ITO Ward 2, Puducherry V. Saranya Agro Foods (P) Ltd., Pondicherry

ITA 914/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4439 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 16-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Notional interest; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! ' , $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.914/CHNY/2018 ( )( / ASSESSMENT YEAR : 2014-15 THE INCOME TAX OFFICER, WARD 2, PUDUCHERRY. V. M/S SARANYA AGRO FOODS (P) LTD., NO.34, 2 ND CROSS, KURINJI NAGAR, LAWPET, PONDICHERRY 605 008. PAN : AAQCS 3731 D (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI AR.V. SREENIVASAN, JCIT -.+, / 0 / RESPONDENT BY : NONE 1 / 2$ / DATE OF HEARING : 21.02.2019 34) / 2$ / DATE OF PRONOUNCEMENT : 21.03.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY, D ATED 27.12.2017 AND PERTAINS TO ASSESSMENT YEAR 2014-15. 2. THERE WAS A DELAY OF 11 DAYS IN FILING THIS APPE AL BY THE REVENUE. THE REVENUE HAS FILED A PETITION FOR CONDONATION OF DELAY. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEA L BEFORE THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT TH E APPEAL. 2 I.T.A. NO.914/CHNY/18 3. NO ONE APPEARED FOR THE ASSESSEE INSPITE OF SERV ICE OF NOTICE. THE LD. D.R. HAS PRODUCED COPY OF ACKNOWLEDGEMENT A S PROOF OF SERVICE OF NOTICE ON THE ASSESSEE. THEREFORE, WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PROCEEDED TO DISPOSE THE APPEAL ON MERIT. 4. SHRI AR.V. SREENIVASAN, THE LD. D.R. SUBMITTED T HAT THE ASSESSING OFFICER FOUND THAT THERE WAS SUPPRESSION OF SALES TO THE EXTENT OF 74,70,000/-. MOREOVER, THE ASSESSING OFFICER HAS A LSO MADE ADDITION OF 66,95,223/- TOWARDS INTEREST. ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS SUPPR ESSED THE TURNOVER. THE ASSESSEE BORROWED LOAN AND PAID INTEREST. HOWE VER, THE ASSESSEE ADVANCED MONEY WITHOUT CHARGING ANY INTEREST. THER EFORE, ACCORDING TO THE LD. D.R., THE NOTIONAL INTEREST WAS ALSO BROUGH T FOR TAXATION. REFERRING TO THE ORDER OF THE CIT(APPEALS), THE LD. D.R. SUBMITTED THAT THE ASSESSEE FILED BREAK UP OF SALES TO SUNDRY DEBT ORS BEFORE THE CIT(APPEALS). THEREFORE, ACCORDING TO THE LD. D.R. , THERE WAS A GROSS VIOLATION OF RULE 46A OF THE INCOME-TAX RULES, 1962 . WITH REGARD TO INTEREST ALSO, THE ASSESSEE FILED ADDITIONAL EVIDEN CE BEFORE THE CIT(APPEALS). THE CIT(APPEALS) WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF THE ASSE SSEE. THEREFORE, ACCORDING TO THE LD. D.R., THE MATTER MAY BE REMITT ED BACK TO THE FILE OF THE ASSESSING OFFICER. 3 I.T.A. NO.914/CHNY/18 5. WE HEARD THE SUBMISSION OF LD. D.R. AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. 6. ADMITTEDLY, THE SUPPRESSION OF TURNOVER AS WELL AS DISALLOWANCE OF NOTIONAL INTEREST WERE ALLOWED BY THE CIT(APPEALS) ON THE BASIS OF ADDITIONAL MATERIAL FILED BY THE ASSESSEE BEFORE HI M. THE MATERIAL THAT WAS PRODUCED BEFORE THE CIT(APPEALS) APPARENTLY WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER. THE CIT(APPEALS) WIT HOUT CALLING FOR ANY REPORT FROM THE ASSESSING OFFICER OR WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER ALLOWED THE CLAIM OF THE ASSESSEE . THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS A CLEAR VIOLATION OF RULE 46A OF THE INCOME-TAX RULES, 1962. HENCE, THE ASSE SSING OFFICER HAS TO RE-EXAMINE THE ISSUE ON THE BASIS OF MATERIAL THAT WAS FILED BEFORE THE ASSESSING OFFICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE OF DISALLOWANCE OF NOTIONAL INTEREST AND SUPPRESSION OF SALES IS REMITTED BACK TO THE FILE O F THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER O N THE BASIS OF THE MATERIAL THAT MAY BE FILED BY THE ASSESSEE, INCLUDI NG THE MATERIAL WHICH WAS FILED BEFORE THE CIT(APPEALS), AND THEREAFTER D ECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE O PPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. 4 I.T.A. NO.914/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 21 ST MARCH, 2019 AT CHENNAI. SD/- SD/- ( ! ' ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 21 ST MARCH, 2019. KRI. / -278 98)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 :2 () /CIT(A), PUDUCHERRY 4. PRINCIPAL CIT, PUDUCHERRY 5. 8; -2 /DR 6. <( = /GF.