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Income Tax Appellate Tribunal, KOLKATA BENCH ‘C’, KOLKATA
Before: Shri P. M. Jagtap, A.M. & Shri S.S.Viswanethra Ravi, J.M.)
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘C’, KOLKATA (Before Shri P. M. Jagtap, A.M. & Shri S.S.Viswanethra Ravi, J.M.)
ITA No. 186/Kol/2013 : Asstt. Year : 2009-2010
Evergreen Drums & Cons Pvt. Ltd. Vs DCIT, Circle-1, PAN: AAACE 5344E Kolkata (APPELLANT) (RESPONDENT)
Appellant by : Shri D.Niyogy, FCA Respondent by : Shri D. Lahiri, JCIT, Sr.DR
Date of Hearing : 29.01.2016 Date of Pronouncement : 26-04-2016
ORDER Per Shri S.S.Viswanethra Ravi, J.M. This is an appeal filed by the assessee against the order dated 31.12.2012 passed by the CIT(A)-XXIV, Kolkata for the assessment year 2009-10 passed under section 143(3) of the I.T.Act.
The assessee raised the following grounds: “1.a) That on the facts and on the circumstances of the case the Ld. Commissioner of Income Tax (Appeal) was not justified in reducing the disallowance under the head Miscellaneous Expenses to Rs.1,00,000/= from Rs.4,46,975/=. (b) That the Appellant submits that there should not be any disallowance under the head Miscellaneous Expenses as the entire expenditure under this head were incurred for wholly and exclusively for the purpose of Business. 2.a) That on the facts and in the circumstances of the case the Ld. Commissioner of Income Tax (Appeal) was not justified in confirming the rejection of Appellant's claim for deduction U/s. 801B of the Income Tax act. (b) That the Appellant submits that the Assessee was prevented by sufficient causes for the alleged non compliance and as such from the point of equity
2 ITA No.186/Kol/2013 Evergreen Drums & Cons Pvt. Ltd. Assessment Year: 2009-10 and justice further opportunity should be given to tne Assessee submitting the Form No. 10CCB in support of its claim U/S. 80lB of the Income Tax Act.
That the appellant crave reserve its-Self to add, amend or alter any Grounds of Appeal or the whole of it at the time of this Appeal hearing.”
The brief facts of the case are that the assessee is a company engaged in the business of manufacturing drums and cans. The return of income was filed disclosing the total income of Rs.79,73,658/-. Notices under section 143(2) and 142(1) of the Act issued and in response to such notices, the A.R. filed various relevant documents before the AO.
During the assessment proceedings, the AO found that the assessee incurred a sum of Rs.4,46,975/- for factory miscellaneous expenses and for not filing supporting documents nor any explanation, added back to the total income of the assessee.
In appeal before the CIT(A), the assessee contended that the details of miscellaneous expenses were furnished to the AO, but, however, the AO did not properly examine the details during the course of assessment proceedings, nor ask for any specific details regarding the factory miscellaneous expenses. The CIT(A) restricted the disallowance on miscellaneous expenses upto Rs.1,00,000/- against the claim of Rs.4,46,975/-.
In second appeal before this Tribunal, ld. Counsel for the assessee contended that the details of factory miscellaneous expenses were submitted before the CIT(A), having examining and verifying the same restricted the same upto Rs.1,00,000/- on the basis of estimation and it is not permissible as per law. Further he drew our attention to the ‘annexure-C’ placed in paper book and ld. D.R. relied on AO’s order.
3 ITA No.186/Kol/2013 Evergreen Drums & Cons Pvt. Ltd. Assessment Year: 2009-10 7. Heard both the parties and perused the materials available on record. The contention of the assessee is that all the details were submitted before the AO, but did not consider the same on the ground that there was no break-up of factory expenses as it was produced under the head of miscellaneous where, the assessee has shown the factory miscellaneous expenses under the ‘sub-head’. The break-up of said expenses were produced before the CIT(A) as seen in Annexure-C. We find that the assessee incurred the said expenses for packing finished goods with Bopp Tape material at three different locations at Kolkata, Chittoor and Pondicherry to an amount of Rs.4,46,975/-. The said statement containing factory miscellaneous expenses was before the ld. CIT(A) and having examining the same, he restricted the factory miscellaneous expenses upto Rs.1,00,000/- on the basis of estimation. It is observed that the CIT(A) did not give reasons as to why and what basis estimation was applied having examining the statement of expenses. In the absence of such reasons and taking into consideration the statement of factory miscellaneous expenses as in annexure –C, we are of the view that the order of CIT(A) is not justified in restricting the disallowance upto rs.1,00,000/-. The claim of Rs.4,36,975/- as it was shown in annexure – ‘C’ incurred for the packing of finished goods and we treat it has been incurred for the purpose of business activity and it is an allowable expenditure. Therefore, ground no.1 involving Rs.1,00,000/- is allowed.
Ground no.2 relates to a deduction of Rs.3,64,920/- under section 80IB of the Act. The AO disallowed the said amount for non-submission of form 10CCB. Before the CIT(A), it was submitted that the form 10CCB was certified by the assessee’s auditor, but for the sudden demise of said auditor in June 2010 and due to closure of his firm of M/s. T. Dasgupta & Co thereafter, the assessee could not submit the same before the AO. The CIT(A) confirmed the disallowance of Rs.3,64,920/- made by the AO under section 80IB of the Act.
4 ITA No.186/Kol/2013 Evergreen Drums & Cons Pvt. Ltd. Assessment Year: 2009-10 9. Before us, the assessee reiterated the submission made before the CIT(A). The ld. D.R. submitted that the assessee failed to file audit report as formulated under form no.10CCB before the AO, as well as before the ld. CIT(A) and it is mandated in order to claim deduction. Relied on the orders of both the authorities below.
Heard submissions of both sides and perused the material available on record. We find that the assessee filed an audit report certified by the Auditor as per form no.10CCB with a covering letter dated 11.01.2006 as it is placed as in paper book along with balance-sheet, profit and loss account and computation of income before this Tribunal. Since it is mandatory to claim deduction as submitted by the Ld.DR In such circumstances, we have no other alternative except to remand back ground no.2 for fresh consideration of AO. Accordingly, we remit the file specifically on ground no.2 to AO and he is directed to afford an opportunity to AO to file any material evidence in support of its case in respect of ground no.2 to decide the issue as per law. The assessee is also directed not to seek any further adjournments before the AO. Thus, ground no.2 is allowed for statistical purposes.
In the result, the appeal filed by the Assessee is partly allowed for statistical purposes, as indicated above.
Order Pronounced in the Open Court on 26th April, 2016.
Sd/- Sd/- (P.M.Jagtap) (S.S.Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 26/04/2016 Talukdar/Sr.PS
5 ITA No.186/Kol/2013 Evergreen Drums & Cons Pvt. Ltd. Assessment Year: 2009-10
Copy of order forwarded to:
1 Evergreen Drums & Cons Pvt. Ltd., 29, Janaki Devi Jalan road, Howrah- 711 204. 2 DCIT, Circle-=1, Kolkata 3 The CIT(A), 4 CIT, 5. D.R. 5 True Copy, By order,
Asstt. Registrar, ITAT, Kolkata