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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI C.M. GARG & SHRI O.P. MEENA
आदेश /O R D E R
PER SHRI C.M. GARG, JM
This appeal has been filed by the assessee against the order of
the learned CIT(A)-31, New Delhi, Camp Bhopal, having concurrent
M/s Som Distilleries Pvt. Ltd ITA No. 902/Ind/2016 jurisdiction over the CIT(A), Bhopal, dated 13.5.2016 in First Appeal
No. 598/11-12 for the assessment year 2006-07.
At the time of hearing, the learned counsel for the assessee did
not press ground no. 2 regarding issuance of notice u/s 148 of the
Act. The same is, therefore, dismissed being not pressed.
The sole effective ground raised by the assessee–appellant
reads as follows :-
“That, on the facts and in the circumstances of the case and in
law, it be held that the assessee did not incur any unexplained
expenditure amounting to Rs.1368780/-, hence the addition u/s
69C on the basis of assumptions and presumptions is wholly
unlawful and unjustified, therefore, be deleted.”
Briefly stated, the facts of the case are that the assessee is a
private limited company engaged in the business of manufacturing
of spirit, country liquor and IMFL. The assessee filed the return of
income on 28.11.2006 declaring total loss of Rs.(-) 1,21,48,516/-. A
notice u/s 148 of the Act was issued in response to which the
assessee stated that the original return filed may be treated as
return filed in response to notice u/s 148 of the Act.
M/s Som Distilleries Pvt. Ltd ITA No. 902/Ind/2016 4. During the course of assessment proceedings the Assessing
Officer found that the assessee company purchased coal from Shree
Coal India Pvt. Ltd. of Rs.13.68 lacs and made payments in cash in
violation of section 40A(3) of the Income Tax Act. From the Ledger
account in the books of Shree Coal India Pvt. Ltd. the Assessing
Officer found that the during the period from 1.4.2005 to 31.3.2006
the assessee company has made cash payments of Rs.13,68,780/-
to this company. The Assessing Officer, therefore, required the
assessee to produce the books of accounts along with audit report
of the concerned period as also to show as to why the total amount
of Rs. 13,68,780/-made in cash for purchase of coal should not be
added to the total income as per provisions of section 69C of the Act
as unexplained expenditure. In response, the assessee submitted
that it has never made any cash payment to Shree Coal India Pvt.
Ltd. However, no books of accounts or audit report were produced.
The Assessing Officer afforded a number of opportunities to the
Assessing Officer but the assessee failed to do so. The Assessing
Officer also summoned Shree Coal India Pvt. Ltd. Company to
produce its books of accounts but no compliance was made. The
Assessing Officer, therefore, inferred that the non-compliance of the 3
M/s Som Distilleries Pvt. Ltd ITA No. 902/Ind/2016 assessee shows that the assessee did not have any evidence in
support of its claim of cash payment. The Assessing Officer,
therefore, disallowed the claim of the assessee and added back the
total amount of Rs. 13,68,780/- to the total income of the assessee
u/s 69C of the Act.
Felt aggrieved, the assessee preferred first appeal before the
learned CIT(A). On consideration of facts of the case in the light of
the submissions of the assessee, the learned CIT(A) observed that
“Only when initially the appellant rebuts the allegatgion, the onus
shifts to the A.O. but if the appellant in the beginning itself does not
controvert the finding with necessary documentary evidence viz.
books of accounts etc. in this case, it can be said that he has failed to
discharge his onus”. In this view of the matter, the learned CIT(A)
confirmed the addition made by the Assessing Officer.
Against the above order of the learned CIT(A), the assessee is
in appeal before the Tribunal.
We have heard the arguments of both the sides and
carefully perused the relevant material placed on record of the
Tribunal and the orders of the authorities below. 4
M/s Som Distilleries Pvt. Ltd ITA No. 902/Ind/2016 8. The learned counsel for the assessee drew our attention
towards reasons for issuance of notice u/s 148 of the Act placed at
page 4 of the assessee’s paper book and submitted that the main
grievance of the Assessing Officer for initiation of reassessment
proceedings was that the assessee company has purchased coal
from Shree Coal India Pvt. Ltd. of Rs. 13.68 lacs and made
payments in cash in violation of section 40A(3) of the Act. Further,
the learned counsel for the assessee took us through the last para
of the assessment order and submitted that the Assessing Officer
has made the disallowance of entire cash payment by invoking the
provisions of section 69C of the Act as unexplained expenditure and
the same was added to the total income of the assessee. The learned
counsel for the assessee also submitted that the authorities below
wrongly noted that the books of accounts were not shown to them
whereas the factual position is that the assessee vide reply dated
14.12.2011 submitted all the relevant audited books of accounts for
the period from 1.4.2005 to 31.3.2006 including the copy of ledger
account of Shree Coal India Pvt. Ltd. Therefore, it is clear that the
authorities below have ignored the books of accounts and other
relevant material including the explanation of the assessee 5
M/s Som Distilleries Pvt. Ltd ITA No. 902/Ind/2016 pertaining to this expenditure and wrongly inferred that the
assessee has not submitted the books of accounts and other
relevant material. We may point out that during the course of
arguments, the learned DR submitted that if it is found just, proper
and necessary, then the Department has no objection if the issue is
restored to the file of the learned CIT(A) or the Assessing Officer for
fresh adjudication after considering the entire assessment record
and documents supporting the claim of the assessee.
On careful consideration of the above submissions in view of
the submissions and the documents placed by the assessee before
the authorities below, it cannot be inferred that the assessee has
not placed any books of accounts or other material before the
Assessing Officer during the assessment proceedings. However,
the addition has been made by alleging that the assessee could not
explain the cause of cash payments and books of accounts and
audited report was not produced even after giving several
opportunities. We are, therefore, of the opinion that the issue
requires a fresh adjudication at the end of the Assessing Officer.
Thus, the case is restored to the file of the Assessing Officer for
M/s Som Distilleries Pvt. Ltd ITA No. 902/Ind/2016 fresh adjudication of the issue after affording due opportunity of
hearing to the assessee. We also direct the Assessing Officer that he
will decide the issue afresh without being prejudiced from the
earlier assessment order and the first appellate order. Accordingly,
the sole ground of the assessee is restored to the file of the
Assessing Officer and the same is allowed in the manner as
indicated above.
In the result, the appeal is allowed for statistical
purposes.
The order has been pronounced in open Court on 28th
February, 2017.
Sd/- sd/-
लेखा सद�य �या�यक सद�य (O.P.Meena) (C.M. Garg) Accountant Member Judicial Member
February 28th , 2017. Dn/