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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
आदेश / O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 06.02.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 16.12.2019 passed by learned ACIT- 3(1), Circle, Bhopal [“AO”] u/s 143(3) r.w.s. 263 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2014-15, the assessee has filed this appeal.
Ms.Rama Garg, Sehore vs. ACIT,3(1), Bhopal AY 2014-15 2. The background facts leading to present appeal are such that the assessee-individual is engaged in the business of dealings in grains, oil, seeds and pulses as trader and general commission agent in proprietorship concern M/s Gayatri Traders. The assessee filed return of AY 2014-15 declaring a total income of Rs. 11,70,630/-. Case of assessee was subjected to scrutiny assessment and the AO completed assessment u/s 143(3) vide order dated 18.11.2016 determining total income at Rs. 21,50,320/-.
Thereafter the PCIT, Bhopal passed revision-order dated 18.02.2018 u/s 263 directing the AO to make a de novo assessment. Pursuant to revision- order, the AO passed a new assessment-order dated 16.12.2019 u/s 143(3) r.w.s. 263 after making a disallowance of Rs. 84,74,465/- out of total claim of Rs. 94,38,037/- made by assessee in P&L A/c consisting of (i) Rs. 38,68,889/- on account of ‘Claim and Discount’, (ii) Rs. 10,21,304/- on account of ‘Rebate and Shortage’ and (iii) Rs. 45,47,844/- on account of ‘Rebate and Discount’. The AO accepted part-claim of Rs. 9,63,572/- out of total claim of Rs. 94,38,037/- and disallowed remaining claim of Rs. 84,74,465/- for want of evidences. Aggrieved, the assessee carried matter in first-appeal but did not get any success. Still aggrieved, the assessee has come in next appeal before us.
Ld. AR for assessee submitted that the AO has made 100% disallowance in current year whereas in the case of this very assessee, the ITAT, Indore has upheld only 10% disallowance out of 100% disallowance made in earlier AY 2012-13, in following para 26-27 of the Order dated
Ms.Rama Garg, Sehore vs. ACIT,3(1), Bhopal AY 2014-15 05.02.2019 in & 1321/Ind/2016, copy of order is filed in Paper-Book and the paras referred by Ld. AR are re-produced below:
“26. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. Ld. CIT(A) has decided this issue in para No.14 which is reproduced as under :- “14. Grounds of appeal
10 The ground is against the AO making addition of Rs. 45,34,783/- on account of claim of expenses of Rs. 36,33,747/- and shortage claim of Rs. 9,01,036/- disallowed to the extent of 100%. 14.1 The AO made the above addition as the appellant failed to produce satisfactory bills/vouchers or any other evidence etc. in support of above expenditure. 14.2 The assessment for the immediately succeeding assessment year 2013-14 has been also completed u/s 143 wherein on identical facts and circumstances, a lump sum disallowance @ 10% of expenditure claimed under the heads Machinery Expenses, Bardana Expenses, Wages, Shortage and Claims, Diesel Expenses and Labour charges was made by the AO. In view of the above the disallowance is restricted to 10% of Rs. 45,34,783 i.e., Rs. 453478. An addition of Rs. 4,53,478/- is upheld. The assessee gets relief of Rs. 40,81,305/-. The ground of appeal is partly allowed.”
27. Undisputedly, the revenue has been allowing such claim in part. No new fact or basis is brought to our notice. Moreover, looking to the nature of business, we do not see any infirmity into the order of the Ld. CIT(A) and the same is hereby affirmed. Ground raised by the revenue is dismissed.”
4. Therefore, according to Ld. AR, in present AY 2014-15 also, it would be fair to restrict disallowance to 10% and delete excessive disallowance.
Ld. DR, on the other hand, supported the orders of lower-authorities and left the matter to the wisdom of bench.
Ms.Rama Garg, Sehore vs. ACIT,3(1), Bhopal AY 2014-15 6. We have considered rival submissions of both sides and also perused the case-record including the orders of lower-authorities and the documents filed in Paper-Book. At first, we refer following para of impugned order passed by CIT(A):
“Consequently to the filing of appeal by the appellant this office has issued five notices on 12.03.2020, 25.02.2021, 04.11.2022, 26.12.2023 and 08.01.2024 giving the opportunities to the appellant to upload a submission and substantiation against the ground raised in the appeal. Whereas it is observed that for none of the opportunities given the appellant has responded either by filing the reply or seeking adjournment of his case. Therefore, it is deemed that the appellant does not want to pursue the appeal by filing the submissions. Under the circumstances, based on the material available in the system the pending appeal is decided against the grounds raised are adjudicated as under.” Thus, the CIT(A) has passed an ex-parte order due to non-representation by assessee. In subsequent paras of his order, which are not re-produced, the CIT(A) has upheld the AO’s order.
Now, we refer the operative para of AO’s order wherein the impugned disallowance was made:
“5. On perusal of the above submission, it is crystal clear that the assessee had debited expenses without any supporting documents i.e. bills and vouchers. It is pertinent to mention here that in this particular case for the assessment year 2012-13, on the same grounds of appeal
, the Hon'ble ITAT vide order dated 05.02.2019 has clearly allowed the appeal of the Department. The relevant portion of the same is as under : “13. Ground No. 3. is against deleting the addition made on account of discount expenses of Rs. 8,59,589/-.
14. Ld. Departmental Representative supported the assessment order and relied upon the findings given by the AO.
15. On the contrary, Ld. Counsel for the assessee submitted that the authorities below were not justified in making the addition.
Ms.Rama Garg, Sehore vs. ACIT,3(1), Bhopal AY 2014-15
We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The Ld. CIT(A) decided the issue in para 11.2 of his order by holding as under :- “11.2 Discount of Rs. 10,74,486/- has been claimed during the year as against Rs. 6,73,327/- claimed in the succeeding assessment year 2013-14. Both the purchases and the sales are higher in A.Y. 2013-14 (as mentioned in para 7.2 above) and yet less discount has been paid. No bills/vouchers has been produced during assessment proceedings or the remand proceedings. During appeal proceedings no details have been filed of discount given. In the absence of any details, the disallowance of expenditure is sustained to the extent of 20% of the same. An addition of Rs. 2,14,897/- is upheld. Addition of Rs. 8,59,589/- is deleted. The ground of appeal
is partly allowed.”
17. We find that the AO had disallowed these expenses on the basis that no evidences have been furnished. It was incumbent upon the assessee to furnish supporting evidences of any expenditure related to the business as incurred by her. No such evidence was furnished, even the Ld. CIT(A) concurred to this fact. Therefore, the finding of the Ld. CIT(A) cannot be sustained hence, we reverse the finding of the Ld. CIT(A) and restore that of the AO on this issue. This ground of the revenue’s appeal is allowed.” In view of the above discussion, the submission of the assessee is not justifiable and accordingly expenses claimed for rebate and shortage, claim and discount and rebate and discount are bogus as no supporting bills and vouchers are furnished during assessment proceedings. Therefore, as discussed above, amount of Rs. 84,74,465/- as per show cause notice is without any supporting documents and accordingly, disallowed and added back to the total income of the assessee. Addition Rs. 84,74,465/-.”
8. Thus, it can be observed that while the AO has followed Para 13-17 of ITAT’s order in making 100% disallowance, Ld. AR is relying upon Para 26- 27 of the very same order of ITAT for restricting disallowance to the extent of 10%. On a careful consideration, we find that the Para 13-17 of ITAT’s order dealt the issue of ‘discount expenses’, Para 26-27 dealt the issue of ‘expenses and shortage claim’. The controversy in present appeal before us is regarding ‘Claim and Discount’, ‘Rebate and Shortage’ and ‘Rebate and Discount’. Therefore, in absence of any detailed adjudication by CIT(A), we
Ms.Rama Garg, Sehore vs. ACIT,3(1), Bhopal AY 2014-15 are unable to arrive at a conclusive view as to which Para of ITAT’s order i.e. Para 13-17 or 26-27 shall apply to the facts of assessee’s present case. Since the CIT(A) has passed an ex-parte order, we are inclined to restore this matter to CIT(A) for passing order afresh after examining the facts/issue of assessee and considering the order of ITAT for AY 2012-13. Needless to mention that the assessee shall make adequate representation before CIT(A) as and when the hearings are fixed failing which the CIT(A) shall be at liberty to pass order in accordance with law.
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 02.07.2024