SWAROOP AGROCHEMICAL INDUSTRIES,NASHIK V. ACIT, CIRCLE-1, NASHIK

ITA 1159/PUN/2025

AI Insights

Swaroop Agrochemical Industries appealed against the order of the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals), which confirmed the disallowance of business expenses amounting to Rs. 36,25,944 for the Assessment Year 2018-19. The primary contention was the absence of PAN and GST numbers on some bills, which led to the disallowance. The Tribunal noted that during the COVID-19 pandemic, the assessee faced difficulties in collecting complete documentation, yet provided substantial details during the appellate proceedings. The Tribunal found that the lower authorities had not adequately considered the provided details and the genuineness of the expenses was not in question.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787758 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Appeal Filed On: 02-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD PAWAR
• Assessee Lawyers: PRAMOD S. SHINGTE
• Keywords: Business expenditure
• Section: 143(3); 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “B” BENCH : PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER & SHRI VINAY BHAMORE, JUDICIAL MEMBER I.T.A.No.1159/PUN/2025 (Assessment Year 2018-2019) Swaroop Agrochemical Industries, W/47(A), M.I.D.C., Satpur, Nashik, Maharashtra PAN : AAPFS 9131 H vs. ACIT, Circle-1, Nashik (Appellant) (Respondent) For Assessee : Shri Pramod S. Shingte, CA For Revenue : Shri Vinod Pawar, Addl.CIT –DR Date of Hearing : 11.11.2025 Date of Pronouncement : 20.11.2025 ORDER PER : MANISH BORAD, AM This appeal at the instance of the assessee is directed against the order of National Faceless Appeal Centre (NFAC)/ Commissioner of Income Tax (Appeals), Delhi [“CIT(A)”], dated 13/03/2025 passed under section 250 of the Income Tax Act, 1961 (“Act”), which is arising out of the assessment order u/s. 143(3) r.w.s. 144B of the Act, dated 20/04/2021 for the Assessment Year (AY) 2018-19. Printed from counselvise.com 2 ITA.No.1159/PUN./2025 (Swaroop Agrochemical Industries) 2. The assessee has raised seven grounds of appeal, but all revolve around disallowance of expenses under various heads amounting to Rs. 36,25,944/-. 3. Facts of the case, in brief, are that the assessee is a partnership firm engaged in business. Income of Rs.1,32,70,176/- declared in the return of income for the A.Y. 2018-19 e-filed on 27/10/2018. Case selected for limited scrutiny for examining the „duty drawback‟ and „business expenses‟. Statutory notices u/s. 143(2) and 142(1) of the Act duly served upon the assessee. Various details called for by the assessee were filed by the assessee to the best possible extent. Ld.AO after examining details of various expenses observed that in some cases PAN nos. are missing and in some of the cases GST nos. are missing and there are some prior period expenses also, for which the assessee has not furnished the details. He finally concluded the assessment proceedings disallowing expenses of Rs. 36,25,944/- and also observed that duty drawback of Rs. 38,115/- received by the assessee, has not been disclosed in the total income. Income assessed at Rs. 1,69,34,235/-. 4. Being aggrieved, the assessee preferred appeal before the Ld.CIT(A) and partly succeeded as the Ld.CIT(A) deleted the addition of Rs. 38,115/- and confirmed the disallowance of Printed from counselvise.com 3 ITA.No.1159/PUN./2025 (Swaroop Agrochemical Industries) expenses of Rs. 36,25,944/-. Now, assessee is in appeal before this Tribunal. 5. Learned counsel for the assessee referring to the paper book running into 23 pages and box files containing copies of bills and vouchers submitted that the assessee has provided each and every detail of the expenditure incurred under various heads. The information relating to PAN nos., GST nos. needed some time for collecting the information from each of the vendor as asked for by the Ld.AO, but before collecting all the details, assessment proceedings were concluded. He submitted that during the appellate proceedings, the assessee has furnished various details before the Ld.CIT(A) which are appearing in page Nos. 01 to 23 of the paper book showing the details of the vendors addresses, PAN nos., GST nos. description and supporting documents. He further submitted that genuineness of the expenditure has not been doubted and books of accounts have not been rejected. Therefore, the alleged disallowance deserves to be deleted. 6. On the other hand, ld. Departmental Representative (DR) supported the orders of both the lower authorities. 7. We have heard rival contentions and perused the records placed before us. The assessee is aggrieved with the disallowance of expenditure made by the Ld.AO and further confirmed by the Ld.CIT(A) for the following expenses:- Printed from counselvise.com 4 ITA.No.1159/PUN./2025 (Swaroop Agrochemical Industries) Sr.No. Particulars Amount (in Rs.) 1 F & A incentives 43,502 2 Silver Jubilee Expenses 4,89,295 3 Campaign Claim Expenses 63,300 4 Sales Promotion Expenses 22,37,434 5 Prior period expenses 7,92,413 Total 36,25,944 8. So far as disallowance of expenses of Rs. 28,33,531/- (after excluding prior period expenses of Rs. 7,92,413/-) we find that the same relates to disallowance of expenses out of F & A incentives, Silver Jubilee Expenses, Campaign Claim Expenses and Sales Promotion Expenses. The basis for disallowance is non-availability of PAN/GST nos. on the bills or details filed by the assessee. We note that the notices u/s. 142(1) of the Act have been issued during the period 02/01/2020 to 18/02/2021, during which, the entire country was passing through Covid-19 pandemic and there were various restrictions for the movements of general public. In spite of such tough situation, the assessee has furnished some details on 23/02/2021 and soon thereafter the assessment proceedings have been concluded. We observe that the Ld.AO has asked for details of each and every expenses under various heads referred to above. Individual items of some of the alleged expenses are as low as Rs. 200/- and most of them are ranging from Rs. 10,000 – 20,000. Though, the assessee Printed from counselvise.com 5 ITA.No.1159/PUN./2025 (Swaroop Agrochemical Industries) furnished the details, but Ld.AO mainly focused about absence of the PAN and GST nos. of such vendors. The assessee could not collect all those details. However, the assessee furnished major details of PAN and GST nos. of the vendors in the appellate proceedings before the Ld.CIT(A). 9. Before us also, all those details of expenses of bills are placed. On going through the impugned order as well as assessment order, we find that both the lower authorities have not questioned the genuineness of the expenses. Even the books of accounts have not been rejected and even when the assessee furnished the details before the Ld.CIT(A), he has also not taken any cognizance of the same. Under these given facts and circumstances of the case and also carefully going through the details of expenses filed by the assessee before us, we find that genuine claim of expenses has been made by the assessee and that the Ld.CIT(A) erred in confirming the action of the Ld.AO in disallowing the expenses of Rs. 28,33,531/-. We accordingly, delete the same and allow grounds of appeal Nos. 2, 3, 4 & 5. 10. The remaining portion of the disallowance is prior period expenses of Rs. 7,92,413/- raised in ground No.6. We have gone through the details of alleged sum and noticed that it includes AMC charges, ex-gratia, tour expenses and sales incentive. Firstly, the main reason for disallowing the prior Printed from counselvise.com 6 ITA.No.1159/PUN./2025 (Swaroop Agrochemical Industries) period expenses were absence of PAN nos., however, assessee furnished the PAN of each of the vendor in the details of the prior period expenditure, and therefore, on the very basis for disallowing the prior period expenditure goes away. The assessee has correctly claimed the prior period expenses because the liability to make the payment has been ascertained in the year under consideration and accordingly, the expenses have been booked. Therefore, the disallowance of prior period of expenses of Rs. 7,92,413/- is also deleted. Ground Nos. 6 raised by the assessee is also allowed. Ground No.7 is general in nature, needs no adjudication since the same is against the application of provisions of section 115BBE of the Act and since the impugned addition already stands deleted, ground No.7 deserves to be dismissed as infructuous. Other grounds are general in nature. 11. In the result, appeal of the Assessee is allowed. Order pronounced in the open Court on 20.11.2025. Sd/- Sd/- [VINAY BHAMORE] [MANISH BORAD] JUDICIAL MEMBER ACCOUNTANT MEMBER Pune, Dated 20th November, 2025 vr/- Printed from counselvise.com 7 ITA.No.1159/PUN./2025 (Swaroop Agrochemical Industries) Copy to 1. The appellant 2. The respondent 3. The CIT(A), Pune concerned. 4. D.R. ITAT, “B” Bench, Pune. 5. Guard File. By Order //True Copy // Assistant Registrar, ITAT, Pune. Printed from counselvise.com "