SIGMA CHEMTRADE PRIVATE LIMITED,INDORE vs. ITO-5(1), INDORE, INDORE
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आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर
IN THE INCOME TAX APPELLATE TRIBUNAL
INDORE BENCH, INDORE
BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER
AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER
Assessment Year:2017-18
Sigma Chemtrade Private Ltd.,
170/22, R.N.T. Marg,
Film Colony,
Indore
बनाम/
Vs.
ITO-5(1)
Indore
(Assessee/Appellant)
(Revenue/Respondent)
PAN: AALCS0614E
Assessee by Shri Kailash Agrawal, AR
Revenue by Shri Ashish Porwal, Sr. DR
Date of Hearing
28.08.2025
Date of Pronouncement
29.08.2025
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first appeal dated 28.01.2025 passed by learned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-1, Gurugram
[“CIT(A)”] which in turn arises out of rectification-order dated 17.06.2023
passed by learned CPC, Bengaluru [“AO”] u/s 154 of Income-tax Act, 1961
[“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal.
2. Precisely stated the facts of case are such that the assessee-company filed its return of income of AY 2017-18 declaring a total income of Rs.
Sigma Chemtrade Private Ltd.
ITA No. 160/Ind/2025 – AY 2017-18
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1,29,02,563/-. The AO processed assessee’s return vide intimation dated
09.03.2018 u/s 143(1) accepting the returned income of Rs. 1,29,02,563/-.
However, subsequently, the AO made a series of rectifications through orders dated 05.09.2018, 06.06.2023, 17.06.2023 and 01.03.2024 and kept on enhancing taxable income of assessee from time to time. Although assessee filed requests to AO and other authorities of department but did not get relief. Ultimately, the assessee selected appellate route and filed appeal to CIT(A) against order dated 17.06.2023 by which the assessee’s income was enhanced to Rs.
2,65,57,660/- after making certain adjustments. The CIT(A) granted part-relief to assessee. Still aggrieved, the assessee has come in next appeal before us.
3. The grounds raised by assessee are as under:
“1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER (CPC) HAS ERRED IN PASSING THE ORDER
WITHOUT FOLLOWING THE PROCEDURE LAID DOWN U/S 154(3)/154(4).
2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED
CIT(A)
HAS ERRED
IN NOT ADJUDICATING
THE LEAGAL
GROUND RELATING TO PASSING OF ORDER U/S 154 WITHOUT ANY OPPORTUNITY BY BEING HEARD AND TREATING THE SAME AS GENERAL
IN NATURE.
3.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICEF (CPC) AS WELL AS LEARNED CIT(A) HAS ERRED
IN DISALLOWING/MAINTAINING
Rs.2,59,581
BEING
SUBSCRPTIONS AND FEES WITHOUT GOING INTO THE FACTS OF THE CASE.
4.ON THE FACTS AND IN THE CIRCUMSTANCESOF THE CASE THE LEARNED ASSESSING OFFICER (CPC) AS WELL AS LEARNED CIT(A) HAS ERRED IN MAKING/MAINTAINING THE DISALLOWANCE OF Rs.3,85,448
BEING EXPENDITURE U/S 43B, WHICH HAVE ALREADY DISALLOWED IN COMPUTATION OF TOTAL INCOME AND DISALLOWANCE HAS RESULTED IN DOUBLE ADDITION OF THE SAME.
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ITA No. 160/Ind/2025 – AY 2017-18
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5.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER (CPC) AS WELL AS LEARNED CIT(A) HAS ERRED IN MAKING/MAINTAINING THE DISALLOWANCE OF Rs.2,19,945
BEING AMOUNT OF BAD DEBTS CLAIMED IN THE RETURN, WHEN ALL THE DETAILS WERE PROVIDED.”
Ground No. 1 & 2:
4. These are legal grounds but Ld. AR for assessee submitted that the assessee would be satisfied if due relief is given in other grounds which are on merits. Considering this request of Ld. AR and in view of the fact that the assessee is getting relief in other grounds in subsequent discussions, these grounds are not being adjudicated.
Ground No. 3:
5. The issue involved in this ground is the disallowance of Rs. 2,59,581/- made by AO.
This disallowance has been picked by CPC on the basis of reporting made by auditors in Clause 21(a) with the caption “Member Fees”.
The assessee has filed details and documentary evidences of these expenses at Pages 187 to 197 of Paper-Book. On perusal of these documents in open court, we prima facie find that the expenses are in the nature of membership fee paid to various trade associations and subscriptions. There appears no element of charity or donation. The expenses appear to have been incurred for business purposes and allowable. Therefore, as per consensus reached by learned Representatives, we remand this issue back to the file of AO for a fresh adjudication after considering evidences of assessee. Needless to Sigma Chemtrade Private Ltd.
ITA No. 160/Ind/2025 – AY 2017-18
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mention that the AO shall give necessary opportunity to assessee and shall make a judicious adjudication taking into account evidences of assessee without being influenced by previous orders in any manner. Consequently, this ground is allowed for statistical purpose.
Ground No. 4:
6. The issue involved in this ground is the disallowance of Rs. 3,85,448/- made by AO pertaining to provision of leave encashment. The AO has made this disallowance u/s 43B. Ld. AR for assessee, however, filed “Computation of Total Income” at Page 17 of Paper-Book to demonstrate that the assessee has voluntarily made disallowance in the returned income of Rs.
1,29,02,563/- computed before filing return of income. The document referred by Ld. AR is scanned and re-produced below for an immediate reference:
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Sigma Chemtrade Private Ltd.
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7. From above document, it is very much apparent that the assessee has already made the requisite disallowance before filing return of income.
Therefore, the addition/disallowance of Rs. 3,85,448/- made by AO has resulted in double addition. In that view of matter, we direct the AO to delete the impugned addition. Consequently, this ground is allowed.
Ground No. 5:
8. The issue involved in this ground is the disallowance of Rs. 2,19,945/- made by AO on accounts of “bad debt”. This disallowance has been picked by CPC on the basis of information of “bad debts” filed by assessee in the return of income as under [Para 5.6.1 of CIT(A)’s order]:
39
Bad debts (specify PAN of the person it available, for whom bad debt for amount of Rs.1 lakh or more is claimed as amount) i
PAN
Amount ii
Others (more than Rs.1
lakh) where
PAN is not available
Ii
219945
iii
Other
(amounts less than Rs.1
lakh)
Iii
0
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iv
Total bad debt
(39i)
(All PAN)
+39ii+39iii iii
0
9. Ld. AR for assessee submitted that the assessee has, due to oversight, wrongly filled information of “bad debts” of Rs. 2,19,945/- against sub-item
(ii) of item 39 “Others (more than Rs. 1 lakh) where PAN is not available”.
However, the PAN data are available with assessee and therefore no disallowance is warranted. The assessee has filed a Sheet giving details of PAN data alongwith Ledger A/cs of concerned debtors at Pages 218-220 of Paper-Book. We re-produce below the details filed by assessee as under:
D
10. After deliberations on the issue and as per consensus reached by learned Representatives, we remand this issue also back to the file of AO for a fresh adjudication after considering evidences of assessee. Needless to mention that the AO shall give necessary opportunity to assessee and shall make a judicious adjudication taking into account evidences of assessee without being influenced by previous orders in any manner. Consequently, this ground is allowed for statistical purpose.
11. Resultantly, this appeal is allowed in terms mentioned above.
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ITA No. 160/Ind/2025 – AY 2017-18
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Order pronounced in open court on 29/08/2025 (PARESH M. JOSHI)
ACCOUNTANT MEMBER
Indore
िदनांक/Dated :
29.08.2025
Patel/Sr. PS
Copies to:
(1)
The appellant
(2)
The respondent
(3)
CIT
(4)
CIT(A)
(5)
Departmental Representative
(6)
Guard File
By order
UE COPY