The Jute Corporation of India Limited., Kolkata V. Addl C.I.T Rg - 1,kolkata, Kolkata

ITA 863/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1937 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 27-03-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 19-04-2013
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Assessee Lawyers: B SYAM
• Keywords: Business income; Business expenditure; Opportunity of being heard; Corroborative evidences
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI M.BA LAGANESH, AM] I.T.A NOS. 863&864/KO L/2013 ASSESSMENT YEAR : 2005-0 6 THE JUTE CORPORATION OF INDIA LTD. -VS.- A .C.I.T., RANGE-1, KOLKATA KOLKATA [PAN : AABCT 8820 B] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI B.SYAM, FCA FOR THE RESPONDENT : SHRI RAJAT KUMAR KUREEL, JCIT, SR.DR DATE OF HEARING : 27.03.2017. DATE OF PRONOUNCEMENT : 05.04.2017. ORDER PER N.V.VASUDEVAN, JM ITA.NO.863/KOL/2013 IS AN APPEAL BY THE ASSESSEE A GAINST THE ORDER DATED 01.02..2013 OF C.I.T.(A)-XX, KOLKATA RELATING TO A .Y.2005-06. THIS APPEAL ARISES OUT OF AN ORDER OF ASSESSMENT PASSED FOR A.Y.2005-06 U/ S 143(3) OF THE INCOME TAX ACT, 1961 (ACT). ITA NO.864/KOL/2013 IS ALSO AN APPEAL BY THE ASSES SEE AGAINST THE ORDER DATED 01.02..2013 OF C.I.T.(A)-XX, KOLKATA RELATING TO A .Y.2005-06. THIS APPEAL ARISES OUT OF AN ORDER OF ASSESSMENT PASSED FOR A.Y.2005-06 U/ S 144 R.W.S. 147 OF THE ACT. ITA NO.863/KOL/2013 (A.Y.2005-06): 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS FOLLOWS :- 1) FOR THAT THE LD. CIT (A), WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF RS.2,24,743/- FOR PAYMENTS MADE BY THE APPELLANT TO STAFF WELFARE CLUB TO RUN SUBSIDIZED CANTEEN WITHIN THE OFFICE PREMISES OF TH E CORPORATION. AS CLAIMED BY 2 ITA NOS.863&864/KOL/2013 THE JUTE CORPORATION OF INDIA LTD. A.YR.2005-06 2 APPELLANT THAT SUCH WAS A GENUINE BUSINESS EXPENDIT URE CONDUCTED FOR REGULAR OPERATION. 2) AS POINTED OUT DURING REGULAR HEARING AND ALSO I N WRITTEN REPRESENTATION THAT THERE WAS A DIFFERENCE OF RS. 43, 11,116/- IN CONSI DERING OPENING BALANCE OF BUSINESS PROFITS IN THE ASSESSMENT ORDER PASSED BY AO. AO HAS CONSIDERED PROFIT OF RS. 2,83,74,022/- IN HIS ORDER WHEREAS PROFIT AS PE R AUDITED ACCOUNTS WERE 2,40,62,906/-. SO THIS ARISE A DIFFERENCE OF RS.43, 11,116 IN CONSIDERING BUSINESS INCOME. CIT(A) IN HIS ORDER HAS FAILED TO ADDRESS THE GROUND RAISED BY APPELLANT TO THE ISSUE. 3) FOR THAT THE LD CIT(A) WAS NOT JUSTIFIED IN ACTI ON TO RESTRAIN FROM DIRECTING AO TO ACKNOWLEDGE CLAIMS MADE BY APPELLANT TO ALLOW BE NEFITS OF CARRY FORWARD BUSINESS LOSSES OF EARLIER YEARS. 4) FOR THAT THE APPELLANT CRAVES LEAVE TO ALTER, MO DIFY OR AMEND ANY OF THE ABOVE GROUND/S AND TO ADD FURTHER GROUND/S ON OR BEFORE T HE FINAL HEARING OF THIS APPEAL. 3. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN T HE BUSINESS OF PURCHASE AND SALE OF JUTE. FOR A.Y.2005-06 THE ASSESSEE FILED RETURN OF INCOME DISCLOSING THE TOTAL INCOME OF RS.2,21,49,328/-. IN THE COURSE OF ASSESSMENT PROCE EDINGS THE AO NOTICED THAT THE ASSESSEE WHILE COMPUTING INCOME FROM BUSINESS HAS C LAIMED DEDUCTION OF A SUM OF RS.3,14,39,281/- UNDER THE HEAD PRIOR PERIOD EXPE NSES. ACCORDING TO THE AO SINCE THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACC OUNTING AND THE PRIOR PERIOD EXPENSES DID NOT PERTAIN TO THE PREVIOUS YEAR RELAT ING TO A.Y.2005-06, THEY CANNOT BE ALLOWED AS DEDUCTION WHILE COMPUTING THE INCOME. TH E PLEA OF THE ASSESSEE WAS THAT THE AFORESAID EXPENSES THOUGH TITLED AS PRIOR PERIOD EX PENSES ACCRUED AND AROSE ONLY DURING THE PREVIOUS YEAR AND THEREFORE THE CLAIM OF THE AS SESSEE FOR DEDUCTION SHOULD BE ACCEPTED. ACCORDING TO THE AO THE ASSESSEE COULD NO T PRODUCE ANY DOCUMENTS OR EVIDENCE OR SUPPORTING PAPERS IN RESPECT TO THE CLA IM OF THOSE EXPENSES ACCRUED OR AROSE ONLY DURING THE PREVIOUS YEAR. THE AO ACCORDINGLY A DDED THE PRIOR PERIOD EXPENSES TO THE TOTAL INCOME OF THE ASSESSEE. 3 ITA NOS.863&864/KOL/2013 THE JUTE CORPORATION OF INDIA LTD. A.YR.2005-06 3 4. BEFORE CIT(A) THE ASSESSEE EXPLAINED THE VARIO US ITEMS OF PRIOR PERIOD EXPENSES. IN THIS APPEAL WE ARE CONCERNED WITH ONLY TWO ITEMS O UT OF THE TOTAL PRIOR PERIOD EXPENSES OF RS. 3,14,39,281/- NAMELY PAYMENT MADE TO STAFF W ELFARE CLUB OF RS.2,24,743/- AND DIFFERENCE IN REPORTED PROFIT AND PROFIT TAKEN IN T HE ASSESSMENT ORDER OF RS.43,11,116/-. THE ASSESSEE EXPLAINED THESE TWO ITEMS BEFORE CIT(A ) WITH SUPPORTING EVIDENCE AS FOLLOWS :- SL.NO. ITEM OF EXPENSES DISALLOWED AMOUNT OF PRIOR PERIOD EXPENSES (RS.) DETAILS OF EXPENDITURE SUPPORTING ATTACH 1. PAYMENT MADE TO STAFF WELFARE CLUB 2,24,743/- THIS COMPRISES CANTEEN SUBSIDY OF RS.1,89,000/- AND MATCHING GRANT THEREON RS.35,743 THIS MONTHLY CONTRIBUTION IS FOR RUNNING A STAFF CANTEEN (SUBSIDIZED) AND MATCHING GRANT THEREON DETAILS OF PAYMENT VOUCHERS ANNEXURE-4 2. DIFFERENCE IN REPORTED PROFIT AND PROFIT TAKEN IN ASSESSMENT ORDER RS;.43,11,116 PROFIT AS PER ASSESSMENT ORDER RS.2,83,74,022 (PROFIT AS PER PROFIT & LOSS ACCOUNT RS.2,4062,906) AO HAS CONSIDERED WRONG AMOUNT WHILE COMPUTING ASSESSED INCOME WITHOUT TAKEN INTO CONSIDERATION AUDITED ACCOUNTS ALREADY SUBMITTED AUDITED ACCOUNTS FOR 2003-04 A PERUSAL OF THE ORDER OF CIT(A) SHOWS THAT HE HAS NOT EXAMINED THE CLAIM OF ASSESSEE AS MADE BEFORE HIM AS AFORESAID ON THE AFORESAID TW O ITEMS OF PRIOR PERIOD EXPENSES. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE HAS P REFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL RAISING THE GROUNDS OF APPEAL SET OUT IN THE EARLIER PART OF THIS ORDER. 4 ITA NOS.863&864/KOL/2013 THE JUTE CORPORATION OF INDIA LTD. A.YR.2005-06 4 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS CLEAR FROM A PERUSAL OF THE ORDER OF CIT(A) THAT BOTH THE AFORESAID CLAIMS MADE BY THE A SSESSEE WITH SUPPORTING EVIDENCE BEFORE CIT(A) HAS NOT BEEN EXAMINED BY CIT(A). IN THESE CIRCUMSTANCES IT WOULD BE JUST AND PROPER TO DIRECT THE CIT(A) TO EXAMINE THE CLAIM OF ASSESSEE IN THIS REGARD. ACCORDINGLY ORDER OF CIT(A) IS SET ASIDE TO THE LIM ITED EXTENT OF THE AFORESAID TWO ITEMS OF PRIOR PERIOD EXPENSES, WITH A DIRECTION TO CIT (A) TO DECIDE THE CLAIM OF ASSESSEE AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. FOR STATISTICAL PURPOSES THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. 6. IN THE RESULT ITA NO.863/KOL/2013 IS ALLOWED F OR STATISTICAL PURPOSES. ITA NO.864/KOL/2013 (A.Y.2005-06): 7. GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS FOLLOWS :- 1) FOR THAT THE LD. CI.T (A), WAS NOT JUSTIFIED I N REJECTING THE CLAIM OF RS.17,79,489/- FOR PROVISION MADE TOWARDS LEAVE ENC ASHMENT EXPENSES PAYABLE TO EMPLOYEES OF THE CORPORATION. AS CLAIMED BY APPELLA NT THAT SUCH WAS A GENUINE BUSINESS EXPENDITURE CONDUCTED FOR REGULAR OPERATIO N. 2) FOR THAT THE LD. CIT (A), WAS NOT JUSTIFIED IN P ARTLY ALLOWING CLAIM OF RS.2,14,03,080 /- OUT OF TOTAL CLAIM OF RS.2,31,13, 710/- PROVIDED BY THE APPELLANT ON ACCOUNT OF ANTICIPATED CLAIMS FROM ITS CUSTOMERS DUE TO WEIGHT LOSS AND MOISTURE LOSS ON RAW JUTE DELIVERED TO CUSTOMERS IN THE ORDINARY COURSE OF ITS BUSINESS. AS HAS BEEN REPRESENTED DURING HEARING TH AT CONSIDERING THE NATURE OF TRADE SUCH LOSSES IS INEVITABLE AND SHOULD BE ALLOW ED IN FULL AS PROVISION HAS BEEN MADE ON REASONABLE AND LOGICAL BASIS AND BEEN FOLLO WED ON CONSISTENT BASIS OVER THE YEARS. 3) FOR THAT THE APPELLANT CRAVES LEAVE TO ALTER, MO DIFY OR AMEND ANY OF THE ABOVE GROUND/S AND TO ADD FURTHER GROUND/S ON OR BEFORE T HE FINAL HEARING OF THIS APPEAL. 8. AS FAR AS GROUND NO.1 IS CONCERNED THE ISSUE IS WITH REGARD TO ALLOWING DEDUCTION ON ACCOUNT OF PROVISION MADE FOR LEAVE ENCASHMENT. TH E ASSESSEE HAD DEBITED A SUM OF 5 ITA NOS.863&864/KOL/2013 THE JUTE CORPORATION OF INDIA LTD. A.YR.2005-06 5 RS.17,79,489/- IN THE PROFIT AND LOSS ACCOUNT ON AC COUNT OF LEAVE ENCASHMENT WHICH WAS OUTSTANDING ON 31.03.2005. UNDER THE PROVISION OF S ECTION 43B(F) OF THE ACT ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER IN LIEU OF A NY LEAVE AT THE CREDIT OF HIS EMPLOYEE SHALL BE ALLOWED AS DEDUCTION IN COMPUTING THE TOTA L INCOME ONLY IN THE YEAR IN WHICH THE SUM IS ACTUALLY PAID BY HIM. IN OTHER WORDS, TH E DEDUCTION ON ACCOUNT OF EXPENDITURE IN THE FORM OF LEAVE ENCASHMENT PAID BY AN EMPLOYER TO THE EMPLOYEE CANNOT BE ALLOWED ON THE BASIS OF THE PROVISION MAD E IN THE BOOKS OF ACCOUNT OR ON THE BASIS OF ACCRUAL UNDER THE MERCANTILE SYSTEM OF ACC OUNTING AND WILL BE ALLOWED ONLY TO THE EXTENT THE LEAVE ENCASHMENT IS ACTUALLY PAID TO THE EMPLOYEE BY THE EMPLOYER. THE AO AND CIT(A) THEREFORE DENIED THE CLAIM OF THE ASS ESSEE FOR DEDUCTION OF THE AFORESAID SUM. 9. THE PLEA OF THE ASSESSEE WAS THAT SINCE SECTION 43B(F) OF THE ACT WAS DECLARED UNCONSTITUTIONAL BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF EXIDE INDUSTRIES LIMITED VS UOI 292 ITR 470 (CAL) PROVISION FOR LEAV E ENCASHMENT THUS BASED ON PROPER ESTIMATE IS A CERTAIN LIABILITY AND SHOULD BE ALLOW ED AS DEDUCTION. AGAINST THE DECISION OF THE HONBLE CALCUTTA HIGH COURT, THE REVENUE HAS PREFERRED APPEAL BEFORE THE HONBLE SUPREME COURT AND THE SAID APPEAL HAS BEEN ADMITTED FOR ADJUDICATION, AND THE OPERATION OF THE ORDER OF THE HONBLE HIGH COURT OF CALCUTTA HAS BEEN STAYED BY THE HONBLE SUPREME COURT. THE LEARNED DR RELIED ON T HE CIRCUMSTANCE THAT THE HONBLE CALCUTTA HIGH COURT DECISION HAS BEEN STAYED BY THE HONBLE SUPREME COURT. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE A RE OF THE VIEW THAT IN VIEW OF THE PENDENCY OF THE CONSTITUTIONAL VALIDITY OF SECTION 43B(F) OF THE ACT BEFORE THE HONBLE SUPREME COURT, IT WOULD BE JUST AND PROPER TO DIREC T THE AO TO FOLLOW THE ULTIMATE DECISION THAT MIGHT BE TAKEN IN THE SAID PROCEEDING S AND DECIDE THE GRIEVANCE PROJECTED BY THE ASSESSEE IN THIS APPEAL. THUS THE APPEAL FIL ED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6 ITA NOS.863&864/KOL/2013 THE JUTE CORPORATION OF INDIA LTD. A.YR.2005-06 6 11. AS FAR AS GROUND NO.2 RAISED BY THE ASSESSEE I S CONCERNED IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSE SSEE HAD DEDUCTED FROM THE GROSS SALES FIGURE 2.5% OF THE GROSS SALES AND ONLY THE R EMAINING SALES WAS ALONE CREDITED TO THE PROFIT AND LOSS ACCOUNT. THE CLAIM OF THE ASSES SEE BEFORE AO WAS THAT 2.5% OF THE GROSS SALES WAS AN ESTIMATE ON FUTURE CLAIMS BY THE CUSTOMERS FROM THE ASSESSEE FOR SHORT QUANTITY OR INFERIOR QUALITY OF THE JUTE SOLD . THE AO ALSO NOTICED THAT THE SUM SO DEDUCTED WAS TRANSFERRED TO A PROVISION ACCOUNT AND THAT THE PROVISION ACCOUNT WAS SHOWN IN THE BALANCE SHEET WITHOUT ANY UTILIZATION. IT WAS THE CLAIM OF THE ASSESSEE THAT THE AMOUNT DEDUCTED FROM THE GROSS SALES FIGURE WAS AN ANTICIPATED FUTURE LIABILITY OF THE ASSESSEE AND WAS TO BE ALLOWED AS A DEDUCTION. THE ASSESSEE POINTED OUT THAT THE PROVISION FOR CLAIMS ACCOUNT STOOD AT RS.231.13 LAK HS AS ON 31.03.2005. DURING THE PREVIOUS YEAR THE MAJOR PORTION WAS PAID AND THE BA LANCE IN ITS ACCOUNT WAS ONLY A SUM OF RS.14.42 LAKHS. THE ASSESSEE ALSO PRODUCED A LIS T OF CLAIMS PAYABLE AS ON 31.03.2005, 31.03.2006 AND 31.03.2007 AND THE NAME OF THE CUSTO MERS ETC. 12. ACCORDING TO THE AO ONCE A SALE BILL WAS DRAWN ON A CUSTOMER AND THE CUSTOMER RECOGNIZES IT, SALE IS COMPLETE AND REVENUE IS REQUIRED TO BE RECOGNIZED ON THE WHOLE BILL VALUE AS TOTAL SALE VALUE AS PER ACCOUNTING ST ANDARD AND THAT NO PART OF THE SALE CAN BE SET APART FOR DISCHARGING ANY LIABILITY AND SUCH PRACTICE IS NOT PERMISSIBLE IN ACCOUNTANCY AND IN LAW. THE AO ALSO GAVE THE FOLLOW ING FINDINGS :- THE IMPUGNED PROVISION FIGURES AS SHOWN BY THE AS SESSEE NEED SEPARATE ATTENTION. IT IS SAID IN EARLIER PARA THAT THESE PART OF SALE TAKEN OUT FOR FUTURE EXPENDITURE BUT REMAINED UNSPENT AT THE END OF THE YEAR. UNSPENT/UNUTILIZED AMOUNT AS ON 31.03.2005 RELATED TO FINANCIAL YEAR 2001-02 RS. 547861/- RELATED TO FINANCIAL YEAR 2002-03 RS.4938266/- RELATED TO FINANCIAL YEAR 2003-04 RS.2700425/- RELATED TO FINANCIAL YEAR 2005-06 RS.23113710/- IT IS SEEN THAT SUCH UNUTILIZED AMOUNTS AT THE END OF THE YEAR ARE NOT WRITTEN BACK AND NO REVERSE ENTRY IS PASSED IN THE BOOKS. IT IND ICATES THAT A PART OF THE SALE REMAINED UNCHARGED TO TAX IN EACH AND EVERY YEAR. T HERE IS NO BASIS DISCLOSED BY THE ASSESSEE BY WHICH THIS SO CALLED PROVISION IS C ALCULATED. THERE IS NO RATIONALE 7 ITA NOS.863&864/KOL/2013 THE JUTE CORPORATION OF INDIA LTD. A.YR.2005-06 7 FOUND BEHIND ITS HEALTHY INCREMENT YEAR AFTER YEAR. THE CLAIM HAVING NO SCIENTIFIC AND RELIABLE BASIS IS NOT ACCEPTABLE. IT IS SIMPLY UNDERSTATEMENT OF SALE IN THE DISGUISE OF CERTAIN UNFORESEEN LIABILITY. IT IS ALSO TO BE CONSIDERED THAT WHEN THERE W AS NO OBLIGATION CAST ON THE ASSESSEE ON THE DATE OF SALE AND IN ABSENCE OF ANY COMPARISON TO MAKE A PROVISION FOR AN UNCRYSTALLIZED OR UNCERTAIN LIABILITY, THE A SSESSEE WAS NOT ENTITLED TO THE BENEFIT OF DEDUCTION. IT IS IMPRESSED ON THE FACT T HAT THE CONTINGENT LIABILITY, BY ITS VERY NATURE, CANNOT HAVE A PROVISION FOR PURPOSE OF DEDUCTION. IN THE ABSENCE OF CERTAINTY OF THE LIABILITY AND CERTAINTY OF AN EVEN T TO INCUR THE LIABILITY, A PROVISION CAN NOT GO FOR DEDUCTION. LIABILITY FOR EXPENDITURE MAY ACCRUE OR ARISE IN THE HANDS OF THE ASSESSEE IN FUTURE WHEN A CLAIM FOR CUSTOMER IS RECOGNIZED AND SUCH AN EVENT MAY DEPEND UPON VARIOUS CONTINGENT FACTORS. MOREOVE R, ASSESSEE HAS NOT SUBMITTED ANY DETAIL AS REGARDS PREVIOUS PATTERN OF EXPENDITU RE ON ACCOUNT OF SUCH LIABILITY TO MAINTAIN A PROVISION. THE RIGHT TO INCUR EXPENDITUR E AT THE POINT OF SALE DOES NOT ARISE IN ASSESSEE'S CASE. WITH THESE OBSERVATIONS, THE CLAIM IS DISALLOWED AND RS. 2,31 ,13,710/ IS ADDED TO THE INCOME OF THE ASSESS EE. 13. BEFORE CIT(A) THE ASSESSEE REITERATED ITS CLAI M AS WERE MADE BEFORE AO. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE TO THE EXT ENT OF RS.2,14,03,080/- WHICH WAS THE ACTUAL PAYMENT MADE BY THE ASSESSEE TO ITS CUST OMERS. IN OTHER WORDS, CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION FRO M THE SALE VALUE TO THE EXTENT THE PROVISION FOR FUTURE CLAIMS WAS DISCHARGED BY THE A SSESSEE BY ACTUAL REFUND TO THE CUSTOMERS. THE FOLLOWING ARE THE OBSERVATIONS OF CI T(A) IN THIS REGARD :- 5-2 I HAVE PERUSED THE ASSESSMENT ORDER AND CONSI DERED THE SUBMISSION OF THE APPELLANT. THE FACT OF THE CASE IS THAT THE APPELLA NT MADE PROVISION TO MEET FUTURE CLAIM, IF ANY, FROM CUSTOMERS FOR SHORT WEIGHT AND QUALITY CLAIMS. I AGREE WITH THE DECISION OF THE A.O. THAT WHEN THERE WAS NO OBLIGAT ION CAST ON THE APPELLANT ON THE DATE OF SALE OR DURING THE YEAR UNDER CONSIDERATION , MAKING ANY PROVISION OR CLAIMING ANY EXPENDITURE WHICH IS YET TO BE CRYSTAL LIZED IS NOT CORRECT. BEFORE ME, THOUGH THE APPELLANT MENTIONED THE AMOUNTS AND PERC ENTAGE OF SUCH CLAIMS FROM 2001-02 ONWARDS, HOWEVER, THEY COULD NOT GIVE THE C OMPLETE DETAILS OF ACTUAL AMOUNT ASCERTAINED YEAR TO YEAR BASIS WITH REGARD T O CLAIM OF THE APPELLANT AND ACTUAL CLAIMS RECEIVED FROM THE CUSTOMERS FOR SHORT WEIGHT AND QUALITY. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSE D ABOVE, A CLAIM OF CONTINGENT OR UNASCERTAINED LIABILITY IS NOT FOUND TO BE ALLOWABL E. HOWEVER, THE. SIMILAR ISSUE IN THE APPELLANT'S OWN CASE WAS DECIDED BY THE CIT(A)- XXIV, KOLKATA VIDE HIS APPEAL NO. 1150/CIT(A)-XXIV/C-1/12-13 DATED 31.12.2 012 FOR THE A.Y. 2009-10 8 ITA NOS.863&864/KOL/2013 THE JUTE CORPORATION OF INDIA LTD. A.YR.2005-06 8 IN WHICH HE ALLOWED THE ACTUAL PAYMENT MADE BY THE APPELLANT ON THIS ISSUE HUT DISALLOWED THE CLAIM OF PROVISION. I AGREE WITH THE VIEW TAKEN BY THE CIT(A)- XXIV, KOLKATA, THEREFORE, THE APPEAL ON THIS GROUND IS PARTLY ALLOWED BY WHICH THE A.O. IS DIRECTED TO ALLOW THE ACTUAL PAYMENT MADE B Y THE APPELLANT OF RS.2,14,03,080/- AGAINST THEIR LIABILITY AND DISALL OW THE PROVISION MADE BY THEM OF RS.2,31,13,710/-. 14. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE HAS RAISED GROUND NO.2 BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS AS WERE MADE BEFORE AO AND CIT(A). WE ARE OF THE VIEW THAT ORDER OF CIT(A) ON THIS ISSUE DOES NOT CALL FOR ANY INTERFERENCE. THE GENUINENESS OF THE E XPENDITURE IS NOT RELEVANT AT THIS POINT OF TIME . THE QUESTION FOR CONSIDERATION IS AS TO W HETHER THE LIABILITY OF THE ASSESSEE TO REFUND TO ITS CUSTOMERS OWING TO LOSS OF WEIGHT OR QUALITY WAS A CONTINGENT LIABILITY. IN OUR VIEW SUCH LIABILITY WAS DEFINITELY CONTINGENT A ND IT WAS DEPENDENT ON THE CLAIM BEING MADE BY THE CUSTOMER FOR IMPROPER WEIGHT AND IMPROPER QUALITY OF THE PRODUCT. THE FACTUAL POSITION IS THAT THE ASSESSEE COULD NOT SUBSTANTIATE AS TO HOW THE AMOUNTS DISALLOWED CRYSTALLIZED AS LIABILITY DURING THE PRE VIOUS YEAR BY THE CUSTOMERS MAKING A CLAIM BY THE ASSESSEE. IN SUCH CIRCUMSTANCES WE ARE OF THE VIEW THAT NO FAULT COULD BE FOUND IN THE ORDER OF CIT(A) ON THIS ISSUE. ACCORDI NGLY GROUND NO.2 RAISED BY THE ASSESSEE IS DISMISSED. 15. IN THE RESULT ITA NO.864/KOL/2013 IS PARTLY AL LOWED FOR STATISTICAL PURPOSES. 16. IN THE RESULT ITA NO.863/KOL/2013 IS ALLOWED F OR STATISTICAL PURPOSES AND ITA NO.864/KOL/2013 IS PARTLY ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED IN THE COURT ON 05.04.2017. SD/- SD/- [M.BALAGANESH ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 05.04.2017. [RG PS] 9 ITA NOS.863&864/KOL/2013 THE JUTE CORPORATION OF INDIA LTD. A.YR.2005-06 9 COPY OF THE ORDER FORWARDED TO: 1. THE JUTE CORPORATION OF INDIA LTD., HUDCO BUILDI NG, 7 TH FLOOR, 15N, NELLIE SENGUPTA SARANI, KOLKATA-700087. 2. A. C.I.T., RANGE-1, KOLKATA. 3. CIT(A)-XX, KOLKATA 4. C.I.T.-I, KOLKAT A. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES