M/S SOM DISTILLERIES PVT. LTD.,BHOPAL vs. THE ACIT 1(2), BHOPAL

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.

not press ground no. 2 regarding issuance of notice u/s 148 of the

Act. The same is, therefore, dismissed being not pressed.

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.”

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.

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.

in appeal before the Tribunal.

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.

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.

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/