What did the Tribunal hold?

The Tribunal held that the assessee failed to provide any documentary evidence or supporting details before any of the authorities. Without such material, the contentions could not be accepted solely on oral submissions.

The assessee appealed against the disallowance of written-off sugar subsidy receivable and business expenditure. The assessee argued that the subsidy was already credited as income in earlier years and the expenditure was for business purposes.

What were the issues?

Whether disallowance of written-off amounts is justified when the assessee fails to provide supporting evidence. Whether the CIT(A) violated principles of natural justice by not providing an opportunity to substantiate claims.

Hp State Civil Supplies… vs DCIT | ITAT Chandigarh 2026

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

Before: SHRI LALIET KUMAR & SHRI KRINWANT SAHAY

For Appellant: CA राजव क ओर से/

Hearing: 21.04.2026Pronounced: 22.04.2026

Per Krinwant Sahay, AM : The Captioned appeals have been preferred by the Assessee against the separate orders of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 21.10.2023 and 30.08.2023 respectively.

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Grounds of appeal, as raised by the Assessee are as under: -

ITA No. 1493/Chd/2025

That Disallowance of Write-off of Sugar Subsidy Receivable - ₹1,99,17,262/-

That the learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance of 1,99,17,262/- representing excess sugar subsidy receivable written off during the year, despite the fact that the same had already been credited as income in earlier assessment years.

Disallowance of Business Expenditure - ₹5,00,000/-

That the learned CIT(A) has erred in upholding ₹5,00,000/- the disallowance of being expenditure incurred during natural calamity under administrative instructions, which was in the course of and for the purposes of the business of the appellant.

That the assessee prays permission to add, delete or amend one or more grounds of appeal.

ITA No. 1494/Chd/2025

That the learned CIT(A) has erred in law and on facts in confirming the disallowance of ₹4,13,46,285/-, being amounts genuinely written off during the year under consideration. These amounts were brought forward from earlier years, duly recorded in the books of account, and had already been recognized as income in the relevant previous years. The learned CIT(A) failed

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to appreciate that these write-offs were properly disclosed in the audited financial statements and examined by statutory and CAG auditors without any adverse remarks. That the learned CIT(A) failed to provide a reasonable opportunity to the appellant to further substantiate the claim regarding irrecoverability of the written-off amounts, thereby violating the principles of natural justice. That the order of the learned CIT(A) is bad in law and against the facts and circumstances of the case. The appellant reserves the right to add, amend, alter or withdraw any ground of appeal at any stage of the appellate proceedings. That the assessee prays permission to add, delete or amend one or more grounds of appeal.

The Assessee, in both the appeals, has raised identical grounds of appeal. Since the facts and issues involved in these appeals are identical, the same are being heard together and are being disposed of by this consolidated order for the sake of brevity and convenience.

The Ld. Counsel for the Assessee, during the course of hearing, reiterated the submissions made before the lower authorities and submitted that, in the case of the Assessee for A.Y. 2016–17 (ITA No. 1493/Chd/2025), the Commissioner of Income Tax (Appeals) erred in confirming the disallowance of ₹1,99,17,262/-, being

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excess sugar subsidy receivable written off during the year, despite the fact that the same had already been credited as income in the earlier assessment years. It was further submitted that the Ld. CIT(A) has wrongly upheld the disallowance of ₹5,00,000/-, being expenditure incurred during a natural calamity under administrative instructions, which was incurred wholly and exclusively for the purposes of the business of the Assessee.

With regard to the appeal for A.Y. 2017–18 (ITA No. 1494/Chd/2025), the Ld. Counsel submitted that the Ld. CIT(A) has wrongly confirmed the disallowance of ₹4,13,46,285/-, being amounts genuinely written off during the year under consideration. It was submitted that these amounts were brought forward from earlier years, duly recorded in the books of account, and had already been recognized as income in the relevant previous years. However, the Ld. CIT(A) failed to appreciate that these write-offs were properly disclosed in the audited financial statements and had been examined by the statutory as well as CAG auditors

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without any adverse remarks. It was further contended that the Ld. CIT(A) failed to afford a reasonable opportunity to the Assessee to substantiate the claim regarding irrecoverability of the written-off amounts, thereby violating the principles of natural justice, rendering the impugned order unsustainable in law and on facts.5. Per contra Ld. DR strongly relied on the orders of the authorities below.

We have heard the rival submissions and perused the assessment order passed by the Assessing Officer, the appellate order of the Ld. CIT(A), and the material available on record. We find that the Assessee has not placed any documentary evidence or supporting details either before the Assessing Officer, the Ld. CIT(A), or even before the Tribunal. In the absence of any such material, the contentions raised by the Assessee cannot be accepted merely on the basis of oral submissions. Further, the Assessee has neither furnished any justification for its failure to file the requisite documents before the lower authorities nor made out any case for

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admission of additional evidence at the stage of hearing before the Tribunal for the captioned assessment years.

In these circumstances, we do not find any merit in the contentions advanced on behalf of the Assessee, nor do we find any reason to interfere with the findings recorded by the Ld. CIT(A). Accordingly, the orders of the Ld. CIT(A) for both the assessment years are upheld, and the grounds raised by the Assessee are dismissed.

In the result, both the appeals of the Assessee stand dismissed.

Order Pronounced on 22.04.2026.

Sd/- Sd/- ( LALIET KUMAR ) ( KRINWANT SAHAY) Judicial Member Accountant Member “आर.के.”

आदेश क� ��त�ल�प अ�े�षत / Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File

सहायक पंजीकार/ Assistant Registrar

HP STATE CIVIL SUPPLIES CORPORATION LIMITED,SHIMLA vs. DCIT/ACIT CIRCLE, SHIMLA

What did the Tribunal hold?

What were the facts?

What were the issues?

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