M/S. NEESA AGRITECH PVT.LTD.,AHMEDABAD vs. THE DCIT.,CENT.CIRCLE-2(2), AHMEDABAD

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ITSSA 18/AHD/2020Status: DisposedITAT Ahmedabad12 May 2023AY 2008-0919 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the assessee's appeal in IT(SS)A No. 17/Ahd/2020 for AY 2007-08. Regarding the addition of Rs. 6,18,921/- due to a negative cash balance, the Tribunal found that the assessee failed to provide plausible explanations or supporting evidence, and upheld the CIT(A)'s finding that the explanation of borrowings from NIL was unsubstantiated and potentially violative of Section 269SS and 269TT. Similarly, for the disallowance of Rs. 5,26,434/- under Section 40A(3) for cash wages, the Tribunal noted the assessee's inability to substantiate its claim that no single labourer received more than Rs. 20,000/-, and upheld the CIT(A)'s decision. The Tribunal dismissed the Revenue's appeals (IT(SS)A Nos. 14, 15 & 16/Ahd/2020) concerning the deemed dividend issue. It agreed with the CIT(A)'s decision to restore the issue to the Assessing Officer for adjudication in accordance with law, given that the legal proposition was pending before a larger bench of the Apex Court, thus finding no grievance for the Revenue. The Tribunal also dismissed the assessee's remaining appeals (IT(SS)A Nos. 18, 62 & 63/Ahd/2020) for AYs 2008-09 to 2010-11, following the same reasoning as for AY 2007-08, emphasizing the assessee's consistent non-compliance.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) heard seven appeals filed by Neesa Agritech Pvt. Ltd. (assessee) and the Joint Commissioner of Income-tax (Revenue) for Assessment Years (AYs) 2007-08 to 2011-12. These appeals arose from orders passed by the DCIT under Section 153C read with Section 153A and Section 143(3) of the Income-tax Act, 1961, and subsequent orders of the CIT(A). The assessee had undergone a survey action under Section 133A, while the Neesa Group faced a search action under Section 132. The assessee was noted to be non-compliant throughout the assessment and appellate proceedings. The Tribunal decided to proceed ex-parte due to the assessee's consistent non-appearance and non-cooperation.

What were the issues?

1. Whether the CIT(A) erred in upholding the addition of Rs. 6,18,921/- on account of a negative cash balance in the assessee's cash book, contrary to the assessee's explanation of short-term borrowings from a related concern (NIL) not being recorded. 2. Whether the CIT(A) erred in upholding the disallowance of Rs. 5,26,434/- under Section 40A(3) of the Act for cash payments of wages, where the assessee claimed no single labourer was paid more than Rs. 20,000/-, but failed to provide cogent documentary evidence. 3. Whether the CIT(A) erred in restoring the issue of deemed dividend under Section 2(22)(e) to the Assessing Officer for adjudication, considering the pendency of a larger bench decision by the Hon'ble Apex Court on the taxability of deemed dividend in the hands of registered or beneficial shareholders. Assessee's Contentions (as inferred from the CIT(A)'s order and the Tribunal's discussion): The assessee argued that the negative cash balance was due to unrecorded short-term borrowings from NIL, and that cash payments for wages did not exceed Rs. 20,000/- per labourer. Revenue's Contentions: The Revenue supported the disallowances made by the Assessing Officer and upheld by the CIT(A), particularly regarding the negative cash balance and cash payments for wages. The Revenue also appealed against the partial relief granted by the CIT(A) on the deemed dividend issue.

Which sections of the Income-tax Act were involved?

Section 153C,Section 153A,Section 143(3),Section 132,Section 133A,Section 142(2A),Section 2(22)(e),Section 40A(3),Section 269SS,Section 269TT

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

For Respondent: Shri Vijay Kumar Jaiswal, CIT-DR
Hearing: 28.02.2023Pronounced: 12.05.2023

आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : आदेश आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत 1. अपीलाथ� / The Appellant अपीलाथ� अपीलाथ� अपीलाथ� 2. ��यथ� / The Respondent. ��यथ� ��यथ� ��यथ� 3. संबंिधत आयकर आयकर आयु� आयु� / Concerned CIT संबंिधत संबंिधत संबंिधत आयकर आयकर आयु� आयु� 4. आयकर आयु� ( ) / The CIT(A)- आयकर आयकर आयकर आयु� आयु� आयु� अपील अपील अपील अपील 5. िवभागीय �ितिनिध , /DR,ITAT, Ahmedabad, िवभागीय िवभागीय िवभागीय �ितिनिध �ितिनिध �ितिनिध अिधकरण अिधकरण अिधकरण अिधकरण अपीलीय अपीलीय अपीलीय अपीलीय आयकर आयकर आयकर आयकर 6. गाड� फाईल फाईल /Guard file. गाड� गाड� गाड� फाईल फाईल आदेशानुसार/ BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार TRUE COPY सहायक पंजीकार पंजीकार (Asstt.Registrar) सहायक सहायक सहायक पंजीकार पंजीकार आयकर अपीलीय अपीलीय अिधकरण अिधकरण आयकर आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण ITAT, Ahmedabad

19 IT(SS)A No. 14-18, 62 & 63/Ahd/2020 Assessee : NeesaAgritech Pvt Ltd

1.

Date of dictation ……28.02.2023/05.05.2023…….. Date on which the typed draft is placed before the Dictating Member :..…01.03.2023/05.05.2023… 1. Other Member…11.05.2023…….………….. 2. Date on which the approved draft comes to the Sr.P.S./P.S……11.05.2023….……………. 3. Date on which the fair order is placed before the Dictating Member for pronouncement…12.05.2023. 4. Date on which the fair order comes back to the Sr.P.S./P.S……12.05.2023.….……… 5. Date on which the file goes to the Bench Clerk……12.05.2023.….…… 6. Date on which the file goes to the Head Clerk… 7. The date on which the file goes to the Assistant Registrar for signatureon the order………… 8. Date of Despatch of the Order………………

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