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Income Tax Appellate Tribunal, “B” BENCH, CHENNAI
Before: SHRI DUVVURU RL REDDY & SHRI S. JAYARAMAN
आदेश /O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The assessee filed this appeal against the order of Commissioner of Income Tax (Appeals)-15, Chennai in dated 30.06.2016 for assessment year 2003-04.
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In the assessment made for the assessment year 2003-04 u/s. 143(3) dated 29.02.2006, the AO has observed that the appellant has claimed provisions of Rs. 33,35,654/- in the computation of income. He has also observed that this amount is not reflecting in the P&L A/c. During the assessment proceedings, the assessee’s representative explained that the appellant has purchased carbon dioxide from M/s. MFL. There was a dispute about the quantity purchased by the assessee. M/s. MFL has asked Rs. 33,35,654/- more as purchase amount. However, the assessee has disputed this amount on the ground that it has received less quantity of carbon dioxide.
Accordingly, the assessee has not claimed this amount of Rs. 33,35,654/- in the P&L A/c. However, it has claimed this amount in the computation of income. The AO had arrived on the conclusion that the assessee is wrongly showing this amount as a liability and this liability arises from outside books.
He has also added this amount twice on the ground that the assessee has over stated the profits. The AO has also allowed 20% depreciation on lorries as against 40% claimed by the assessee. Aggrieved, the assessee filed an appeal before the CIT(A). In respect of the issue of provision for MFL against bill and addition of cash credit u/s. 68, the CIT(A) dealt as under:
“I have considered the assessment order, argument placed by the learned AR of the appellant and also perused Xerox copy of appellate order of assessment year 2002-03. I find that the learned AO has wrongly treated this amount as liability and added u/s. 68 of the IT Act. Hence the addition made u/s. 68 of the IT Act is hereby deleted. Same amount has been added by the learned AO as provision for MFL excess bill. I find that this issue has already been decided by learned CIT(A) in the case of the appellant for the assessment
:-3-: ITA No. 2839/Mds/2016 year 2002-03. After considering the Hon’ble SC judgement in the case of Kedarnath Jute Manufacturing Co. Vs. CIT 82 ITR 363, the learned CIT(A) has given a direction that these amounts are deductible from the profits of the company. Respectfully following the decision of Hon’ble Supreme Court and appellate order of CIT(A) for the assessment year 2002-03. In the case of the appellant, the issue is decided in favour of the appellant. The addition made by the learned AO on the same amount Rs. 33,35,654/- is deleted.”
Aggrieved, the Revenue filed an appeal before the ITAT. The ITAT in its order in dated 14.10.2010 disallowed the assessee’s claim at Rs. 33,35,654/- by reversing the order of the CIT(A) and restoring the order of the AO. In respect of the depreciation issue the ITAT restored the matter to the file of the AO. Consequently, the Assessing Officer passed an order u/s. 143(3) r.w.s. 254 dated 09.03.2011 in which the AO, inter alia, made additions towards cash credit u/s. 68 at Rs. 33,35,654/- and also the provision for MFL against bill Rs. 33,35,654/-. Aggrieved against the addition, u/s. 68, the assessee filed an appeal before the CIT(A) The CIT(A) dismissed the relevant grounds.
Aggrieved, the assessee filed this appeal pleading that the addition of Rs. 33,35,654/- made u/s. 68 in the original assessment order dated 29.02.2006 was deleted by the CIT(A) in dated 18.06.2008.
Since the department did not contest the said deletion in its appeal filed before the Hon’ble ITAT in the CIT(A) order on such :-4-: ITA No. 2839/Mds/2016 issue has become final. In this regard, the AR invited out attention to the Revenue’s relevant appeal grounds filed before the ITAT, which is extracted as under:
“1. The order of the learned CIT(A) is contrary to law and facts of the case. 2.1 The learned CIT(A) erred in deleting the addition of Rs. 33,35,654/- made by the AO towards provision for MFL excess bill, relying upon the learned CIT(A)-V order in the assessee’s own case in dated 25.012007 for the assessment year 2002-03. 2.2 It is submitted that the order relied upon by the learned CIT(A) has not become final and appeal has been preferred before the Hon’ble ITAT.” and submitted that inspite of such plea, the CIT(A) erred in confirming the disallowance of Rs. 33,35,654/- made by the AO u/s. 68. The Commissioner (Appeals) ought to have deleted the said addition made by the AO erroneously, while giving effect to the order of the ITAT. Per contra, the DR supported the order of the CIT(A) dated 30.06.2016.
We have considered the rival submissions. The issue is whether, the addition made u/s. 68 at Rs. 33,35,654/- towards cash credits in the order giving effect to the ITAT order i.e., in the order passed u/s. 143(3) r.w.s. 254 dated 09.03.2011 is correct or not. The assessee pleads that the Revenue did not file an appeal against the original assessment order on the ground of double addition or on the issue of the cash credit u/s. 68, before the ITAT in supra, and hence the decision of the CIT(A) on this :-5-: ITA No. 2839/Mds/2016 issue has become final. In such facts, the AO cannot make the impugned addition in the consequential order dated 09.03.2011. In support of this contention, the assessee is relying on the ground of appeal
filed by the Revenue before the ITAT extracted, supra, in para
4. However, while disposing the matter, the CIT(A) in her order dated 30.06.2016 held as under:
“5.2.1 The appellant has submitted that addition of Rs. 33,35,654/- u/s. 68 of the IT Act is deleted by the CIT(A)-IX, Chennai vide dated 18.06.2008 and the department has not gone in appeal to ITAT on this issue. However, a careful perusal of the grounds of appeal raised by the revenue shows that both the additions are contested together as it is clearly mentioned that “when the AO has choosen to add this amount twice on the basis of holding that the amount was claimed in the computation of income rendered for taxation and not forming part of the published financial statement, namely, Schedule VI of the Companies Act, 1956”. Therefore, it cannot be said that the department has not contested this addition. The AO has rightly added Rs. 33,35,654/- u/s. 68 of the IT Act also as the Hon’ble ITAT has restored the order of AO. These grounds of appeal are dismissed.”
6. From the above, it appears that the CIT(A) has not properly appreciated the issue raised by the assessee. In the facts and circumstances, we deem it fit to restore the matter to the file of the CIT(A) for proper appreciation and for passing a speaking order, after affording due opportunity to the assessee. In the facts and circumstances, the assessee’s appeal is treated as allowed for statistical purposes.
In the result, the assessee’s appeal is treated as allowed for statistical purposes.
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Order pronounced on Wednesday, the 27th day of December, 2017 at Chennai.