ACIT, Chandigarh V. Punjab State Warehousing Corporation, Chandigarh

MA 73/CHANDI/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1347 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 29-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER M.A. NOS.73 & 74 /CHD/2013 IN ITA NOS.771 & 891 /CHD/2009 (ASSESSMENT YEAR: 2002-03) THE A.C.I.T., VS. PUNJAB STATE WAREHOUSING CORP ORATION, CIRCLE 2(1), SCO 74-75, SECTOR 17-B, CHANDIGARH. CHANDIGARH. PAN: AAACV5824C (APPELLANT) (RESPONDENT) APPLICANT BY : SHRI J.S. NAGAR, DR RESPONDENT BY : SHRI T.N.SINGLA DATE OF HEARING : 17.01.2014 DATE OF PRONOUNCEMENT : 23.01.2014 O R D E R PER SUSHMA CHOWLA, JM : THE APPLICANT-REVENUE HAS FILED THE PRESENT MISCELL ANEOUS APPLICATIONS FOR RECALLING THE CONSOLIDATED ORDER D ATED 27.12.2012 IN THE CROSS APPEALS OF THE ASSESSEE AND THE REVENUE IN IT A NOS.771 & 891/CHD/2009 RESPECTIVELY RELATING TO THE ASSESSMEN T YEAR 2002-03. 2. THE APPLICANT/REVENUE IS AGGRIEVED BY THE ORDER OF THE TRIBUNAL IN HOLDING THAT THE ASSESSEE HAD LOSS AFTER ALLOWING I NDIRECT EXPENSES. IT WAS POINTED OUT BY THE LEARNED D.R. FOR THE REVENUE THAT THE AUDITOR HIMSELF HAD SAID THAT THERE WERE PROFITS ON WAREHOU SING ACTIVITIES. OUR 2 2 ATTENTION WAS DRAWN TO ANNEXURE-A FILED ALONGWITH A UDIT REPORT, WHICH IS ANNEXED AS ANNEXURE TO THE MISCELLANEOUS PETITIO N. 3. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT TH AT THERE IS MISTAKE BY THE AUDITOR IN THE ANNEXURE-K IN REPORTING THAT THE TURNOVER OF RS.169,788 LACS ARE FROM WAREHOUSING ACTIVITIES AND ACTUAL FACT IS THAT THE TURNOVER FROM WAREHOUSING ACTIVITIES WAS ONLY R S.13,380 LACS, WHEREAS BY MISTAKE THE AUDITOR HAD REPORTED THE SAM E TO BE RS.169,788 LACS, WHICH IS THE ACTUAL TURNOVER FROM PROCUREMENT BUSINESS INCLUDING CFS, LUDHIANA. THE LEARNED D.R. FOR THE REVENUE WAS CONFRONTED WITH THE SAME AND IT WAS POINTED OUT TO THE LEARNED D.R . FOR THE REVENUE THAT THE TURNOVER OF RS.169,788 LACS IS DIFFICULT TO ACH IEVE FROM THE WAREHOUSING ACTIVITIES TO WHICH HE HAD NO REPLY. 4. FROM THE PERUSAL OF THE ORDER WE FIND THAT THE T RIBUNAL AFTER DELIBERATING UPON THE ISSUE HAD IN TURN RELIED UPON THE ISSUE RAISED IN THE EARLIER YEARS AND VIDE PARA 16 HAD OBSERVED AS UNDE R: 16. THE ISSUE RAISED IN THE PRESENT APPEAL IS IDEN TICAL TO THE ISSUE RAISED BEFORE THE TRIBUNAL IN THE EARLIER YEA RS IN ASSESSEES OWN CASE FOR THE IMPUGNED ASSESSMENT YEARS AS MENTI ONED ABOVE AND THE PROVISIONS OF SECTION 14A OF THE ACT ARE NO T TO BE APPLIED IN ORDER TO COMPUTE THE EXPENSES NOT ALLOWABLE WHIC H ARE ATTRIBUTABLE TO THE EARNING OF NON TAXABLE INCOME. HOWEVER, IN ORDER TO DETERMINE THE TAXABLE INCOME IN THE HANDS OF THE ASSESSEE, THE COMMON EXPENSES ARE TO BE APPORTIONED BETWEEN T AXABLE AND NON TAXABLE INCOME. IN CASE FORMULA CANVASSED BY T HE ASSESSEE IS ACCEPTED I.E. THE TOTAL EXPENDITURE SHOULD BE ATTRI BUTED TO EACH OF THE ACTIVITIES ON THE BASIS OF THE TURNOVER, THERE WOULD BE LOSSES IN THE PROCUREMENT ACTIVITIES. AS HELD BY THE TRIBUNA L (SUPRA) IN THE CASE OF THE ASSESSEE ITSELF, SUCH LOSSES CANNOT BE ADJUSTED AND CARRY FORWARDED IN THE HANDS OF THE ASSESSEE. FOLLO WING THE SAME WE DIRECT THE ASSESSING OFFICER TO ADOPT THE INCOME OF THE ASSESSEE AT NIL IN THE CAPTIONED ASSESSMENT YEARS AND NO LOS SES ARE TO BE ADJUSTED OR CARRIED FORWARD. THE GROUND OF APPEAL RAISED BY THE REVENUE IS THUS PARTLY ALLOWED. 5. THE LEARNED D.R. FOR THE REVENUE HAD FAILED TO F IND OUT ANY MISTAKE IN THE OBSERVATIONS OF THE TRIBUNAL AND IN VIEW THEREOF, WE FIND 3 3 NO MERIT IN THE MISCELLANEOUS APPLICATIONS FILED BY THE REVENUE AND THE SAME ARE DISMISSED. 6. IN THE RESULT, BOTH THE MISCELLANEOUS APPLICATIO NS FILED BY THE APPLICANT-REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD OF JANUARY, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23 RD JANUARY, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH