Income Tax Appellate Tribunal - Chennai
Assistant Commissioner Of Income Tax, ... vs Vijay Dairy And Farm Products Private ... on 19 March, 2025
आयकर अपीलीय अिधकरण, 'ए' यायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
'A' BENCH: CHENNAI
ी एबी टी. वक , ाियक सद एवं
ी मनोज कुमार अ वाल, लेखा सद के सम
BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND
SHRIMANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER
आयकरअपीलसं./ITA No.483/Chny/2024
िनधा रणवष /Assessment Year: 2019-20
The ACIT, v. M/s.Vijay Dairy &
Central Circle-1, Farm Products Pvt. Ltd.,
Trichy. Trichy-Thuraiyur Main Road,
Peramangalam,
Musiri Tk.,
Trichy-621 006.
[PAN: AAACV 2113 N]
(अपीलाथ /Appellant) ( यथ /Respondent)
Department by : Mr. Nilay Baran Som, CIT
Assessee by : Mr. N. Arjun Raj, Advocate
सुनवाईक तारीख/Date of Hearing : 29.01.2025
घोषणाक तारीख /Date of Pronouncement : 19.03.2025
आदेश / O R D E R
PER ABY T. VARKEY, JM:
This appeal has been preferred by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals), (hereinafter referred to as "the Ld.CIT(A)"), Chennai-19, dated 29.12.2023 for the Assessment Year (hereinafter referred to as "AY") 2019-20. ITA No.483/Chny/20
/Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 2 ::
2. Brief facts as noted are that, the assessee company is engaged in the business of procuring, processing and selling of milk and milk products. For AY 2019--20, the assessee company pany had filed its return of income on 27.09.2019 declaring total income at Rs.1,29,06,110/-.
Rs.1,29,06,110/ Prior thereto, a survey u/s.133A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') was conducted on 19.02.2019 attheir premises, and the survey team is noted to have found certain discrepancies in their books of accounts and the Income Tax Return (ITR),, for which they recorded the statements of Smt. VidhyaMadan Mohan [Executive Director], Shri. S.C. Paneerselvam, [GM (Finance)] and other key individuals of the assessee company. The AO in the assessment framed u/s 143(3) of the Act dated 21.09.2021 for the relevant AY 2019-20 2019 is noted to have made additions on account of (a) unaccounted purchases of Rs.5,45,50,646/- under Section 69A of the Act, (b) disallowance of expenses incurred on freezer boxes supplied to their agents of Rs.52,62,942 holding it to be capital in nature, (c) disallowance of salary of Rs.30,23,496/- for want of supporting details, (d) disallowance of expenses towards owards rent & professional fees of Rs.6,99,803/ Rs.6,99,803/- and Rs.2,76,784/- respectively. The AO accordingly computed the total income of the assessee at Rs.7,67,19,781/-
Rs.7,67,19,781/ instead of Rs.1,29,06,110/-
Rs.1,29,06,110/ as returned by the assessee. Aggrieved, the assessee preferred an appeal ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 3 ::
before the Ld. CIT(A) who was pleased to delete the additions. Now, the Revenue is in appeal before us on the following grounds: -
"1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law.
2. The Ld.CIT(A) erred in deleting the addition of Rs.5,45,50,646/ made towards unaccounted purchase of milk/unaccounted excess stock within the meaning of Sec.69A of the Act, being the value of 20,60,848 litres of milk quantified as difference in purchases during duri the survey.
2.1 The CIT(A) erred in failing to appreciate that the loose sheet No.122 contains the working prepared during survey, in which quantity as per Raw Chilled Milk Registers(RCM) and purchase as per SAP were compared and the assessee had not provided ovided any satisfactory explanation in respect of 20,60,848 litres either during survey or assessment proceedings, thus the AO rightly made addition by invoking provision u/s. 69A.
3. The Ld.CIT(A) erred in deleting the disallowance of expenses of Rs.52,62,942/-incurred incurred on providing freezer boxes to agents holding that they are revenue in nature, without appreciating that the freezer belonged to the assessee company and could be taken back on termination of agency and hence to be considered as capital in nature.
na
4. The CIT(A) erred deleting in the disallowance of salary expenses amounting to Rs.30,23,496/- claimed to be made to staff of Village level Collection centers, without appreciating that the assessee had not furnished supporting documents like break up of name of beneficiaries, account number, amount of salary, date of credit into their bank accounts to ascertain the genuineness of transaction.
5. For these grounds and any other ground including amendment of grounds that may be raised during the course course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored.
3. Ground No.1 is general in nature which doesn' doesn't require any adjudication.
4. Ground No.2 is against the action of the Ld.CIT(A) Ld.CIT(A deleting the addition of Rs.5,45,50,646/-
Rs.5,45,50,646/ made towards unaccounted purchase of milk/ unaccounted excess stock made u/s.69A of the Act being the value ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 4 ::
of 20,60,848 liters of milk which was quantified as difference in purchase during the course of survey.
4.1 The facts as noted are that, the AO had observed that, the Authorized Officer in the course of survey had found that there existed a difference of 20,60,848 litresof milk between the loose sheet in Sl No. 122 and the quantity of milk purchased as maintained in the SAP data by the assessee, and that this discrepancy could not be explained by the General Manager (finance) as well as the the Executive Director of the assessee. The assessee, in the course of assessment, is noted to have explained that, the purported loose ose sheet Sl. No. 122 which was impounded during the course of survey,, was not found from their premises, premises but was prepared at the instructions of the survey team by their office staff. For this, the assessee brought to notice the statement given by the Executive Director in the course of survey wherein he clearly stated that this loose sheet was typed by the office staff at the instance instance of the survey team, team and that they need time to reconcile this voluminous data with the SAP data. The relevant extracts of his statement, is noted to be as under: -
"I understand as you just explained that the RCM data mentioned about has been typed in excel during the course of this survey by our staff. This voluminous data typed has to be verified, and the data extracted from SAP also has to be validated"ITA No.483/Chny/20
/Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 5 ::
4.2 The assessee therefore explained that, this loose-
loose-sheet was not reliable as it was the workings workings prepared by the investigating officers and not any material which was already existing at the time of survey. It was submitted that, this excel sheet was typed/prepared from the manual registers & records found in the course of survey, which not only onl contained the quantitative details of milk purchased from suppliers, but also intra-transfers within the factory factor from one batch to another.
another It was thus explained that, this excel sheet had no rational basis as it contained absurd quantitative details, for for the reason that the inter-batch/unit inter transfers were also taken as purchases from suppliers in this excel noting's.. The assessee further sought to corroborate their explanation with the fact that, there was no difference in physical inventory of stock and stock as per SAP data found at the time of survey and also no material evidencing any unaccounted purchases was found at the time of survey. These contemporaneous facts, according to the assessee, supported their case, that this loose-sheet loose was unreliable and that there was no unaccounted purchases as was being wrongly alleged by relying on the said loose-sheet sheet no. 122. The AO however is noted to have rejected this as an afterthought explanation and accordingly added the un-reconciled reconciled difference of 20,60,848 liters of milk,, by adopting average rate per liter and thereby made an addition of Rs.5,45,50,646/-
Rs.5,45,50,646/ u/s 69A ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 6 ::
of the Act. On appeal the Ld. CIT(A) deleted the same. Now the Revenue is before us.
4.3 The Ld. DR appearing for the Revenue has contended that the explanation given by the assessee denying the contents of loose sheet no. 122 was an afterthought and therefore the addition ought to be upheld.
Per contra, the Ld. AR supported the order of the Ld. Ld. CIT(A).
4.4 Heard both the parties. The issue-in-dispute issue dispute before us relates to the difference in quantitative details of the purchases of Raw Chilled Milk ('RCM') as found noted on loose sheet no. 122 vis-à-vis the purchases as per SAP data. We find that, that, before the Ld. CIT(A), the assessee had submitted that, this loose-sheet loose sheet no. 122 was not found in the course of survey but was typed in an excel sheet by an office staff at the instance of the survey team, and had therefore urged that its contents were not reliable and hence could not be viewed adversely. The Ld. AR explained to us that, when the survey was conducted at the assessee's premises, several stock- registers were found to be manually maintained at the floor level. Since these registers were voluminous, voluminous, the investigating officer wanted to reconcile the noting's in these manual registers with SAP data, for which they required one floor staff to simply type the quantitative details mentioned in all these registers in an excel sheet, for their working worki purposes, which was carried out by the floor staff in a short span of time. ITA No.483/Chny/20
/Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 7 ::
He further explained that, the floor staff didn't did apply their mind to the contents of these manual registers, registers but simply typed the details onto an excel sheet at the time of survey.
survey. According to the Ld. AR, this fact was verifiable from the time-stamp time stamp which would be discernible from this excel sheet, which was printed and seized by way of loose-sheet loose sheet no. 122 in the course of survey. We find this explanation of the assessee to be plausible, in light of the statement of the Executive Director recorded at the time of survey, which is being extracted again below, -
"I understand as you just explained that the RCM data mentioned about has been typed in excel during the course of this survey by our staff. This voluminous data typed has to be verified, and the data extracted from SAP also has to be validated"
4.5 Having regard to the above and the facts as discernible from records, we countenance the following findings of the Ld. CIT(A) holding this loose-sheet sheet to be unreliable, :-
:
"6.2.7 ..Thus Thus from the above fact it can be inferred that the loose sheet relied upon by the AO is nothing but the data prepared during the course of survey by comparing the SAP data and RCM data prepared by the e staff at time of survey. The RCM data prepared by staff during the course of survey has not revealed the true affairs, since the data was not verified properly.
6.2.8 The undersigned is of the view that the loose sheet relied upon by the AO in the assessment assessment order is not the one which was prepared by the Appellant during the course of its business. Obviously, it is the comparative figures prepared during the course of survey by the survey team. On account of this, the character of "loose sheet" to treat ass incriminating material, has lostits significance."
significance ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 8 ::
4.6 To buttress the above Ld. CIT(A)'s findings, the Ld. AR also brought to our notice that, the noting's in this excel sheet contained inter unit/batch transfers, which was discernible from the noting's on the excel sheet image reproduced in the assessment order. Having perused the same, we find merit in his argument that the figures mentioned on this excel sheet didn't solely contain details of purchases from suppliers, suppliers but inter-unit and inter-batch batch transfers taken from the factory registers and hence it was not possible to reconcile these figures with purchases as per SAP data, due to improper, incomplete and non-verifiable non verifiable data.
4.7 According to us, the unreliability of the above loose-sheet loose is also found to be corroborated from the fact that, there was no discrepancy in physical stock and stock as per SAP data found by the survey authorities.
authorities It is also observed that, the survey authorities didn't did t find even a single instance or evidence which suggested that, the assessee had effected any sales in cash or had made any unaccounted purchases in cash. Had the assessee made such huge quantity of unaccounted purchases during the year, some evidence in form of difference in physical stock, noting's of cash purchases or cash sales etc. would have been found in survey. However, the absence of any such incriminating evidence or details, supports the assessee's plea that, the above referred loose-sheet loose was not ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 9 ::
reliable and that the assessee had not effected effected any unaccounted purchases outside the books of accounts. 4.8 Apart from the above, we also countenance the Ld. CIT(A)'s following finding that, the invocation of Section 69A of the Act by the AO was legally untenable, as it did not have any application on the given facts of the present case. The relevant findings taken note of by us is as follows: -
"6.2.11 In the instant case the AO has invoked the provisions of section of section 69A of the Act to treat the alleged difference as unaccounted purchase / unaccounted excess stock in the order. Whereas it can be seen that the Appellant company was not found to be owner of any money, bullion, jewellery or other valuable article which is not recorded in the books of accounts of the Appellant company by the survey rvey team. Further the AO has not called for any explanation in this regard and in the absence of any such explanation, the AO has not made any findings that the explanation offered in his opinion is not satisfactory. Thus the undersigned is of the view that that the AO has inappropriately invoked the provisions of section 69A of the Act to treat the difference in stock as unaccounted purchase / unaccounted excess stock. Accordingly it is considered that the addition made by the AO treating the difference as unaccounted unaccounted purchase / unaccounted excess stock is not sustainable both on legality and merits."
4.9 In view of the above, we see no reason to interfere with the order of Ld. CIT(A) deleting the addition made on account of unaccounted purchases of RCM. Accordingly, Accordingly, this ground of Revenue stands dismissed.
5. Ground No. 3 of the Revenue is against the order of Ld. CIT(A) deleting the disallowance of sales promotion expenses of Rs.52,62,942/-
Rs.52,62,942/ made by the AO holding it to be capital in nature. The facts as noted are ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 10 ::
that, during the relevant year, the assessee had debited sum of Rs.52,62,942/- towards sales promotion expenditure,, which the AO found comprised of the cost of freezer boxes provided to the retail vendors by the assessee. According to the AO, these freezer ezer boxes belong to the assessee and could be taken back if and when the contract with a particular vendor ends and therefore, it was in the nature of capital asset and not revenue expenditure.
expenditure The AO thus disallowed the cost of purchase of freezer boxes holding it to be capital in nature. 5.1 On appeal, the Ld. CIT(A) is noted to have deleted the disallowance by observing as under: -
"6.3.6 The undersigned has carefully examined the submission of the Appellant. As submitted by the Appellant there can be no dispute about the expenditure incurred by the appellant in purchase of freezer and the same was put into business activities of the Appellant.
Appellant. It is also not disputed that the freezer are lying at various selling points at all times. From the facts it can be seen that oncethe freezers are given to the selling vendors, the Appellant has no control over the said freezers and the same is left with with the agents. It can also be appreciated that no agent will return back the used freezer to the Appellant. When the Appellant has lost its control over the product, there can be no point in arguing that the freezers are the assets of the Appellant Company.
Compan In practice, it is a kind of incentive / gift given to the Agents to promote sales to the Appellant as well as the agent. In addition in the absence of such freezers there is every possibility that any non-sold non sold item will perish at the selling point. In such scenario the findings of the AO that these freezer boxes belong to the company and shall be taken back if and when the contract with a particular endsis endsis contrary to the practice in vogue, once the freezers are handed over to the Agent, the Appellant lost ost its control over such asset.
6.3.7 The Hon'ble Apex Court in the case of Empire Jute Co Ltd Vs. CIT-1980 1980 124 ITR 1 (SC) has held that to treat a particular expenditure pertains to the character of revenue or capital, there does not exist an ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 11 ::
all-embracing ing formula which can provide a ready solution to the problem; no touchstone has been devised and that every case has to be decided on its own facts keeping mind the broad picture of the whole operation in respect of which the expenditure has been incurred.
incurred 6.3.8 The undersigned has taken into consideration the broad picture of the operation in respect of which the expenditure was incurred by the Appellant, while doing so naturally the expenditure has to be seen from the eye of the appellant. The appellant Company has reported a turnover of Rs.106,33,55,523/-
Rs.106,33,55,523/ and claimed a sum of Rs.52,62,942/-
Rs.52,62,942/ towards freezer boxes supplied to the agents which is 0.49% of the gross turnover. The AO has failed to look into the products sold by the Appellant which are perishable perishable items. The Appellant has put forward the contention that in the absence of such a freezer, the agents will not be able to sell the products to the end consumer which may result in return back of the product. The returned product will have no value which whic may result in loss. When this overall situation is considered, the undersigned is of the view that providing of freezer to agents can only be a revenue expenditure and cannot be taken as capital expenditure since the Appellant has lost its control once the the freezers are handed over to the agents. In this backdrop, the undersigned is not inclined to accept the contention of the AO to treat the amount as capital expenditure. In view of this, all the grounds raised by the Appellant upon this issue are treated as allowed and the AO is directed to delete the addition of Rs. 52,62,942/- treated as capital expenditure for the AY 2019- 2019-20."
5.2 Aggrieved, the Revenue is now in appeal before us. 5.3 Heard both the parties. From the material placed on record, it is noted oted that, the assessee is engaged in the business of processing & supply of milk & milk products, which by its very nature is perishable. Accordingly, when the assessee supplies the milk & milk products to its vendors for further sale to consumers, it also also provides freezer boxes to the vendors to store the said milk/milk milk milk products to prevent it from getting spoilt/damaged.
damaged. These freezer boxes are therefore provided to the vendors to facilitate the business of the assessee, because as per the ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 12 ::
agreed terms, iff the milk/milk-
milk products gets spoilt/damaged
damaged or perishes
early than expected, the vendors wouldn't would t pay for the same. We agree with the assessee, that these freezer-
freezer boxes are imperative to facilitate the sales, as in the absence of the freezer- boxes, the agents may not be able to sell the products to the end-consumer end and that the sales-returns sales would increase by manifolds. These freezer-
freezer boxes are noted to remain in possession of the agents/vendors and since individually these are not of any major value, and nd having regard to the wear & tear, these freezer boxes are seldomly returned back to the assessee. On the given facts therefore, we are of the view that, the expenses incurred for purchasing these freezer boxes supplied to the agents/vendors agents vendors are meant to facilitate the assessee's business and doesn't does give the assessee any advantage in capital field.
5.4 At this stage, it would be relevant to discuss the principles laid down judgment of Hon'ble Supreme Court in the case ofEmpire Empire Jute Vs CIT (124 ITR 1) relied upon by the Ld. CIT(A), wherein the theory of expenditure of enduring nature, was repelled, in a great measure. In that case, the Hon'ble Supreme Court noted that by decided cases, that the Courts had evolved various tests for distinguishing between the capital and revenue expenditure, expenditure but no test is paramount or conclusive. It was accordingly held that, every very case has to be decided on its facts keeping in ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd.
:: 13 ::
mind the broad picture of whole operation in respect of which the expenditure has been incurred.
incurred. One such test which was specifically out and may be relevant for our purpose was "when an spelled-out expenditure is made not only once and for all, but with a view to bringing into existence or an advantage for which enduring benefit of a trade, the expenditure ture can be treated as capital in nature and not attributable to revenue". However, the Hon'ble Apex Court in the same breath cautioned that,, it would be misleading to suppose that, that in all cases securing a benefit for business expenditure would be capital expenditure. The Court is noted to have accordingly held as under: -
"There may be cases where expenditure, even if incurred for obtaining advantage, of enduring benefit, may, none-the-less, none less, be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assesses that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably whilee leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. The test of enduring benefit is therefore not a certain or conclusive test and it cannot be applied blindly and mechanically without regard to the particular facts and circumstances of a given case."
case.
(emphasis supplied) 5.5 We find the decisions rendered by the Hon'ble Supreme Court in the case of CIT v. Associated Cement Companies Ltd. (172 ITR 257),
257) ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 14 ::
and Hon'ble Rajasthan High Court in the case of CIT v. Anand Gum Industries (154 ITR 680) to be on the same lines. 5.6 Applying the aforesaid principle to the facts of this case, we observe that, the impugned d expenses incurred on freezer boxes to facilitate sales of the assessee, was rightly treated by the Ld. CIT(A) as revenue in nature, as there is no advantage which has accrued to the assessee in the capital field. Rather, the the expenditure was incurred to facilitate f the assessee's trading operations. In support of our foregoing view, we gainfully refer to the decision of the Hon'ble Delhi High Court in the case of CIT Vs Pepsico India Holdings Ltd (207 Taxman 5) wherein the expenditure incurred on glow signs & neon signs installed at several locations for advertisement of their products was held to be revenue in nature, as it was meant to facilitate the business of the assessee and did not give any permanent advantage in capital field, though there was an enduring uring advantage in future.
5.7 In light of the above reasons and the given facts of the present case, as discussed above, we countenance the above findings of Ld. CIT(A) holding the expenditure on freezer boxes supplied to agents/vendors vendors for storing the assessee's milk products to be revenue in nature. Accordingly, this ground is dismissed. ITA No.483/Chny/20
/Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 15 ::
6. Ground No. 4 raised by the Revenue is against the Ld. CIT(A)'s action of deleting the disallowance of salary expenses of Rs.30,24,546/-.
Rs.30,24,546/ The e facts on records reveals that, the AO while examining the books of accounts found that a bulk sum of Rs.30,23,496/-has has been claimed as salary paid to Village Level Collection Centers ('VLCC'). The AO observed that, the salary had not been paid specifically to any individual person and that the details of the bank account of the individual person to which payment was done, was not made available by the assessee. According to AO therefore the amount unt debited by way of 'VLCC staff salary' remained unsubstantiated and accordingly he disallowed the same. On appeal, the Ld. CIT(A) deleted the impugned disallowance. Aggrieved, the Revenue is in appeal before us.
6.1 Heard both the parties. It is observed observed that, the assessee is in the business of processing and selling milks. The assessee therefore procures milks from several villages, who transfer the raw milk to chilling centers, which is turn, is transported to the factory. The assessee has accordingly employed staff at these village level procurement centers,, to whom salary is paid on monthly basis. As is commonly found in major institutions, the salary is paid in bulk in form of a single debit to the Bank, through a consolidated cheque/RTGS, and the Bank Bank in turn, credits the salaries in the accounts of the respective beneficiaries/employees.
beneficiaries employees. This is a common ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd. :: 16 ::
practice adopted by corporates these days, as it prevents the administrative hassle of drawing up several cheques for individual employees each month.
nth. Instead, effectively this task is outsourced to the assessee's Bank, who receives the payment in bulk and effects the payment of salaries to individual account of employee/s, whose details/KYC KYC have already been provided to the Bank. Accordingly, in the th bank book of such an assessee, one single consolidated debit towards salary expense is found, as opposed to individual debits in relation to salaries of each employee/s. The AO is noted to have misunderstood this common business practice and wrongly doubted doubted the genuineness of the single debit appearing in bank statement by way of 'VLCC staff salary' as opposed to salaries being individually paid to the respective bank accounts of the employee/s. We find that, the Ld. CIT(A) had rightly appreciated the factual tual matrix of the case by holding as under:-
under:
"6.4.4 The undersigned has carefully examined the issue. The Appellant during the course of Assessment Proceedings has submitted before the A.O. that the amount claimed salary was paid by way of consolidated cheque cheque to M/s. AXIS Bank Limited, Manachallur Branch, to facilitate them to disburse the amount through bank to the respective beneficiaries. The Appellant submitted name of the person to whom the salary was paid before the A.O. To substantiate this claim the the Appellant submitted the details of amount paid, Account No., Name of the Bank, IFS Code. The A.O. has simply disallowed this amount for want of proof. It may be appreciated that the expenditure was incurred by making a consolidated payment to a bank and the bank in turn credited the amount in the respective bank account of the beneficiaries. This is the practice followed by all the major ITA No.483/Chny/20 /Chny/2024 (AY 2019-20) M/s.Vijay Dairy & Farm Products Pvt. Ltd.
:: 17 ::
institutions in paying the salary to their employees. When the Appellant is able to identify the Name of the Individual, Individual Amount, Account No., Bank Branch and IFS Code, there exist no ground to suspect the transaction. When the evidences are un-rebuttable, un there can be no ground on the part of the A.O. to disallow such expenditure unless contrary findings are made in the order.
or In view of this, the undersigned has considered that disallowance of salary expenses claimed by the Appellant contemplated by the A.O. is not sustainable on merits. Accordingly, all the grounds raised by the Appellant upon this issue are hereby treated treate as allowed, and the A.O. is directed to delete the addition of Rs.30,23,496/- being the disallowance of salary." 6.2 We thus see no reason to interfere with the above findings of the Ld. CIT(A) and accordingly dismiss this ground of the Revenue.
7. In the he result, appeal filed by the Revenue is dismissed.
Order pronounced on the 19th day of March, 2025,, in Chennai.
Sd/- Sd/
Sd/-
(मनोज कुमार अ
अ वाल
वाल) (एबी टी.. वक )
(MANOJ KUMAR AGGARWAL) (ABY
ABY T. VARKEY)
VARKEY
लेखासद य/ACCOUNTANT MEMBER याियकसद य/JUDICIAL MEMBER
चे ई/Chennai,
दनांक/Dated: 19th March,, 2025.
20
TLN
आदेशक ितिलिपअ ेिषत/Copy
Copy to:
to
1. अपीलाथ /Appellant
2. थ /Respondent
3. आयकरआयु /CIT,, Chennai / Madurai / Salem / Coimbatore.
4. िवभागीय ितिनिध/DR
5. गाडफाईल/GF
C