Sanjay Lodha, V. ACIT,

ITA 97/RAN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85437 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 07-11-2013
• Court: TRIBUNAL
• Department Lawyers: CHOUDHARY ORAM JCITLD
• Assessee Lawyers: S K PODDAR; M K CHOUDHARY ADVOCTES LD

Judgement Text

1 ITA NO.97/RAN/13 SANJAY LODHA INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, RANCHI BEFORE HON'BLE SHRI H.L. KARWA, PRESIDENT , AND HON'BLE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 97 /RAN/1 3 A.Y 200 8 - 09 SANJAY LODHA, DHANBAD VS. ACIT, RANGE - 2, DHANB AD PAN: A AZPL3559L ( APPELLANT ) ( RESPONDENT ) FOR THE APPELLANT : S/ SHRI S.K PODDAR & M.K CHOUDHARY, ADVOCTES , LD.AR S FOR THE RESPONDENT : SHRI CHOUDHARY ORAM, JCIT/LD.DR DATE OF HEARING : 25 - 11 - 2014 DATE OF PRONOUNCEMENT: - 11 - 2014 ORDER SHRI B.R. BASKARAN, ACCOUNTANT MEMBER : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 07 - 08 - 2013 PAS SED BY LD CIT(A), DHANBAD FOR ASSESSMENT YEAR 2008 - 09 IN RESPECT OF THE FOLLOWING ISSUES: - ( A ) REDUCTION OF FREIGHT CHARGES OF RS.2,12,000/ - FROM THE PROFIT OF PARAWANOO UNIT. ( B ) REDUCTION OF COMMISSION EXPENSES OF RS.3,45,261/ - FROM THE PROFIT OF PARAWANOO UNI T. 2. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. WE NOTICE THAT THE PARAWANOO UNIT OWNED BY THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. THE AO, HOWEVER, REDUCED THE ABOVE SAID EXPENSES FROM THE PROFIT OF PARAWANOO UNIT AND A CCORDINGLY ALLOWED DEDUCTION U/S 80IC OF THE ACT. THE SUBMISSION OF THE ASSESSEE IS THAT THE FREIGHT CHARGES FOR THE GOODS TRANSPORTED BETWEEN THE UNITS OF THE ASSESSEE ARE CONSISTENTLY BOOKED AT THE END OF THE UNIT 2 ITA NO.97/RAN/13 SANJAY LODHA WHICH TRANSFERRED THE GOODS. ACCORDING LY, THE A.R SUBMITTED THAT THE ABOVE SAID FREIGHT CHARGES PERTAINS TO THE GOODS TRANSPORTED FROM THE DELHI UNIT AND HENCE THE SAME HAS TO BE CHARGED IN DELHI UNIT. WITH REGARD TO THE COMMISSION EXPENSES, THE LD A.R SUBMITTED THAT THE GOODS PRODUCED BY THE PARAWANOO ARE SOLD THROUGH THE BANGALORE UNIT. HE FURTHER SUBMITTED THAT THE GOODS ARE TRANSFERRED TO THE BANGALORE UNIT BY MARKING UP THE PROFIT AND THE BANGALORE UNIT PAYS COMMISSION FOR SELLING THE GOODS FROM ITS END . HE FURTHER SUBMITTED THAT THE BA NGALORE UNIT HAS MADE PROFIT EVEN AFTER PAYING THE COMMISSION, AS THE SAID PAYMENT IS INSTRUMENTAL IN INCREASING THE SALES. ACCORDINGLY HE SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ALLOCATING PART OF COMMISSIO N EXPENSES TO PARAWANOO UNIT A ND ALSO THE FREIGHT CHARGES REFERRED ABOVE FOR COMPUTING THE AMOUNT ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. 3. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS BEEN CONSISTELY ADOPTING THE SAME ACCOUNTING PRACTICE FOR THE PAST SEVERAL YEARS AND ALSO IN T HE SUBSEQUENT YEARS ALSO. HE SUBMITTED THAT THE ASSESSING OFFICER HAS ACCEPTED THE SAID ACCOUNTING PRACTICE IN ALL OTHER YEARS. ACCORDINGLY HE SUBMITTED THAT THE TAX AUTHORITIES ARE NOT JUSTIFIED IN DEVIATING FROM THE STANDARD PRACTICE FOLLOWED BY THE AS SESSEE IN THE INSTANT YEAR ALONE. 4. ON THE CONTRARY, THE LD D.R PLACED RELIANCE ON THE ORDER OF LD CIT(A). 5. HAVING HEARD RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THERE IS NO NECESSITY TO DEVIATE FROM THE STANDARD ACCOUNTING PRACTICE FOLLOWED BY THE ASSESSEE. IN FACT, THE LD A.R SUBMITTED THAT THE PARAWANOO UNIT HAS BOOKED FREIGHT CHARGES OF ABOUT RS.9.00 LAKHS IN RESPECT OF THE GOODS TRANSPORTED FROM ITS PLACE TO OTHER UNITS OF THE ASSESSEE AND ACCORDINGLY SUBMITTED THAT THE ASSESSING OFFICER SH OULD HAVE REDUCED THE EXPENSES OF PARAWANOO UNIT BY RS.9.00 LAKHS . SIMILARLY, THE LD A.R ALSO PUT FORTH IDENTICAL SUBMISSIONS FOR COMMISSION EXPENSES ALSO. HOWEVER, THE CLAIM PUT FORTH BY THE ASSESSEE 3 ITA NO.97/RAN/13 SANJAY LODHA REQUIRES VERIFICATION. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) IN RESPECT OF THE ABOVE SAID TWO ISSUES AND RESTORE THEM TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE SAME AFRESH IN THE LIGHT OF SUBMISSIONS MADE BY THE ASSESSEE WITH REGARD TO THE CONSISTENT METHOD FOLLOWED BY THE ASSESSEE. IF THE AO IS SATISFIED THAT THE ASSESSEE HAS ADOPTED THE CONSISTENT METHOD IN RESPECT OF THE ABOVE SAID TWO ITEMS, THEN THERE IS NO NECESSITY TO REDUCE THE SAME FROM THE PROFITS OF PARAWANOO UNIT. WE ORDER ACCORDINGLY. 6. IN THE RESU LT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 - 11 - 2014 SD/ - SD/ - [ H.L. KARWA ] [ B.R. BASKARAN ] PRESIDENT ACCOUNTANT MEMBER DATE: 25 .11.2014 PLACE : RANCHI PP, SPS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT : S HRI SANJAY LODHA BM AGARWALS COLONY, SHREE NIKETAN,DHANSAR,D BAD. 2 THE RESPONDENT: ACIT,CIR - II, AAYKAR BHAWAN, LUBY CIRCULAR ROAD,D BAD. 3..THE CIT, 4.THE C IT(A), 5.DR, ITAT CIRCUIT BENCH, RANCHI 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT. REGISTRAR 4 ITA NO.97/RAN/13 SANJAY LODHA 1. DATE OF DICTATION .............25 - 11 - 2014....................... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFO RE THE DICTATING MEMBER ........................OTHER MEMBER .......26 - 11 - 2014........................ 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. ..................... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBE R FOR PRONOUNCEMENT....... 25.11.2014 ...................................................................... ........ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S ................ 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK ..................... .................. 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ......................................... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ......................................................... ........................................ 9. DATE OF DESPATCH OF THE ORDER ..............................................................