BHASKAR TES AND INDUSTRIES PVL. LTD. ,KOLKATA vs. ACIT,C.C-1(1), KOLKATA

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ITSSA 148/KOL/2023Status: DisposedITAT Kolkata27 February 2024AY 2010-115 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal, after hearing both parties and considering the available material, found it necessary to determine the correct income of the assessee. For Ground No. 1, concerning the addition made towards donation payments, the Tribunal directed the AO to revisit the issue by providing the assessee a reasonable opportunity of being heard and re-examining the issue afresh in accordance with law. For Ground No. 2, relating to the addition for prior year expenses, the Tribunal found it necessary to remand the issue back to the file of the AO after affording the assessee a reasonable opportunity of being heard in accordance with law. The appeal of the assessee was allowed for statistical purposes.

What were the facts?

The assessee, Bhaskar Tea And Industries Private Limited, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order of the CIT(A) for Assessment Year 2010-11. The case originated from a search and seizure operation under section 132(1) of the Income Tax Act, 1961, followed by a notice under section 153A. The assessee initially declared Nil income. The Assessing Officer (AO) made additions by disallowing various expenses. The assessee's appeal before the CIT(A) was partly allowed. Dissatisfied, the assessee is now before the ITAT. The dispute involves additions made towards donation payments and prior year expenses.

What were the issues?

1. Whether the ITAT should remand the issue of addition made by the AO towards donation payment amounting to Rs. 11,16,533/- to the AO for fresh adjudication, considering that the AO did not consider it in the assessment order and the CIT(A) did not address it properly. - Assessee's Contention: The AO added the donation to the income but did not consider it in the assessment order, leaving it disallowed. The CIT(A) also failed to address the issue properly. Therefore, the matter should be remanded to the AO for a fresh decision and allowance of the claim as per law. - Revenue's Contention: Not recorded. 2. Whether the ITAT should remand the issue of addition made by the AO in connection with prior year expenses amounting to Rs. 2,92,128/- to the AO for fresh adjudication, given that the AO disallowed the claim without discussion and the CIT(A) sustained the AO's order. - Assessee's Contention: Expenses amounting to Rs. 2,92,128/- relate to the previous year but accrued during the current year and were shown as "prior period expenses" as per accounting standards. The AO disallowed the claim without discussing the facts, and the CIT(A) sustained the AO's order. The issue should be remanded to the AO for re-examination. - Revenue's Contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 132(1),Section 153A

AI-generated summary — verify with the full judgment below

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

Before: Dr. Manish Borad & Shri Sonjoy Sarma]

Hearing: 27.02.2024Pronounced: 27.02.2024

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘B’, KOLKATA [Before Dr. Manish Borad, Accountant Member & Shri Sonjoy Sarma, Judicial Member] IT(SS)A. No. 148/Kol/2023 Assessment Year : 2010-11 Bhaskar Tea And Industries vs ACIT, Central Circle-1(1), Private Limited Kolkata PAN: AABCB 4084 F Appellant Respondent Date of Hearing 27.02.2024 Date of Pronouncement 27.02.2024 For the Assessee Shri P.K. Sanghai, AR For the Revenue Shri Abhijit Kundu, CIT, DR ORDER Per Sonjoy Sarma, JM: This appeal is filed by the assessee directed against the order passed by ld. CIT(A), Kolkata-20 dated 11.07.2023 relating to A.Y. 2010-11.

2.

Brief facts of the case are that a search & seizure operation u/s 132(1) was conducted in the business premises of the assessee followed by notice u/s 153A of the Act. In response to the notice, assessee filed its return of income declaring income at Nil. Subsequently, the ld. AO issued statutory notice upon the assessee and in response to the notices, the ld. AR of the assessee appeared time to time before him. After discussing various documents submitted by the AR, the ld. AO assessed the income of assessee and tax thereof being computed by disallowing various expenses:

2 IT(SS)A Nos. 148/Kol/2023 IT(SS)A Nos. 148/Kol/2023 AY: 2010-11 Bhaskar Tea And Industries Private Limited Bhaskar Tea And Industries Private Limited

3.

Aggrieved by the above order, Aggrieved by the above order, assessee went into appeal assessee went into appeal before the ld. CIT(A) where the appeal of the assessee was partly before the ld. CIT(A) where the appeal of the assessee was partly before the ld. CIT(A) where the appeal of the assessee was partly allowed.

4.

Dissatisfied with the above order Dissatisfied with the above order, assessee is in appeal before , assessee is in appeal before the Tribunal.

3 IT(SS)A Nos. 148/Kol/2023 AY: 2010-11 Bhaskar Tea And Industries Private Limited 5. Ground no. 1 is relation to addition made by AO towards donation payment made by the assessee amounting to Rs. 11,16,533/-. On this issue, while passing the impugned order by the ld. CIT(A) did not look into the fact by sustaining the order of AO which is under facts and circumstances of the case ought to be allowed as per the law. However, ld. AR stated before the bench that while framing the assessment, the ld. AO added donation to the income of assessee stating to be considered separately but in the assessment order he did not consider at all and remain disallowed it entirely. Similarly when the assessee went before the ld. CIT(A), the issue was never addressed properly. Therefore, he prayed before the bench that the matter may be remand back to ld. AO with the direction to decide the issue afresh and allow the claim of deduction in terms of appropriate provisions of law.

6.

We after hearing the submission of both the parties and considering the material available on record find that it is necessary to determine the correct income of the assessee. We direct the AO to revisit the issue by providing reasonable opportunity of being heard to the assessee by re-examining the issue afresh in accordance with law.

7.

Ground no. 2 is in relation to addition made by the AO in connection with prior year expenses amounting to Rs. 2,92,128/- to the income of assessee without any whisper in the assessment order and ld. CIT(A) while passing the impugned order did not look into the fact by simply sustained the order of AO which is not correct under the facts and circumstances of the case. In this case,

4 IT(SS)A Nos. 148/Kol/2023 AY: 2010-11 Bhaskar Tea And Industries Private Limited the ld. AR of the assessee submitted before this bench that in the assessee’s accounts there were certain expenses amounting to Rs. 2,92,128/- which relates to previous year but accrued during the current year. He further stated that these expenses were shown in the accounts of the assessee as per accounting standard “prior period expenses”. He further stated that while framing the assessment order, the ld. AO simply disallowed the claim of assessee without discussing about the facts of the case. Similarly, the ld. CIT(A) did not look into the fact of the case by sustaining the order of AO. The ld. AR therefore prayed before the bench to remand back the whole issue to the file of AO with a direction to re- examine the issue afresh.

8.

We after hearing the rival submissions of the parties and perused the material available on record find it necessary to remand back the issue to the file of AO after affording reasonable opportunity of being heard to the assessee in accordance with law. In terms of the above, the appeal of the assessee is allowed for statistical purposes.

9.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 27.02.2024 Sd/- Sd/-

(Dr. Manish Borad) (Sonjoy Sarma) Accountant Member Judicial Member Dated: 27.02.2024 Biswajit, Sr. PS

5 IT(SS)A Nos. 148/Kol/2023 AY: 2010-11 Bhaskar Tea And Industries Private Limited

Copy of the order forwarded to: 1. Appellant – Bhaskar Tea And Industries Private Limited, 6/2, Queens Park, Ballygung, Kolkata-700019. 2. Respondent – ACIT, Central Circle-1(1), Kolkata. 3. Ld. CIT 4. Ld. CIT(A) 5. Ld. DR

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