Income Tax Appellate Tribunal - Amritsar
M/S. Bhagwati Rice Mills,, Ferozepur vs The Income Tax Officer, Ferozepur on 26 July, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR
BEFORE SH. VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND
SH. N.K.CHOUDHRY, JUDICIAL MEMBER
ITA No.288 (Asr)/2014
Assessment Year:2010-11
M/s. Bhagwati Rice Mills, Vs. Income Tax Officer,
Ferozepur Cantt. Ward-III(2), Ferozepur
[PAN:AABFB 3615R]
(Appellant) (Respondent)
Appellant by: Sh. Ashray Sarna (Ld. CA)
Respondent by: Sh. Charan Dass (Ld. DR)
Date of hearing : 14.06.2019
Date of pronouncement: 26.07.2019
ORDER
PER N.K.CHOUDHRY, JM:
The instant appeal has been preferred by the Assessee/Appellant against the order dated 21/02/2014 passed by the Ld. CIT(A), Bathinda u/s. 250(6) of Income Tax Act, 1961 (hereinafter called as the 'Act') whereby the Ld. CIT(A) partly affirmed the assessment dated 25.03.2013 framed u/s 143(3) of the Act.
2. The brief facts of the case are that the assessee is a partnership firm carrying on the business of manufacturing of par boiled rice and its byproducts and had filed its return of income to the tune of Rs.5,68,070/- which was processed u/s 143 of the Act and ultimately resulted into the additions of Rs.90,83,010/- on account of disallowance u/s 36(1)(iii) of the Act, Rs.1,25,00/- on account of disallowance of expenditure qua 2 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO computer, Rs.5,73,443/- on account of disallowance of expenditure u/s 40A(3) and proviso to Sec.40A(3A) of the Act and Rs.4,18,143/- on account of depreciation on fixed assets. The assessee challenged the assessment order before the Ld. CIT(A) who partly affirmed the said additions made by the Assessing Officer, against which the assessee has filed the instant appeal before us.
3. Having heard the parties at length and perused the material available on record. The assessee has raised the following grounds of appeal challenging the impugned order.
1. The orders passed by the Commissioner of Income Tax (Appeal) vide orders dated 21.02.2014 are illegal, uncalled for and against the law & facts.
2. The Commissioner of Income Tax (Appeal) has made additions merely on conjectures and surmises without any legal basis.
3. That, assessment framed by assessing officer is without jurisdiction and Commissioner of Income Tax (Appeal) fails to admit the facts & evidences as submitted by the appellant.
That, Jurisdiction of the assessee falls under ACIT, Circle- Ill, Ferozepur, case was selected for scrutiny by Circle-Ill, Ferozepure.
No notice for transfer of file from ACIT, Circle-Ill, Ferozepur to Income Tax Officer, Ward- III(2), Ferozepur is ever issued.
No opportunity of hearing to appellant to give his objection for transfer of file is given. File can not be transferred without giving an opportunity to the assessee.
Thus assessment framed is without jurisdiction & it means Assessment Order is illegal & void-abenitio, so no addition made under this Assessment Order is sustainable. Commissioner of Income Tax (Appeal), Bathinda miserably failed to appreciate the facts & has wrongly mentioned 3 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO Section 124(3) of the Income Tax Act, 1961, which is not applicable in this case.
On the basis of evidences produced by appellant, this ground of appeal may please be accepted.
4. That Ld. Commissioner of Income Tax (Appeal), Bathinda has merely give partial relief instead of considering-
i) Business expediency of appellant with the concerns against whom interest has been disallowed.
ii) No interest can be charged on opening balance.
ii) That, rate of interest is wrongly calculated.
5. That, freight paid to truck operators is wrongly disallowed. Despite submitting the bilties of each truck showing truck numbers & payments to them separately. Assessing Officer has wrongly added the amount.
Ld. Commissioner of Income Tax (Appeal), Bathinda has also failed to consider this evidence. So this ground of appeal should be allowed.
6. That, The Assessing Officer has wrongly disallowed the Depreciation of Rs.418143.00 against capital incentive.
That, subsidy of Rs.3817000.00 is incentive to the unit & its not subsidy for purchase of fixed assets. Assessing Officer and Commissioner of Income Tax (Appeal) has fails to appreciate the evidence & judicial pronouncement in favour of assessee.
Considering the evidence and judicial pronouncement, this ground of appeal may please allowed.
7. The assessee craves leave to argue on any other question of law or facts at the time of hearing of this appeal.
Thus, considering the above facts and question of law, it is requested that the order of the A.O. may kindly be set aside and the grounds of appeal of the appellant may kindly be head in favour of the appellant.
4. Ground No. 1 & 2 does not require any adjudication as the same are formal in nature.
5. Ground No.3 is a legal ground, which we will decide after decision on the merit.
4 ITA No.288/Asr/2014 (A.Y.2010-11)Bhagwati Rice Mills vs. ITO
6. Ground No.4 relates to the disallowance of interest of Rs.90,83,010/-. As per Revenue case, it was noticed that the assessee has advanced Rs. 2,97,54,333/- to Ms. Bhagwati Lacto Vegetarian Exports Pvt. Ltd., Rs.33,50,000/- to M/s Pawan Kumar & Co. and Rs.35,12,624/- to M/s. Rahul Udyog. Though the assessee had received interest from M/s. Rahul Udyog and M/s. Bhagwati Lacto Vegetarian Exports Pvt. Ltd. in the preceding year i.e. Financial Year: 2008-09 relevant to A.Y.2009-10 to the tune of Rs.3,38,152/- and Rs.3,20,334/- respectively, however no interest was charged during the year under consideration, for the advances outstanding and advances made during the year. Though the assessee claimed to have paid the said amount as a security amount for business expediencies, however, could not find favour from the Assessing Officer and the Assessing Officer concluded as under:
(i) That the money borrowed by the assessee from cash and credit account on which interest has been paid was actually diverted for advancing interest free loans to these concerns.
(ii) That there was no commercial expediency by making advance to these concerns.
(iii) That the assessee is not having own or interest free borrowed funds with it to given advance to these concerns.
Thus there is no nexus between interest free advances and interest bearing borrowed capital which has been proved and funds were advances for no commercial expediency.
5 ITA No.288/Asr/2014 (A.Y.2010-11)Bhagwati Rice Mills vs. ITO The Assessing Officer ultimately considering the average daily debit balance at Rs.6,37,40,426/- disallowed the excessive interest of Rs.90,83,010/- paid to the bank by the assessee and added the same in the income of the assessee. On challenge the Ld. CIT(A) though affirmed the action of the AO for making disallowance, however on the basis of remand report, reduced the rate of interest and worked out @ 11.89% interest, instead of 14.25% as worked out by the Assessing Officer and therefore, directed the AO to recompute the disallowance of interest by adopting rate @ 11.89%.
6.1 The assessee is in appeal before us on this addition well, in addition to the other additions sustained by the Ld. CIT(A). As the assessee has claimed that the assessee has paid the amount to its sister concerns for business expediency and there is no fund utilization on which interest has been paid by the assessee. The practical test has been laid down by the Hon'ble Apex Court in the case of S.A Builders Ltd. vs. CIT & Anor., [2006] 206 CTR 631 (SC) which prescribed that the Revenue Authorities have to find out the purpose for which the assessee has advanced the money to its sister concern. Secondly what the sister concern did with this money.
Further the assesse has also claimed that in the Financial Year under consideration, the assessee has received the stock of paddy in order to do the milling process and on dated 15th November, 2009 executed milling agreement with M/s. Bhagwati Lacto Vegetarian Export Pvt. Ltd. qua milling of paddy on contract basis, which includes cleaning, grading and sorting of rice and afterward to be packed in Export Worthy Bags to be 6 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO supplied by M/s. Bhagwati Lacto Vegetarian Exports Pvt. Ltd. Further as per Clause -3 of the Milling Agreement, it was agreed that the milling of paddy shall be done by the Assessee and consideration is fixed for the milling of paddy @ Rs.9,00 per MT of paddy up to packing of rice as per requirement of the second party (M/s. Bhagwati Lacto Vegetarian Export Pvt. Ltd.) and no separate amount will be paid by the second party to the first party. The assessee therefore, claimed that the assessee has paid the security amount on various occasions to M/s. Bhagwati Lacto Vegetarian Export Pvt. Ltd. (sister concern of the assessee) for doing the job work and therefore, for the business expediency. Further the assessee claimed that during the F.Y:
2010-11, the assessee has done the milling of the paddy received from M/s. Bhagwati Lacto Vegetarin Export Pvt. Ltd. and received Rs.74,21,040/- by way of job work of paddy. The assessee also involved in selling/purchase of rice from each other frequently in subsequent years. The assessee has also drawn our attention to the circular No.19/2017 dated 12/06/2017 and submitted that the CBDT Board has considered the aspect qua advances made by the company to sister concern and adjusted against the dues for job work done by the sister concern and held that amount advanced for business transactions do not fall within the definition of deemed dividend u/s 2(22)(e) of the Act. The CBDT Board ultimately held that trade advances, which are in the nature of commercial transactions would not fall within the ambit of word 'advance' in section 2(22)(e) of the Act. Accordingly, the Revenue Department not to file any appeal on this ground and filed if any, already in Courts/Tribunal then may be withdrawn/ not pressed upon.7 ITA No.288/Asr/2014 (A.Y.2010-11)
Bhagwati Rice Mills vs. ITO 6.2 On the contrary the Ld. D R vehemently supported the orders passed by authorities below and submitted that impugned order does not suffer from any perversity, illegality and/or impropriety , hence does not requires any inference.
6.3 Having considered the issue under hand, which relates to business expediency. The Apex Court in S.A. Builders Ltd. Vs. Commissioner of Income- Tax (Appeals) and Another [2007] 288 ITR 1 (SC), while dealing with the issue qua commercial expediency has held that expression "commercial expediency" is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purposes of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as business expenditure if it was incurred on grounds of commercial expediency. The dictum of Apex Court is produced herein as under:-
25. In our opinion, the High Court as well as the Tribunal and other Income Tax Authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest-
free loan was given to the sister company (which is a subsidiary of the assessee) as a measure of commercial expediency, and if it was, it should have been allowed.
26. The expression "commercial expediency" is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as business expenditure if it was incurred on grounds of commercial expediency. xxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx
31. The High Court and the other authorities should have examined the purpose for which the assessee advanced the 8 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO money to its sister concern, and what the sister concern did with this money, in order to decide whether it was for commercial expediency, but that has not been done.
32. It is true that the borrowed amount in question was not utilised by the assessee in its own business, but had been advanced as interest- free loan to its sister concern. However, in our opinion, that fact is not really relevant. What is relevant is whether the assessee advanced such amount to its sister concern as a measure of commercial expediency. xxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx
36. We wish to make it clear that it is not our opinion that in every case interest on borrowed loan has to be allowed if the assessee advances it to a sister concern. It all depends on the facts and circumstances of the respective case. For instance, if the Directors of the sister concern utilise the amount advanced to it by the assessee for their personal benefit, obviously it cannot be said that such money was advanced as a measure of commercial expediency. However, money can be said to be advanced to a sister concern for commercial expediency in many other circumstances (which need not be enumerated here). However, it is obvious that a holding company has a deep interest in its subsidiary, and hence if the holding company advances borrowed money to a subsidiary and the same is used by the subsidiary for some business purposes, the assessee would, in our opinion, ordinarily be entitled to deduction of interest on its borrowed loans."
6.4 From the dictum of the Apex Court in the aforesaid decision it is clear that the authorities are under obligation to examine the purpose for which the assessee advanced the money to its sister- concern and what the sister concern did with this money, in order to decide whether it was for commercial expediency. Further the commercial expediency has wide amplitude which may not have been incurred on any legal obligation but still it is allowable as business expenditure if the same is established to be incurred on the grounds of commercial expediency. Further the Hon'ble Apex Court also reminded that once it is established that there was nexus between the expenditure and the purpose of the business, the Revenue cannot 9 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO justifiable claim to put itself in the armchair of the businessman and to assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. The authorities must not look at the matter from their own view point but has to see that of prudent business man.
6.5 Even Jurisdictional High Court in the case of Commissioner of Income Tax vs. Rockman Cycles Industries Ltd. [2009] 176 Taxman 0021 has been consciously held that once a finding of fact has been recorded that the interest paid in respect of advances was for business consideration, then the deduction u/s. 36(1)(iii) has to be allowed to the assessee while computing the income not-withstanding advancement of interest free loan to sister-concern. Merely because the interest free loan has been given/advanced to the sister-concern, no such inference can be drawn that the said advances were not for any business connection or purpose.
6.6 The Co-ordinate Bench in the case of Income Tax Officer vs. Chamba Mal Roop chand [2001] 70 TTJ 0043, affirmed the deletion of addition on account of disallowance of interest u/s 36(1)(iii) of the Act by holding that once the assessee having produced the confirmation from the company and certificate from the Charted Accountant stating that the payment made to the company was share application money, genuineness of such payment could not be disbelieved and no part of interest paid on loans could be disallowed 6.7 Now coming to the instant case, It is an admitted fact that in the immediate proceeding year, the assessee had received the interest on the amount given to the aforesaid companies i.e., M/s. Bhagwati Lacto Vegetarian Exports Pvt. Ltd. and M/s Rahul Udyog to the tune of Rs.3,38,152/- and Rs.3,20,334/- respectively. During the financial year, the assessee has made a milling agreement with M/s Bhagwati Lacto Vegetarian Export Pvt. Ltd. on 15.11.2009 and secured the stock of paddy and did the milling work subsequently, which is also 10 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO not in dispute as it is clearly reflects from para no.4 of the impugned order to the effect that the assessee has received Rs.74,21,040/- by way of job work of paddy during the subsequent Financial Year 2010- 11, hence in our considered view the aforesaid facts substantiate the relation of business between the assessee and M/s. Bhagwati Lacto Vegetarian Export Pvt. Ltd effective from the date of signing of the milling agreement i.e, 15.11.2009 or receipt of paddy for milling, whichever is earlier. During the financial year under consideration, the assessee has advanced an amount of Rs 6,51,00,000. The Assessee on specific query by Bench also clarified qua cost of paddy stored to the tune of Rs. 13 Crores approximately during the financial year 2009-2010 relevant to this appeal. We therefore find that as against the cost of paddy to the tune of Rs. 13 crores, Rs. 9.48 crores which was earlier advanced by the assessee has been mutually agreed upon between the parties as security deposit. Therefore, for period starting the date of signing of the milling agreement i.e, 15.11.2009 or receipt of paddy for milling starting October, 2009, it strengthen the claim of assessee qua security paid to M/s. Bhagwati Lacto Vegetarian Export Pvt. Ltd.. Even the spirit of the Board Circular No.19/2007 is very much clear that the trade advances which are in the nature of commercial transactions would not fall within the ambit of word 'advance', hence as per circular cannot be subjected to any disallowance/addition. It is not in dispute that the assessee has filed the confirmation from M/s. Bhagwati Lacto Vegetarian Export Pvt. Ltd. with regard to the business dealing with the assessee and having received funds as security amount against the paddies stored for milling in assessee's premises during the F.Y.2009-10, which were milled in subsequent F.Y.2010-11 and also paid Rs.74,21,040/- qua job work of paddy. The company also certified that it also deals with the purchase and sale of rice with the assessee frequently in subsequent years. The assessee has also produced milling agreement dated 15.11.2009 which is relevant for the Asst. year: 2010-11 as of 11 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO the instant case, wherein specifically the terms and conditions have been set out for milling of the paddy and the Department did not doubt either the confirmation from M/s Bhagwati Lacto Vegetarian Export Pvt. Ltd. to the effect that they had the business dealing with the assessee nor the milling agreement submitted by the assessee before the authorities below. As the Hon'ble Apex Court in the case of S.A Builders (supra) consciously reminded that the authorities below and the Courts should examine the purpose for which the assessee advances the money and what the sister concern did with this money, what is relevant is whether the amount was advanced for commercial/business expediency which in the instant case the assessee has been able to established for period starting the date of signing of the milling agreement i.e, 15.11.2009 or receipt of paddy for milling starting October, 2009. Hence, for the said period starting October 2009, addition towards the interest made on the basis of advanced/security amount paid to M/s. Bhagwati Lacto Vegetarian Export Pvt. Ltd. is liable to be deleted. The matter is accordingly set-aside to the file of the AO to recompute the disallowance so made by him in light of above directions.
6.8 While coming to the advance given to the M/s. Rahul Udyog, the assessee also relied upon the certificate issued by M/s Rahul Udyog to the effect that they have business dealing with M/s Bhagwati Rice Mills, Ferozepur Cant. (the assessee herein) and are helping it in purchase of paddy from the market, that's why they keep fund from them. Funds transferred in F.Y.2009-10 were transferred for the same purpose and account was settled before 31st March, 2010. The assessee except showing the certificate, failed to produce any document to 12 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO authenticate the business/commercial expediency with M/s. Rahul Udyog, hence, considering the test laid down in the case of S.A Builders (supra), we are not convinced that the assessee had any commercial expediency for paying the security amount to M/s Rahul Udyog and therefore, we are not inclined to entertain the Assessee's claim of business expediency qua M/s. Rahul Udyog and thus the decision of the Ld CIT(A) qua addition on account of M/s. Rahul Udyog is sustained.
6.9 This is also in controversy as to whether any disallowance of interest u//s 36(1)(iii) can be made for opening balances. Though the Ld. CIT(A) has affirmed the disallowance on the opening balances as well by considering the facts that in the previous year the assessee had charged the interest from the debtors in the immediate preceding year, however, as the Co- ordinate Bench in the case of PMS Diesels & Ors. vs. ACIT and Ors. decided on 30/08/2017 (ITA No.114/Asr/2014, & 116 to 118(Asr/2014 [2017] 60 ITR (Trib) 0466 (Amritsar), while relying upon the decisions of the Co-ordinate Benches in the cases of DCIT vs. Infrastructure in ITA No. 198/Asr/2013, Ajay Electronics vs. ITO [2016] 52 ITr (Trib) 332 (Asr) and DCIT Vs. Sadguru Land Finance [2016] 52 ITR (Trib) 182(Asr), has categorically held that on opening balances of advances, no disallowance u/s 36(1)(iii) is warranted (refer para No.13 of the order), hence we do not have any hesitation to direct the Assessing officer to delete the disallowance in proportionate to opening balances.
7. Ground No.5 relates to freight paid to truck operators. The Assessing Officer added the aforesaid amount of 13 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO Rs.5,73,443/- by observing that the assessee had made certain payments in cash in excess of Rs.35,000/- in one single day to a person for hiring goods carriers and in contravention to provision of section 40A(3) of the Act. Further the bills were raised by the Truck Union and the Truck Union is a separate business entity in the form of Association of Persons consisting of its members and the Truck Union is an assessable person as per I.T. Act therefore, the version of the assessee do not fall within the ambit of the scope of sec.40A(3) of the Act, as the assessee has failed to discharge its legal expediency and obligation. The Ld. CIT(A) has affirmed the view of the Assessing Officer by observing that bills of Truck Freight has been raised by the Truck Union and freight has been paid in cash to a single entity which is in violation of provision of section 40A(3).
7.1 On the other hand, the assessee relied upon the judgment passed by the ITAT Bench, Jaipur in the case of DCIT vs. Mayur Sales, decided on 10th March, 2000 (ITA No.1887/JP/1992) wherein it has been held that payments made to Truck Drivers for freight and octroi charges falls under exceptional circumstances mentioned in Rule 6DD(j), and cannot be disallowed u/s 40A(3) of the Act. The Co-ordinate Bench also relied upon the CBDT Circular, 220, dated 31st May, 1997. Further, the assessee also relied upon the decision of the ITAT, Delhi(A) Bench in the case of Smt. Nilan Lal vs. DCIT decided on 10.05.2000 (2000) 19 CCH 0157 (Delhi Trib.) and submitted that the Tribunal has accepted that it is a general practice that the transporters do not accept the payments otherwise than in cash. Further, the assessee also relied upon the decision of the jurisdictional High Court in the case of CIT vs. Bal Kirshan 14 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO Jagdish Chand (ITA No.156 of 1996, decided on 12 July, 2007) (2007) 164 taxmann.com 0459 (P & H), wherein while deciding the reference/substantial question of law as to whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that various cash payments made to one party on one day were not required to be clubbed and treated as one cash payment and, for that reason, total cash payments exceeding Rs.2,500/- in a day to that party were not to be held as violative of section 40A(3) of the Act. The Hon'ble Court answered the reference/substantial question of law against the Revenue and in favour of the assessee. Further the Hon'ble Orissa High Court in the case of CIT vs. Aloo Supply Company, decided on 18th Dec., 1979 [1980] 121 ITR 0680 held that the statutory limit of Rs.2,500 u/s 40A(3) of the Act applies to payments made to a party at a time and not to the aggregate of payments made to a party in the course of the day as recorded in the cash book.
7.2 While coming to the instant case, the Revenue Department determined that the bills have been raised by the Truck Union whereas the assessee has claimed that the payments have been made to individual Truck Operators as per their billties and Truck Numbers, so there is no question of aggregating the figures of freight payable to Truck operator individually. Further despite submitting the billties of Truck, showing truck numbers and payments to them separately, the Assessing Officer has wrongly added the amount. Hence, considering the peculiar facts and circumstances and the rival contention/claim of the assessee and the Revenue Department, we are inclined to remand the instant issue qua freight charges, to the file of the 15 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO Assessing Officer to decide afresh on the basis of the judgments referred above.
8. Ground No.6 relates to the disallowance of depreciation of Rs.4,18,143/- against the Capital Incentives. The assessee though filed the written submissions challenging the said disallowance, however at the time of hearing of the appeal, did not raise the grounds specifically, therefore, the same was also not replied by the Revenue Department, hence, in our considered view, does not require any adjudication.
9. Ground No.3. Now coming to the ground No.3, which is legal in nature qua challenge to the jurisdiction of the Assessing Officer, whereby the assessee has claimed that the jurisdiction of the assessee falls under ACIT, Circle-III, Ferozepur, because the case was selected for scrutiny by the said Assessing Officer, but lateron, the case was transferred from ACIT, Circle-III, Ferozepur, to Income Tax Officer, Ward-III(2), Ferozepur and while transferring the case, neither notice nor opportunity of being heard was given to the assessee/appellant to raise the objection if any, qua transfer of the file, as it is mandatory provisions of the law and well settled that assessment proceedings cannot be transferred without giving an opportunity of being heard to the assessee and therefore, the assessment framed is without jurisdiction and illegal & void ab initio, resultantly no addition is sustainable.
The Revenue Department refuted the claim of the assessee by submitting that there is bar u/s 124(3) of the Act on raising objection qua jurisdiction after 30 days of serving the statutory notices, however the assessee claimed that bar of 16 ITA No.288/Asr/2014 (A.Y.2010-11) Bhagwati Rice Mills vs. ITO section 124(3) of the Act is not applicable to the instant case. On specific query by the Bench qua transfer of the case from ACIT, Ward-III to ITO, Ward-III(2) u/s. 127 of the Act, the Revenue Department failed to bring on record the order u/s 127 of the Act, however, submitted that the case was transferred as per order dated 27.07.2011 u/s 120 of the Act by the Chief Commissioner of Income Tax, Amritsar. We realized that though it is a debatable issue, however at this juncture we are not inclined to adjudicate the issue because we have already decided the case on merit and partly allowed the appeal of the assessee and therefore, for the ends of justice, feel it appropriate not to dwell into the ground No.3 being legal in nature.
10. In the result, the appeal filed by the assessee stands partly allowed and remaining part remanded to the assessing officer for statistical purposes.
Order pronounced in open court on.26/06/2019.
Sd/- Sd/-
(VIKRAM SINGH YADAV) (N.K.CHOUDHRY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 26.07.2019
/PK/ Ps.
Copy of the order forwarded to:
(1) M/s. Bhagwati Rice Mills, Ferozepur Cantt.
(2) The ITO, Ward-III(2), Ferozepur.
(3) The CIT(A), Bathinda
(4) The CIT concerned
(5) The SR DR, I.T.A.T., Amritsar
True copy
By order