ACIT, Mathura v. M/s S.D.Cold Storage P.Ltd, Shivpuri

ITA 624/AGR/2008 | 2005-2006
Pronouncement Date: 27-08-2010 | Result: Dismissed

Appeal Details

RSA Number 62420314 RSA 2008
Assessee PAN AACCS6201J
Bench Agra
Appeal Number ITA 624/AGR/2008
Duration Of Justice 1 year(s) 10 month(s) 19 day(s)
Appellant ACIT, Mathura
Respondent M/s S.D.Cold Storage P.Ltd, Shivpuri
Appeal Type Income Tax Appeal
Pronouncement Date 27-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 27-08-2010
Date Of Final Hearing 19-07-2010
Next Hearing Date 19-07-2010
Assessment Year 2005-2006
Appeal Filed On 08-10-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.624/AGR/2008 ASST. YEAR: 2005-06 A.C.I.T. - 3 MATHURA. VS. M/S. S.D. COLD STORA GE (P) LTD. GOVIND GANJ MATHURA. (PAN : AACCS 6201 J). C.O. NO.94/AGR/2008 (IN ITA NO.624/AGR/2008) ASST. YEAR: 2005-06 M/S. S.D. COLD STORAGE (P) LTD. VS. A.C.I.T. - 3 MATHURA. GOVIND GANJ MATHURA. (PAN : AACCS 6201 J). (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI VINOD KUMAR JR. D.R. ASSESSEE BY : SHRI RAJEEV BANSAL ADVOCATE ORDER PER P.K. BANSAL A.M.: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 25.07.2008 AND THE CROSS OBJECTION (C.O.) HAS BEEN FILED BY THE ASSESSEE. 2. GROUND NO.1 OF THE APPEAL OF THE REVENUE RELATES TO THE DELETION OF ADDITION OF RS.4 32 926/- MADE BY THE A.O. ON ACCOUNT OF DIFFER ENCE IN THE RATES OF RENT. 2 3. THE BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF COLD STORAGE. IN THE COURSE OF ASSESSMENT PROCEEDI NGS THE A.O. OBSERVED THAT AT THE CHHIPRAMAU BRANCH THE ASSESSEE HAD CHARGED THE RENT @ RS.43/- PER BAG OF 50 KGS. EACH AND RS.60/- PER BAG FOR BAGS OF 70 KGS. EACH. HOWEVER AT THE MATHURA BRANCH THE RENT WAS CHARGED @ RS.40/- PER BAG FOR 50 KGS. THE A.O. THEREFORE APPLIED THE RATE OF RS.42/- PER BAG OF 50 KGS. ON 216463 BAGS STORED BY THE ASSESSEE IN MATHURA CO LD STORAGE AND ADDED THE DIFFERENCE AMOUNTING TO RS.4 32 926/-. THE ASSESSEE WENT IN A PPEAL BEFORE THE CIT(A). THE CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER :- I HAVE CONSIDERED THE FACTS OF THE CASE AND THE RI VAL CONTENTIONS. IT IS SEEN THAT THE AO HAS REJECTED THE RECEIPTS SHOWN BY THE APPELLANT IN RESPECT OF ITS MATHURA COLD STORAGE HOLDING THAT THE RENT OF RS.4 0/- PER 50 KGS. BAG SHOWN BY IT IS UNDERSTATED IN COMPARISON TO THE RATE CHARGED BY ITSELF AT ITS CHHIPRAMAU COLD STORAGE AT RS.43/- PER BAG AND CHARGED BY ANOT HER COLD STORAGE NAMELY SWARAJ COLD STORAGE PVT. LTD @ RS.45/- PER BAG. TH US THE AO HAS REJECTED THE APPELLANTS BOOKS OF ACCOUNT FOR THE CHHIPRAMAU BRA NCH AND ESTIMATED RECEIPTS THEREOF. IN SO ESTIMATING RECEIPTS THE AO HAS APP LIED AN AVERAGE RATE OF RS.42/- PER 50 KGS. BAGS AGAINST THE ACTUAL RATES OF RS.40/ - RS.43/- AND RS.45 AS REFERRED TO HEREINABOVE. HOWEVER IT IS SEEN THAT THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE APPELLANT HAD BEEN CHARGING A HIGHER RATE PER BAG BUT ACCOUNTING FOR A LOWER RATE. THERE IS MERIT IN THE ARGUMENT OF APPE LLANT THAT SUCH ESTIMATION CAN BE RESORTED TO WHERE AN ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNT OR THE BOOKS OF ACCOUNT MAINTAINED BY HIM ARE UNRELIABLE. HOWEVER NO SUCH FINDING APPEARS IN THE ASSESSMENT ORDER NOR HAS THE AO REJE CTED THE BOOKS OF ACCOUNT AND INVOKED THE PROVISIONS OF SEC.145 OF THE ACT. FURT HER THE RATE OF RS.42/- ADOPTED BY THE AO IS NOT SUPPORTED BY ANY EVIDENCE OR DATA AND APPEARS TO BE AN AVERAGE OF RATES CHARGED AT MATHURA BRANCH & CHHIPRAMAU BRA NCH. THE IMPUGNED ADDITION IMPLIES THAT THE RECEIPTS ACCOUNTED FOR BY THE APPELLANT ARE SUPPRESSED TO SUCH EXTENT. HOWEVER THERE IS NO CONTEMPORANEOUS CORROBORATIVE EVIDENCE TO SUPPORT SUCH A FINDING. FOR THESE REASONS THE ADD ITION OF RS.4 32 926/- IS NOT SUSTAINABLE AND CONSEQUENTLY DELETED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. IN OUR OPINION THE A.O. CANNOT ENTER INTO THE SHOES OF THE ASSESSE E. HE CANNOT REJECT THE RATE CHARGED BY THE ASSESSEE UNTIL AND UNLESS THERE IS EVIDENCE FROM TH E RECORD WHICH MAY PROVE THAT THE ASSESSEE HAS 3 CHARGED RATE MORE THAN THE ONE WHICH HAS BEEN SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. NO IOTA OF EVIDENCE HAS BEEN BROUGHT ON RECORD WHIC H MAY PROVE THAT THE ASSESSEE HAS CHARGED RENT @ RS.42/- PER BAG OF 50 KGS. INSTEAD OF RS.40/ - PER BAG SHOWN BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES THE ADDITION MADE BY THE A.O. REMAIN S ON ASSUMPTION. WE THEREFORE CONFIRM THE ORDER OF THE CIT(A) DELETING THE ADDITION OF RS .4 32 926/-. 5. THE SECOND ISSUE IN REVENUES APPEAL RELATES TO THE DELETION OF THE DISALLOWANCE OF RS.3 00 000/- MADE BY THE A.O. 6. THE FACTS RELATING TO THIS GROUND ARE THAT THE A .O. OBSERVED THAT FROM A PERUSAL OF THE RELEVANT DETAILS OF THE EXPENDITURE THE EXPENDITUR E IS NOT FULLY SUPPORTED BY VOUCHERS AND IN SOME CASES THE VOUCHERS ARE WITHOUT REVENUE STAMPS. HE THEREFORE DISALLOWED ON ADHOC BASIS A SUM OF RS.3 00 000/- ON ACCOUNT OF LACK OF PROPER B ILLS AND VOUCHERS. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) THE CIT(A) DELETED THE DI SALLOWANCE BY OBSERVING A UNDER :- I HAVE CONSIDERED THE RIVAL CONTENTIONS AND FIND T HE ARGUMENTS OF THE APPELLANT TENABLE IN SO MUCH THAT THE LUMP-SUM DISA LLOWANCE OF RS.3 LACS IS ADHOC IN NATURE. THERE IS NO FINDING AS TO WHETHER SUCH EXPENSES WERE NOT INCURRED BUT FALSELY CLAIMED OR WHETHER EXPENSES HA VE BEEN INFLATED TO SUCH EXTENT. THERE IS ALSO NO FINDING THAT EXPENSES CLA IMED TO THE EXTENT OF RS.30 87 759/- ARE EXCESSIVE OR UNREASONABLE VIS-- VIS THE NUMBER OF BAG OR SIMILAR EXPENSES CLAIMED BY OTHER COLD STORAGES OR THAT SUCH EXPENDITURE IS NOT ADMISSIBLE IN TERMS OF SECTION 37(1)/40A(2)(B) OF T HE ACT ETC. IN THESE FACTS AND CIRCUMSTANCES THE LUMP-SUM DISALLOWANCE OF RS.3 LA CS IS NOT SUSTAINABLE AND CONSEQUENTLY DELETED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. IN OUR OPINION NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE C IT(A). THE FACT REMAINS THAT THE DISALLOWANCE HAS BEEN MADE BY THE A.O. MERELY ON ADHOC BASIS WIT HOUT POINTING OUT TO WHAT EXTENT THE 4 EXPENSES ARE NOT SUPPORTED BY VOUCHERS. THERE IS N O FINDING THAT SOME OF THE EXPENSE ARE THE CAPITAL EXPENDITURE OR ARE NOT INCURRED FOR THE PUR POSE OF BUSINESS. THUS THIS GROUND STANDS DISMISSED. C.O. NO.94/AGR/2008 8. THE ONLY GROUND TAKEN BY THE ASSESSEE IN ITS CR OSS OBJECTION RELATES TO THE SUSTENANCE OF DISALLOWANCE OF EPF OF RS.4 428/- . 9. THE FACTS RELATING TO THIS GROUND ARE THAT THE A .O. DISALLOWED EPF AMOUNTING TO RS.4 428/- FOR THE MONTH OF OCTOBER 2004 WHICH WAS DUE TO BE PAID BY 20.11.2004 BUT THE ASSESSEE HAS DEPOSITED THE SAME ON 24.11.2004. WHE N THE MATTER WENT BEFORE THE CIT(A) THE CIT(A) CONFIRMED THE DISALLOWANCE. 10. BEFORE US THE LD A.R. VEHEMENTLY RELIED ON THE ORDER OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. AIMIL LIMITED 321 ITR 508 FOR THE PROPO SITION OF LAW THAT THE ASSESSEE CAN GET BENEFIT OF THE DEDUCTION OF PAYMENT IF THE ACTUAL P AYMENT IS MADE BEFORE THE RETURN IS FILED. IN THE CASE OF THE ASSESSEE THE PAYMENT OF EPF FOR TH E MONTH OF OCTOBER 2004 WAS DUE TO BE PAID BY 20.11.2004 AND THE ASSESSEE HAS DEPOSITED THE SA ME ON 24.11.2004 I.E. NOT ONLY WITHIN THE F.Y. BUT ALSO BEFORE FILING OF THE INCOME TAX RETUR N. LD. D.R. ON THE OTHER HAND RELIED ON THE ORDER OF THE CIT(A). 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIAL ON RECORD. WE NOTED THAT THE ASSESSEE HAS MADE THE PAYMENT FOR EPF FOR THE MONTH OF OCTOBER 2004 ON 5 24.11.2004 WHICH WAS DUE TO BE PAID ON 20.11.2004 I .E. IN ANY CASE BEFORE FILING OF THE RETURN BY THE ASSESSEE. THE HONBLE SUPREME COURT IN THE CAS E OF CIT VS. VINAY CEMENT LIMITED 313 ITR (ST.) 1 DISMISSED THE SPECIAL LEAVE PETITION OF THE DEPARTMENT AGAINST THE DECISION OF THE GAUHATI HIGH COURT IN ITA NO.2 OF 2005 AND 56 AND 8 0 OF 2003 AND 284 ITR 619 IN WHICH THE HONBLE HIGH COURT HAS HELD THAT THE CONTRIBUTIONS MADE TOWARDS PROVIDENT FUND ETC. AFTER THE CLOSE OF THE ACCOUNTING PERIOD BUT BEFORE THE DUE DATE FOR FILING OF THE RETURN OF INCOME FOR THE A.Y. 1992-93 WERE ENTITLED TO RELIEF UNDER SECTION 43B(B) OF THE I.T. ACT. THE HONBLE SUPREME COURT WHILE DISMISSING THE SPECIAL LEAVE PETITION O BSERVED THAT THESE WERE CASES CONCERNING THE LAW AS IT STOOD PRIOR TO THE AMENDMENT OF SECTION 4 3B FOR THAT PERIOD PARTICULARLY IN VIEW OF THE FACT THAT IT HAD CONTRIBUTED TO PROVIDENT FUND BEFO RE FILING THE RETURN. WE ARE OF THE VIEW THAT IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF CIT VS. VINAY CEMENT LIMITED THE ASSESSEE IS BOUND TO SUCCEED. WE ACCORDINGLY S ET ASIDE THE ORDER OF CIT(A) AND DIRECT THE A.O. TO DELETE THE ADDITION OF RS.4 428/-. THUS T HIS GROUND IS ALLOWED. 12. IN THE RESULT APPEAL OF THE REVENUE STANDS DIS MISSED AND CROSS OBJECTION FILED BY THE ASSESSEE STANDS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 27.08.2010). SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 27 TH AUGUST 2010. PBN/* 6 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY