Income Tax Appellate Tribunal - Chandigarh
Kaushal Roller And Flour Mills Pvt. ... vs Assessee on 17 January, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH 'B' CHANDIGARH
BEFORE Ms.SUSHMA CHOWLA, JUDICIAL MEMBER
AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER
ITA No. 1151/CHD/2010
Assessment Year: 2006-07
Kaushal Roller &Flour Mills V Addl.CI T, Range
Pvt. Ltd., Indl. Area, Palampur.
Tahliwal,
Una.
PAN: AAACK-6899E
(Appellant) (Respondent)
Assessee by : Shri R.R.Thakur
Department by: Smt. Jaishree Sharma
Date of Hearing : 17.01.2012
Date of Pronouncement : 25.01.2012
ORDER
PER MEHAR SINGH, AM
The present appeal filed by the assessee is directed against the order dated 14.07.2010 passed by the ld. CI T(A) u/s 250(6) of the Income-tax Act,1961 (in short 'the Act').
2. In this appeal, the assessee has raised the following Grounds of Appeal:
"1. That the ld. CIT(A) has erred in not deciding the grounds of appeal of the appellant at Sr.No.1 wherein the ground was relating to wrongly computing the income u/s 144 by invoking the sub- section 3 of Section 145 without pointing out mistake in the books of accounts. The addition on this account may kindly be deleted.2
2. That the ld. CIT(A) has erred in conf irming the wrongly estimated taxable sale of Rs.1,00,00,000/- out of tax f ree sale without going through the f acts and circumstances of the case. The estimate of the ld. AO is not based on any circumstances and may be deleted.
3. That the ld. CIT(A) has erred in conf irming the addition of Rs.8,25,945/- in the case of the appellant by applying a GP rate of 8.5% which may kindly be deleted.
4. The ld. CIT(A) has erred in conf irming the addition of Rs.15,700/- under the head of charity and donation. The addition may kindly be deleted.
5. That the ld. CIT(A) has erred in conf irming the addition of Rs.20,000/- of penalty which was paid to the State Govt.of Punjab f or the benef it of the concern and may kindly be deleted.
6. That the CIT(A) has erred to conf irm the difference of depreciation which was wrongly calcul ated by the ld AO. The excess diff erence of depreciation added in the income of the appellant may kindly be deleted.
7. Any other ground which may be taken at the time of hearing with the approval of the Hon'ble ITAT."
2. Ground Nos. 6 & 7 are general in nature and need no separate adjudication.
3. Ground No.1 raised by the assessee is dismissed as not pressed, as stated by the ld. 'AR' in the course of present appellate proceedings.
4. In Ground No. 2, ld. 'AR' contended that the CIT(A) erred in confirming the estimated taxable sale of Rs.1 Crore out of tax free sale without going through the facts and circumstances of the case. Consequently, it was prayed that 3 the said addition may be deleted. Ld. 'AR' stated that the CIT(A) has not correctly worked out the details of closing stock as on 31.3.2005. Consequently, the conclusion drawn by the revenue authority is not based on correct factual position. Ld. 'DR' placed reliance on the order of the lower authorities. Ld. 'AR' filed the working of the trading account, which is reproduced hereunder :
Tr a di n g A c co u nt W h e at Br a n P er i o d 2 0 0 5 - 0 6 Dr Cr Qtl. Amount Qtl. Amount To 2 8 2 7 .7 1 1 2 5 5 8 1 4 .2 8 By 3 5 1 5 0 .1 1 15610515.34 O p e n in g s a le s Stock P u r c h as e s 2620.07 1163599.28 B r an Mi l l i n g g ai n 30630.00 13603089.30 & p r o d u c ti o n W h e at b r an B y S a le s 0 R e tu r n return C lo s in g 9 2 7 .6 7 4 1 1 9 8 7 .5 2 Balance Total 3 6 0 7 7 .7 8 1 6 0 2 2 5 0 2 .8 6 Total 36077.78 16022502.86"
5. The brief facts of the case are that the AO made an addition of Rs.1,50,000/- by rejecting the books of account of the assessee and applying GP rate at 8.5% at Rs.1 Crore, estimated sales stating that the company has transferred the sales from taxable item to tax free item. The ld. CIT(A), after appreciating submission filed before her, upheld the finding of the AO but restricted the sales at Rs.97,17,229/- after giving credit for opening stock of brawn at Rs.2,82,771/-. The contention of the ld. 'AR' is that the CIT(A) has not considered opening stock of brawn. Perusal of the trading account reveals that the opening stock, as mentioned by the CIT(A) represents the quantum (quintals of 4 2827.71) whereas the CI T(A) has taken the same in value as Rs.2,82,771/-. The ld. 'AR' has worked out the opening stock of bran at Rs.12,55,814/-. In view of this factual discrepancy, as transpired in the course of present appellate proceedings before the Bench, it is considered fair and reasonable to meet the ends of natural justice, to restore this issue to the file of the CI T(A) for the purpose of fresh adjudication in the light of the relevant material to be produced by the assessee and in accordance with relevant provisions of the Act. The assessee is directed to render necessary cooperation to the ld. CIT(A), who would give opportunity of being heard to the assessee. The issues raised by assessee in Ground Nos. 2 & 3 stands disposed of.
6. In Ground No.4, assessee contended that CIT(A) erred in making addition of Rs.15,700/- claimed under the head 'charity and donations'. Ld. 'AR' vide Ground No.5 also contended that the CIT(A) has erred in confirming the addition of Rs.20,000/- of penalty which was paid to the State Government of Punjab for benefit of the concern.
7. We have carefully perused the rival submissions and found that CIT(A) has validly upheld the said additions on the ground that the impugned penalty attributed to the infraction of law by the assessee. Therefore, no such expenditure incurred by the assessee, in the form of penalty on the ground of infraction of the law is admissible expenditure under the scheme of Income-tax Act. Similarly, the assessee has failed to adduce any documentary 5 evidence, justifying the donation claimed by him. Accordingly, CIT(A) upheld the said addition. No such evidence was filed by the assessee, even before the Bench and accordingly, we uphold the addition made by the CI T(A).
8. In the result, appeal of the assessee is allowed for statistical purposes, on the terms, as indicated above.
Order pronounced in the Open Court on 25 t h Jan.,2012.
Sd/- Sd/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25 t h Jan.,2012. 'Poonam' Copy to:
The Appellant, The Respondent, The CI T(A), The CIT,DR Assistant Registrar, I TAT Chandigarh