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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आयकर अपीलीय अिधकरण, ‘सी’ �यायपीठ, चे�ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी एन.आर.एस. गणेशन, �याियक सद�य एवं �ी ए. मोहन अलंकामणी, लेखा सद�य के सम� BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. : 2533/Mds/2016 िनधा�रण वष� / Assessment Year :2012-13 The Asstt. Commissioner of Income M/s. V.R. Textiles Pvt. Ltd. Tax, v. (Erstwhile Diya Industries Pvt. Circle-1, No.15, Gandhiji Road, Ltd.), 386, Sathy Main Road, Erode-638 001. Punjai Puliampetti, Erode-638 459. PAN: AABCD6800H (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/Appellant by : Shri A.V. Sreekanth, JCIT ��यथ� क� ओर से/Respondent by : None सुनवाई क� तारीख/Date of Hearing : 02.05.2017 घोषणा क� तारीख/Date of Pronouncement : 31.05.2017 आदेश /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-3, Coimbatore dated 27.05.2016 and pertains to the assessment year 2012-13. Notice of hearing was served on the assessee through Department. Even after receipt of notice of hearing from the Tribunal, the assessee failed to appear before this Tribunal when the appeal was taken up for hearing. Therefore, we heard the Ld. Departmental Representative and proceeded to dispose off the appeal on merit.
Shri A.V. Sreekanth, the Ld. Departmental Representative submitted that the only issue arises for consideration is addition of credit balance of Rs.34,03,198/-. According to the Ld.DR, there was a credit balance of Rs.34,03,198/- outstanding in the accounts. The AO called for the confirmation letter from the creditors and also account copy of the creditors. The assessee has not filed any confirmation. The credit balance outstanding in the account was found to be not proved. Therefore the AO made addition. However, the CIT(Appeals) found that the entire balance is opening balance. Therefore it cannot be added for the financial year relevant to the assessment year under consideration.
According to the Ld.DR, whether it is an opening balance or closing balance, the assessee has to establish that there was a closing balance for the earlier assessment year which continues to be the opening balance for the year under consideration. Since, no-one examined the closing balance of the earlier year, according to the Ld.DR, the CIT(Appeals) is not justified in allowing the claim of the assessee.
We have considered the submission of the Ld.DR and also perused the material available on record. The assessee claims that there was a opening balance of Rs.34,03,198/-. Therefore the same cannot be added for the year under consideration. When the assessee claims that there was an opening balance for the year under consideration, this Tribunal is of the considered opinion that the same needs to be substantiated by producing books of accounts. Unfortunately, the assessee did not furnish any books of accounts before both the authorities below. Therefore, the CIT(Appeals) is not justified in deleting the addition on the presumption that opening balance cannot be added for the year under consideration. This Tribunal is of the considered opinion that even though the assessee claims that it has opening balance, the same needs to be substantiated by producing the material. In the absence of any material before the Tribunal, the same needs to be reconsidered by the AO. Accordingly, the orders of both the authorities are set aside and the addition of credit balance of Rs.34,03,198/- is remitted back to the file of the AO. The AO shall re-examine the matter afresh in the light of material that may be filed by the assessee and thereafter decide the same in accordance with law after giving reasonable opportunity to the assessee.
The next ground of appeal is with regard to disallowance of pooja expenses. Shri A.V. Sreekanth, the Ld. Departmental Representative submitted that under the head ‘pooja expenses’, the assessee has made certain donation to the temples. The assessee claimed before the AO that certain special pooja was performed inside the premises of the company. Moreover donations were also made to temples and annadanam scheme.
The AO disallowed the expenses related to donation to the extent of Rs.8 lakhs. However on appeal by the assessee, the CIT(Appeals) placing reliance on the judgment of the Punjab & Haryana High Court in 134 ITR 458 restricted the disallowance to Rs.3 lakhs. Since the details of donation made by the assessee and the pooja expenditure, donation given to annadanam scheme was not available on record, this Tribunal is of the considered opinion that CIT(Appeals) has rightly restricted the claim of pooja expenses to Rs.3 lakhs. This Tribunal do not find any reason to interfere with the order of the lower authority. Accordingly the same is confirmed.
In the result, the appeal by the Revenue is partly allowed for statistical purpose.
Order pronounced on 31st May, 2017 at Chennai.