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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy]
Date of concluding the hearing : March 26th, 2019 Date of pronouncing the order : April 3rd, 2019 O R D E R Per J. Sudhakar Reddy :- Both these appeals filed by the assessee are directed against the separate but identical orders of the Learned Commissioner of Income Tax (Appeals) - 14, Kolkata, (Id. CIT(A)) passed u/s. 250 of the Income Tax Act, 1961, (the 'Act'), dt. 24/09/2018, for the Assessment Year 2010-11.
As the issues arising in both these appeals are common, for the sake of convenience, they are heard together and disposed off by way of this common order.
The assessee is a dealer in sarees under the trade name of M/s. Shree Shyam Saree House. It filed its return of income on 25/09/2010, declaring total income at Rs.6,23,480/-. The Assessing Officer completed the assessment u/s 143(3) of the Act, on 15/03/2013 interalia disallowing 1.34% out of the total claim of 6.34% claimed by the assessee on sale of sarees, on the ground that discount/rebate is excessive. This 1.34% was applied on the quantum of discount claimed i.e., Rs.1,05,48,614/- and the disallowance was restricted to Rs. 1,41,351/. The assessee did not carry the matter in appeal initially.
Assessment Year: 2010-11 & Assessment Year: 2010-11 Jai Prakash Bansal Thereafter the Id. Pr. CIT passed an order u/s 263 of the Act on 02/03/2015. The Id. Pr. CIT set aside the assessment to the file of the Assessing Officer for proper calculation of disallowance under the head "rebate and discount". This order of the Id. Pr. CIT dt. 02/03/2015, was not challenged by the assessee. The Assessing Officer in his order passed u/s 263 r.w.s. 143(3) of the Act on 29/09/2015, disallowed 1.13 % of the rebate/discount on the ground that its is excessive and applied the same on the total sales instead of the amount of rebate. The disallowance was quantified at Rs.19,07,610/-. Aggrieved the assessee carried the matter in appeal. The Id. CIT(A) in an appeal against the original assessment order passed on 15/03/2013, dismissed the appeal on the ground of delay. He did not accept the application of the assessee for condonation of delay wherein it was pleaded that, the disallowance in the original assessment order was negligible and he was advised that the incidental expenditure, for an appeal filed would be more. He further submitted that only on receipt of an order u/s 263 of the Act revising the assessment order passed u/s 143(3) of the Act, the assessee felt the necessity to contest the adverse findings. 3.1. In his order against the second assessment order passed 143(3)/263 of the Act, on 29/09/2015. The Id. CIT dismissed this appeal on the ground that the appeal against the original assessment order was not filed in time and hence he dismissed the same as the issue had attained finality.
Aggrieved the assessee is appeal before me.
After hearing rival contentions, I am of the considered opinion that the Id. CIT(A) should not have dismissed both these appeals in the manner in which he did. At least in the appeal filed against the order u/s 143(3)/ 263 of the Act, he should have adjudicated the issue on merits.
On merits, we find that the Assessing Officer in his original assessment order passed u/s 143(3) fo the Act, at page under the head "rebate and discount" held as follows:-
Assessment Year: 2010-11 & Assessment Year: 2010-11 Jai Prakash Bansal
Asstt. Year Sale Rebate & Discount Percentage of rebate & discount allowed 2010-11 16,63,47,290/- 1,05,48,614/- 6.34% 2009-10 11,87,72,423/- 55,95,325/- 4.71% 2008-09 8,01,47,093/- 34,04,0897/- 4.24% 2007-08 5,06,63,759/- 20,63,468/- 4.07%
A perusal of these figures show that for the Assessment Year 2010-11, the turnover has gone up from Rs. 11.87 Lakhs/- to Rs. 16.63 Lakhs/-. The claim of the assessee is that to achieve this huge jump in the turnover, grant of rebates and discounts, of 6.34% was the reason.
7.1. The Assessing Officer has not doubted the grant of rebate and discounts in this case. In other words, the genuineness of the expenditure on rebate has not been doubted. Under these circumstances, making an adhoc disallowance that too without rejection of books of accounts and without bringing any evidence on record is bad in law. Hence, we delete the disallowance made by the Assessing Officer in this order u/s 143(3) r.w.s. 263 of the Act, which was confirmed by the Id. CIT(A). Hence this the appeals of the assessee is allowed.
The appeal of the assessee in Id. CIT(A) dismissing the appeal on delay, is dismissed.
In the result, is allowed.
Kolkata, the 3rd day of April, 2019.