Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “A” BENCH KOLKATA
Before: SHRI SANJAY GARG & SHRI GIRISH AGRAWAL
O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A), Asansol vide Appeal No. 129/CIT(A)/ASL/ACIT/Wd-1(2)/Asl/16-17 dated 10.06.2019 passed against the assessment order by the ITO, Ward-1(2), Asansol u/s. 143(3)/147 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) dated 14.12.2018.
Shri R. N. Ram, AR appeared on behalf of the assessee. Shri Vijay Kumar, Addl., CIT, Sr. DR appeared on behalf of the revenue.
Grounds raised by the assessee are reproduced as under:
Bolkunda Pachwai (S) C S. Shop, AY: 2014-15 “1. That on the fact and circumstances of the case Ld. CIT(A)/NFAC/DELHI, erred in confirming the addition of Rs.9, 01,602/- made by Ld. A.O on account of refund of empty bottles from M/S. Asansol Bottling & Packaging Pvt. Ltd. and M/s. IFB Agro Industrial Limited which as per Ld. A.O was not disclosed and accordingly was reassessed u/s. 143(3)/147.
2. That on the fact and circumstances of the case Ld. CIT(A)/NFAC/DELHI erred in not appreciating the fact that a sum of Rs.5/- (five) per empty bottle is paid to the buyer after the said bottle is returned to the shop after consuming the liquor and those empty bottles were returned to Asansol Bottling & Packaging Pvt. Ltd. and M/s. IFB Agro Industrial Limited which were subsequently accounted as refund to the assessee.
3. That on the fact and circumstances of the case Ld. CIT(A) INFAC/DELHI erred in not appreciating the fact that there was no profit element involved in such transactions as Rs.5/- per bottle is paid to the buyer and subsequently Rs.5/- per bottle is refunded to the assessee making the profit element as zero.
4. That the appellant craves leave to alter amend or substitute any ground & grounds before or at the time of hearing of appeal.”
Brief facts of the case are that assessee is engaged in the business of retail sale of country spirit and foreign liquor. Original return of income was filed on 09.09.2014 reporting total income of Rs.4,21,467/- assessment of which was completed u/s. 143(3) of the Act. The case was selected for reassessment by issuing and serving the notice u/s. 148 of the Act on 21.03.2018. In response to the said notice, assessee furnished its return reporting the same income of Rs.4,21,467/-. In the course of reassessment proceedings, Ld. AO issued a show cause notice dated 22.11.2018 wherein it was observed as under:
It is observed that you have debited Rs.1,15,37,400/- on account of purchase of Country Spirit (C.S) from M/s. Asansol Bottling & Packaging Pvt. Ltd. and M/s. IFB Agro Industries Ltd. The purchase figure debited by you is inclusive of 7,22,830/- and Rs.4,68,440/- being empty bottle refund from Asansol Bottling Plant and IFB Agro industries Ltd. during the F.Y. 2013-14 (totalling Rs.11,91,270/-). The aforesaid amount of Rs.11,91,270/- in respect of empty bottle refund has not been credited in P/L A/c, and thus has not been disclosed as income from sales of empty bottled. In view of above facts, you are asked to show cause by 26.11.2018 as to why the aforesaid amount of Rs.11,91,270/- should not be treated as your undisclosed income and added to your income.
Bolkunda Pachwai (S) C S. Shop, AY: 2014-15 5. Assessee made its submissions and explained the facts of the case. Ld. AO inferred that a sum of Rs.1,14,432/- towards scheme cost/rebate and refund of empty bottles to the extent of Rs.2,89,668/- i.e. (Rs.4,04,100/- - Rs.1,14,432/-) has been credited as miscellaneous receipt in the P&L Account and the balance of refund of empty bottles amounting to Rs.9,01,602/- (i.e. Rs.11,91,270/- - Rs.2,89,668/-) has remained undisclosed and liable for addition to the total income. Accordingly, reassessment was completed by making an addition of Rs.9,01,602/- against sale of empty bottles. Aggrieved, assessee went in appeal before the Ld. CIT(A).
Ld. CIT(A) has reiterated the observations made by the Ld. AO and has concluded to dismiss the appeal by noting that he is not inclined to interfere with the findings of the AO in the reassessment proceeding for which no cogent and plausible reasoning has been given. Aggrieved, assessee is in appeal before the Tribunal.
Ld. Counsel for the assessee has placed on record a written submission along with paper book containing 26 pages. Ld. Counsel for the assessee submitted that it has received a credit of Rs.11,91,270/- on account of empty bottles from Asansol Bottling & IFB Agro. It has also received a discount of Rs.1,00,025/-. He further stated that considering the nature of business in which the assessee is engaged in, has to pay to the consumers of liquors, a sum of Rs.5/- per empty bottle as and when it is returned to the shop owner after consumption of the liquor from the said bottle. For this, he referred to the circular issued by the Excise Department, Govt. of West Bengal, copy of which is placed in the paper book at page 26. He thus, pointed out that on this account, assessee had to pay a sum of Rs.8,87,195/- for which the ledger account is placed on record. He thus submitted that there is a total credit of Rs.12,91,295/- (Rs.11,91,270/- + Bolkunda Pachwai (S) C S. Shop, AY: 2014-15 Rs.1,00,025/-) and after deduction of the payment of Rs.8,87,195/- towards empty bottle there still remains a difference of Rs.4,04,100/- which has been duly offered for taxation as miscellaneous receipt by way of a credit in the audited P&L Account placed at page 19 of the paper book. He also pointed out to the ledger account of miscellaneous receipt placed at page 1 of the paper book which is reproduced as under:
He thus, strongly submitted that there is no suppression on the part of the assessee in respect of amount received against empty bottles and any other miscellaneous receipts and, therefore, the reopening of the assessment and the action taken by the Ld. AO by making an addition deserves to be deleted.
Per contra, Ld. Sr. DR placed reliance on the order of the AO. 10. We have heard the rival submissions and perused the material available on record. It is an undisputed fact that assessee has duly reported the net amount as miscellaneous receipt in its P&L Account and offered the same for taxation in its return of income. It is also noted that the Excise Department of Govt. of West Bengal had issued an order dated 29.12.2008 vide no. 1142-EX wherein it is stated that “the refundable price of empty bottles in which country spirit of different Bolkunda Pachwai (S) C S. Shop, AY: 2014-15 quantities is supplied in capsule and labelled bottles shall be as follows throughout the State”:
Refundable Pride of one bottle containing 600 ml. (Rs.) 300 ml. (Rs.) 5.00 4.00
Evidently, ld. Counsel has demonstrated from the ledger account of miscellaneous receipt that there is no suppression of reporting of any income element on account of refund of empty bottles which formed the basis for the reassessment. Considering the facts on record, and the statutory requirement under the order of Excise Department, Govt. of West Bengal referred above, we hold that the addition made by the Ld. AO is to be deleted. Accordingly, ground taken by the assessee is allowed.
In the result, appeal of the assessee is allowed. Order is pronounced in the open court on 25th November, 2022 Sd/- Sd/- (Sanjay Garg) (Girish Agrawal) Judicial Member Accountant Member Dated: 25th November, 2022 JD, Sr. P.S. Copy to:
1. 1. The Appellant: 2. The Respondent:. 3. CIT(A), Asansol. 4. CIT, Asansol.
5. DR, ITAT, Kolkata Bench, Kolkata //True Copy// By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata Bolkunda Pachwai (S) C S. Shop, AY: 2014-15
Date of dictation- 24 /11/2022 2. Date on which the typed draft order is placed before the Dictating Member and Other member 25 /11/2022 3. Date on which the approved order comes to the Sr. P.S./P.S. - /11/2022 4. Date on which the file goes to the Bench Clerk /11/2022 5. Date on which the file goes to the O.S. ……………………………. 6. Date of Dispatch of the Order……………….…