLE AND HENCE ADMITTED UNDER CLAUSE (C) OF RULE 46A(1) OF I.T. RU LES. 8. EVEN AFTER ADMISSION OF THE ADDITIONAL EVIDENCE AN AMOUNT OF RS. 2,45,297/- IS CLEARLY DISALLOWABLE AS THE SAME IS PAID ON 5 TH NOVEMBER, 2009 I.E. WELL BEYOND THE DUE DATE OF FIL ING OF RETURN WHICH WAS 30.09.2009. IN VIEW OF THIS THE AMOUNT OF RS. 2 ,45,297/- IS DISALLOWED AND THE BALANCE OF THE ADDITION IS DELET ED. BUT HERE ALSO SINCE THE SAME WOULD BE TAKEN AS BUSINESS INCOME AND AS PER SECTION 29 WHICH ARE COMPUTED SUBJECT TO PROVISIONS OF SECTION 30 TO 43D OF I.T. ACT, THE SAME WOULD NOT BE TAXED IN VIE W OF SECTION 80P OF I.T. ACT BEING APPLICABLE TO THE CO-OP. SOCIETY. 9. GROUND NO. 2 RELATES TO ADDITION OF RS. 4,24,178 /- ON ACCOUNT OF UNCLAIMED/UNPAID DIVIDEND UNDER SECTION 41(1) OF I. T. ACT. 10. I HAVE CAREFULLY CONSIDERED THE ISSUE OF ADDITI ON MADE UNDER SECTION 41(1) OF I.T. ACT AND FIND THAT THIS AMOUNT OF UNPAID DIVIDENDS CANT BE ADDED UNDER SECTION 41(1) OF I.T. ACT FOR THE REASONS AS UNDER:- 5 I. DIVIDEND ITSELF IS INCLUDIBLE IN TOTAL INCOME. IN O THER WORDS, THE DIVIDENDS ARE TAKEN FOR COMPUTING TOTAL INCOME AND ARE ALREADY TAXED OR EXEMPT AS THE CASE MAY BE. II. IT IS AN ITEM OF PROFIT AND LOSS APPROPRIATION ACCO UNT AND NOT OF PROFIT AND LOSS ACCOUNT HENCE CANT STAND ALLOWED A S A DEDUCTION IN ANY PREVIOUS YEAR AS EXPENDITURE OR A TRADING LIABILITY. III. IN CASE OF ASSESSEE THERE IS NO WRITING BACK AS YET AND THEY ARE SHOWN AS PAYABLE. IV. SINCE THIS ITEM DOESNT REPRESENT ANY LOSS, EXPENDI TURE OR TRADING LIABILITY AND IS NOT ALLOWABLE AS DEDUCTION THE SAME CANT BE ADDED U/S 41(1) OF I.T. ACT WHEN IT IS SHO WN AS PAYABLE. V. IN CASE OF LAL TAXTILE MILLS (P) LTD. 180-ITR-45 (P UNJAB) CERTAIN UNCLAIMED LIABILITIES WERE WRITTEN BACK YET IT WAS HELD THAT THERE WAS NO FINDING OR MATERIAL TO SHOW THAT SUCH SUM WAS EVEN ALLOWED AS DEDUCTION IN ANY EARLIER YEAR T HE SAME COULDNT BE BROUGHT TO TAX U/S 41(1) OF I.T. ACT. 7. KEEPING IN VIEW THE AFORESAID FINDINGS GIVEN BY LEARNED FIRST APPELLATE AUTHORITY, WE ARE OF THE VIEW THAT NO DOU BT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE HAS BEEN FORWARDED T O THE ASSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING OFFICER HAS ALSO OB JECTED FOR ADMISSION OF ADDITIONAL EVIDENCE ON THE GROUND THAT THE AMOUNT I N DISPUTE HAS BEEN PAID BEYOND THE DUE DATE OF FILING THE RETURN I.E. 30.09 .2009, WHICH WAS PAID IN NOVEMBER, 2009. THE ASSESSING OFFICER FURTHER OBJEC TED REGARDING UNCLAIMED/UNPAID DIVIDEND AND STATED THAT NO EVIDEN CE AS TO THE FACT THAT SAME WAS NOT CLAIMED AS AN EXPENSE WAS FILED AND TH E AMOUNT CLEARLY ATTRACTED THE PROVISIONS OF SECTION 41(1) OF THE AC T. AS FAR AS NON-ALLOWANCE 6 OF DEDUCTION UNDER SECTION 80P(2) OF THE ACT ON THE AMOUNT OF UNPAID DIVIDEND AS ADDED BY ASSESSING OFFICER IS CONCERNED , THE ASSESSING OFFICER STATED THAT IT WAS NOT ALLOWABLE AS THE ASSESSEE HA D FILED INACCURATE PARTICULARS OF INCOME. WE FIND THAT LEARNED FIRST A PPELLATE AUTHORITY HAS NOT GIVEN ANY DETAILS/PARTICULARS OF ADDITIONAL EVIDENC E IN THE IMPUGNED ORDER WHICH COULD ESTABLISH THE IMPORTANCE OF ADDITIONAL EVIDENCE FOR DECIDING THE ISSUE IN DISPUTE. THEREFORE, ADMISSION OF ADDITIONA L EVIDENCE IS CONTRARY TO RULE 46A OF THE I.T. RULES, 1962. WE MAY MENTION HE RE THAT EVEN BEFORE US NO ONE HAS FILED ANY PAPER BOOK ESTABLISHING THE IM PORTANCE OF ADDITIONAL EVIDENCE ON THE ISSUE IN DISPUTE. 8. IN THE INTEREST OF JUSTICE AND KEEPING IN VIEW T HE PROVISIONS OF RULE 46A OF THE I.T. RULES, 1962, WE ARE CANCELLING THE IMPUGNED ORDER AND REMITTING BACK THE ISSUE IN DISPUTE TO LEARNED FIRS T APPELLATE AUTHORITY TO DECIDE THE SAME BY PASSING A DETAILED ORDER AS WELL AS BY ELABORATELY DISCUSSING ABOUT THE ADDITIONAL EVIDENCE IN VIEW OF RULE 46A OF THE I.T. RULES. 9. THE ADDITIONAL EVIDENCE ADMITTED BY LEARNED FIRS T APPELLATE AUTHORITY HAS AFFECTED THE DELETION OF ADDITION IN DISPUTE. T HEREFORE, THE IMPUGNED ORDER DESERVES TO BE CANCELLED. ACCORDINGLY, WE CAN CEL THE IMPUGNED ORDER AND ALLOW THE APPEAL FILED BY THE REVENUE WITH THE DIRECTION TO LEARNED FIRST 7 APPELLATE AUTHORITY TO DECIDE THE ISSUE IN DISPUTE AFRESH AS DISCUSSED ABOVE, IN ACCORDANCE WITH LAW, AFTER GIVING FULL OPPORTUNI TY TO THE PARTIES. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JUNE, 2013 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH JUNE, 2013 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEES: THE PHILLAUR PRIMARY CO-OP AGRI, DE V. BANK LTD. GORAYA TEH. PHILLAUR, PHAGWARA 2. DEPUTY COMMISSIONER OF INCOME TAX, PHAGWARA CIRCLE, PHAGWARA 3. THE CIT(A), JALANDHAR 4. THE CIT, JALANDHAR 5. THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.