TEWARI WAREHOUSING CO. PVT. LTD.,KOLKATA vs. D.C.I.T., CIRCLE - 11(1), KOLKATA, KOLKATA

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ITA 700/KOL/2022Status: DisposedITAT Kolkata23 February 2023AY 2014-20155 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed the appeal on grounds related to undisclosed receipts and packaging material purchases, reversing the CIT(A)'s findings. It also allowed the appeal regarding electricity load extension charges, holding them as revenue expenditure. The ground concerning PF/ESI payments was dismissed as not pressed.

What were the facts?

The assessee, engaged in tea blending and packing, appealed against additions made to its income for AY 2014-2015. These additions included undisclosed receipts, disallowance for packaging material purchases, electricity load extension charges, and delayed PF/ESI payments.

What were the issues?

Whether additions based on 26AS without concrete evidence are valid, if TDS is applicable on packaging material purchases, and if electricity load extension charges are revenue or capital expenditure.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 143(3),Section 250,Section 139(1)

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Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA

Before: SRI SANJAY GARG & DR. MANISH BORAD

order

: February 23rd, 2023 ORDER

Per Manish Borad, Accountant Member:

1.

This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2014-2015 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals)-NFAC, Delhi [in I.T.A. No.: 700/KOL/2022 Assessment Year: 2014-2015 Tewari Warehousing Co. Pvt. Ltd. short ld. “CIT(A)”] dated 29.11.2022 arising out of the assessment order framed u/s 143(3) of the Act dated 31.12.2016.

2.

The assessee has raised the following grounds of appeal: “1. For that the Ld. CIT(A) erred in confirming the addition of Rs. 95845 towards undisclosed receipt from Coochbehar Tea Co ltd based on 26AS Statement when the appellant denied any transaction.

2. For that the Ld. CIT(A) erred in confirming the addition of Rs.253575 towards Tea Bag Packing u/s 40(a)(ia) when TDS not applicable on purchase of packaging material.

3. For that the Ld. CIT(A) erred in confirming the addition of Rs. 1188307 toward Electricity load extension charges when said expenditure is revenue in nature.

4. For that the Ld. CIT(A) erred in confirming the addition of Rs. 324870 for delayed payment of Employees PF ESI when the same paid before due date specified u/s 139(1) of The IT Act.”

3. Brief facts of the case as culled out from the records are that the assessee is a private limited company engaged in the business of loading, unloading, blending and packing of raw tea. E-return for AY 2014-15 filed declaring total income of Rs. 1,99,63,630/-. Case selected for scrutiny followed by serving of notices u/s 143(2) & 142(1) of the Act. Assessment u/s 143(3) of the Act completed on 31.12.2016 making various additions and assessing income at Rs. 2,34,65,970/-. The additions made by ld. AO were challenged before ld. CIT(A) but the assessee failed to get any relief.

4. Aggrieved, the assessee is now in appeal before this Tribunal.

5. Ld. Counsel for the assessee vehemently argued referring to the written submissions filed before the lower authorities and also various details. Reference was also made to the decisions namely I.T.A. No.: 700/KOL/2022 Assessment Year: 2014-2015 Tewari Warehousing Co. Pvt. Ltd. ITO vs. M/s. Star Consortium, order dated 07.04.2021 and also the judgment of Hon'ble Delhi High Court in the case of CIT vs. Dart Manufacturing India Pvt. Ltd., ITA 909/2008 dated 12.08.2008.

6.

Per contra, ld. D/R vehemently argued supporting the orders of both the lower authorities.

7.

We have heard rival contentions and perused the records placed before us. Ground no. 1: This ground relates to addition of Rs. 95,845/- for the alleged undisclosed receipt from Coochbehar Tea Co. Ltd. We notice that 26AS statement showed a transaction of Coochbehar Tea Co. Ltd. TDS deducted thereon was claimed by the assessee against the tax liability. We however, find that the assessee has throughout the proceedings before the lower authorities and before us has contended that no such transaction took place with Coochbehar Tea Co. Ltd. Revenue authorities have also not placed any record which could indicate that such transaction has taken place between the assessee and Coochbehar Tea Co. Ltd. We, therefore, are of the considered view that for entry appearing in 26AS statement, addition cannot be made in the hands of the assessee unless until a complete evidence is put forth to prove that such transaction has actually taken place. We, therefore, reverse the finding of ld. CIT(A) and allow this ground of the assessee with the direction that the assessee will not be allowed the claim of TDS on the alleged receipt of Rs. 95,845/-. Thus, ground no. 1 raised by the assessee is allowed.

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