ITO, WARD- 5, PANIPAT vs. VARDHMAN TRADING COMP. PVT. LTD., PANIPAT

PAN No. AAACV 2638 J (APPELLANT) (RESPONDENT) Assessee by Shri Govind Singhal, Sr. DR Revenue by --None-- Date of hearing: 18/02/2021 Date of Pronouncement: 18/02/2021 ORDER

PER ANIL CHATURVEDI, AM:

2. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 27.26/- lacs on account of unsecured loans by completely overlooking the facts that the assessee had failed to establish the capacity of the creditors to advance the money under consideration.

3. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 1,27,448/- by completely overlooking the fact that there was an apparent abnormal increase in Diesel expenses in the post survey period which the assessee had failed to substantiate.

4. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 10,68,200/- on account of carriage inward by taking these expenses as diesel expenses and by completely overlooking the facts that there was substantial increase in the expenditure on the given head in the post survey period and the assessee had failed to support the same with original vouchers.

5. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 3,15,946/- on account of Wages Expenses by once again taking the same as diesel expenses and by completely overlooking the fact that there was an increase of 294% in the Wages Expenses in the post survey period and the assessee had not been able to produce any supporting document to prove the genuineness of the said expenses.

6. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 8 lacs on account of in salary expenses by taking the said expenses as diesel expenses, and by completely overlooking the fact that there was a disproportionate increase in the salary expenses in the post ITO vs. Vardhman Trading Comp. Pvt. Ltd. A.Y. 2009-10 3 survey period and that the assessee had completely failed to prove the genuineness of the said expenses.

7. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 5 lacs on account of disproportionate increase in the rent expenses in the post survey period, the genuineness of which was not established by the assessee.

8. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 3,81,097/- on account of disproportionate increase in repair & maintenance charges in the post survey period, by treating the same as diesel expenses and by overlooking the fact that the assessee had failed to furnish any documentary evidence in support of the said expenses.

9. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 3,69,220/- on account of entertainment expenses by treating the same as diesel expenses and by overlooking the fact that there was a substantial increase in the said expenses in the post survey period and the expenses were not fully substantiated by supporting evidence by the assessee.

10. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 49,02,174/- on account of bogus expenses under the head rebate & discount by treating the same as diesel expenses, and by completely overlooking the fact that the assessee had booked heavy expenses of Rs. 49,02,174/- under the head rebate and discount in the post survey period without furnishing any supporting evidence or justification for the same.

11. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 3 lacs on account of Tour and Travelling expenses by treating the same as diesel expenses, and by overlooking the fact that there was a disproportionate increase in the post survey period and the assessee had failed to produce any supporting evidence for the same.

ITO vs. Vardhman Trading Comp. Pvt. Ltd. A.Y. 2009-10 4 12. Whether on the facts and in law, the CIT(A) has erred in deleting the addition of Rs. 3,98,268/- on account of disallowance of interest u/s 36(l)(iii) of the Act by completely overlooking the fact that the assessee had itself agreed to the said addition during the course of assessment proceedings as mentioned in para 16 of the assessment order, and that the interest-free-advances were given by the assessee to its Directors.

3. On the date of hearing none appeared on behalf of the assessee and the notice that was sent for hearing was returned undelivered. On perusing the grounds, we enquired from Learned DR as to whether the tax effect involved in the present appeal is less than Rs.50 lakhs. Learned DR fairly admitted that the tax effect in the present appeal is less than 50 lakhs.

ITO vs. Vardhman Trading Comp. Pvt. Ltd. A.Y. 2009-10 5 before the Income Tax Appellate Tribunal unless the tax effect, excluding interest, exceeds Rs.50 lakhs. We find that in the present case, the tax effect involved is less than Rs.50 lakhs. In the absence of any material placed on record by the Revenue to demonstrate that the issue in the present appeal is covered by exceptions provided in para 10 of the aforesaid CBDT Circular of 11.07.2018, we are of the view that the monetary limit prescribed by the instructions of the CDBT Circular dated 08.08.2019 would be applicable to the present appeal of the Department. We therefore hold the present appeal of Revenue to be not maintainable on account of low tax effect. However, in case there is any error in the computation of the tax effect involved or if for any reason, the aforesaid CBDT Circular is not applicable, it would be open to the Revenue to seek revival of the appeal. Thus the appeal of the Revenue is dismissed.