ACIT (CENTRAL)-1, BHOPAL, BHOPAL vs. SOM DISTILLERIES AND BREWERIES LTD., BHOPAL

ITA 297/IND/2023Status: DisposedITAT Indore08 August 2024AY 2014-15Bench: SHRI VIJAY PAL RAO (Judicial Member), SHRI B.M. BIYANI (Accountant Member)33 pages
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What did the Tribunal hold?

The ITAT upheld the CIT(A)'s deletion of ad-hoc disallowances made by the AO on travelling and conveyance expenses, following its own earlier decision. For the disallowance under Section 40(a)(ia) due to a discrepancy in royalty payments, the ITAT remanded the issue to the AO for fresh adjudication after conducting necessary inquiries.

What were the facts?

The assessee company, engaged in the manufacture of beer and liquor, filed returns for AY 2013-14 and 2014-15. The Assessing Officer (AO) made additions for disallowance of expenses under Section 14A and Section 40(a)(ia). The Commissioner (Appeals) deleted some additions but upheld others. Both the assessee and revenue filed appeals before the ITAT.

What were the issues?

Whether ad-hoc disallowances of expenses are sustainable without proper investigation, and whether a disallowance under Section 40(a)(ia) is justified based solely on a discrepancy in figures without inquiry from the payee.

Which sections of the Income-tax Act were involved?

Section 14A,Section 40(a)(ia)

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Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI

For Appellant: Shri Sumit Nema, Sr. Adv, Shri Gagan Tiwari, Adv
For Respondent: Shri Ram Kumar Yadav, CIT DR
Hearing: 11.07.2024Pronounced: 08.08.2024

Per Bench:

The captioned two appeals filed by parties are as per following details:

Som Distilleries and Breweries Limited, Bhopal ITA Nos. 271/Ind/2023 (A.Y. 2013-14) & ITA No. 297/Ind/2023 (A.Y. 2014-15)

(a) ITA No. 271/Ind/2023 is an appeal by assessee against appeal-order

dated 05.06.2023 passed by Commissioner of Income-tax (Appeal)-3,

Bhopal [“CIT(A)”] which in turn arises out of assessment-order dated

28.03.

2016 passed by

The order continues below.

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