Income Tax Appellate Tribunal - Rajkot
Bhavani Industries, Rajkot-Gujarat vs Department Of Income Tax on 10 August, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
RAJKOT BENCH, RAJKOT
Before Shri A.L. Gehlot (AM) and Shri N.R.S. Ganesan (JM)
I.T.A. No.123/Rjt/2008
(Assessment year 2004-05)
Dy.CIT, Cir.2 vs M/s Bhavani Industries
Rajkot C/1-B, 236/3, GIDC
Aji Ind. Estate, Rajkot
PAN : AACFB8046R
(Appellant) (Respondent)
Date of hearing : 10-08-2011
Date of pronouncement : 12-08-2011
Appellant by : Shri MK Singh
Respondent by: written submission
ORDER
Per N.R.S. Ganesan, JM
This appeal of the revenue was disposed of by an order dated 29-05- 2009. Subsequently the revenue filed a miscellaneous application in M.A.No.05/Rjt/2010 saying that ground No.3 with regard to disallowance on account of prepaid insurance expenses was not disposed of. Accordingly this Tribunal by an order dated 25-02-2011 in MA No.05/Rjt/2011 restored the appeal on file only for the purpose of disposing of ground No.3 raised by the revenue with regard to prepaid insurance expenses. Accordingly, this appeal was posted for disposing of ground No.3 with regard to prepaid insurance.
2. Even though the notice was served on the assessee no one appeared on behalf of the assessee at the time of hearing. However, written submission was 2 ITA No.123/Rjt/2008 filed on behalf of the assessee with a request to dispose of the appeal on the basis of the written submission. Accordingly we heard the ld.DR and proceeded to dispose of the appeal after considering the written submission filed by the assessee.
3. Ground No.3 is with regard to disallowance of Rs. 1,30,245 towards prepaid insurance expenses. In the written submission the assessee claims that a similar disallowance was deleted by this Tribunal in the case of DCIT vs Turbo Bearing Pvt Ltd ITA No.447/RJT/08 dated 17-12-2009. The assessee has also claimed in the written submission that in assessee's own case for the assessment year 2005-06 the CIT(A) allowed the claim of the assessee with regard to prepaid insurance premium and no appeal was filed against that issue before this Tribunal. Therefore, according to the assessee, the issue is covered in favour of the assessee by the order of this Tribunal in the case of DCIT vs Turbo Bearing Pvt Ltd (supra).
4. We have heard the ld.DR also. He submitted that he is placing his reliance on the observations made by the assessing officer.
5. We have considered the submissions of the ld.DR and have also considered the written submissions of the assessee. The assessing officer disallowed the claim of the assessee on the ground that the entire bill for payment of the insurance premium was not produced before the assessing officer. Two bills filed before the assessing officer pertain to prepaid insurance 3 ITA No.123/Rjt/2008 premium. The assessee claims that the issue was covered by the order of this Tribunal in the case of DCIT vs Turbo Bearing Pvt Ltd (supra). We have also carefully gone through the order of the Tribunal in the case of DCIT vs Turbo Bearing Pvt Ltd (supra). The assessee in the case of DCIT vs Turbo Bearing Pvt Ltd (supra) had debited Rs.1,49,050 in the profit & loss account. The assessing officer disallowed the same on the ground that it relates to prepaid insurance premium. The CIT(A) deleted the addition. On further appeal by revenue, this Tribunal found that the assessee was consistently following this practice of paying insurance premium. The order of CIT(A) was confirmed. In the case before us the assessee claims that for the assessment year 2005-06 a similar disallowance was deleted by CIT(A). However, the copy of the order was not produced before this Tribunal. Therefore it needs to be verified. It is also not known whether the assessee was consistently following this method for all the years. In the absence of any material we are unable to record any finding on this issue. Moreover, the assessee has produced only two bills before the assessing officer. For the purpose of claiming the insurance premium the assessee has to necessarily produce the entire bills. Therefore, the matter needs to be reconsidered after considering all the bills issued by the insurance company and the method of accounting which is regularly followed by the assessing officer. Accordingly the order of the lower authority is set aside on this issue and the issue of prepaid insurance premium is remitted back to the file of the assessing officer. The assessing officer shall reconsider the issue in the light of the material evidence that may be filed by the assessee to prove the payment of 4 ITA No.123/Rjt/2008 insurance premium and thereafter decide the issue in accordance with law after considering the method of accounting that was consistently followed by the assessee.
6. Ground No.3 raised by the assessee is disposed of accordingly. The other part of the order dated 29-05-2009 shall stand as such.
7. In the result, the appeal of the revenue stands partly allowed, for statistical purpose.
Order pronounced in the open court on 12-08-2011.
Sd/- sd/-
(A.L. Gehlot) (N.R.S. Ganesan)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Rajkot, Dt : 12th August, 2011
pk/-
copy to:
1. Assessee
2. Revenue
3. the CIT(A)-III, Rajkot
4. the CIT-II, Rajkot
5. the DR, I.T.A.T., Rajkot
(True copy) By order
Asstt.Registrar, ITAT, Rajkot