M/S BIHAR STATE WAREHOUSING CORPN. LTD.,PATNA vs. ACIT, CIRCLE-2, PATNA, PATNA

This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2011-12 is directed against the order passed u/s 250(6) of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals)-1, Patna [in short ld. “CIT(A)”] dated 30.05.2018 which is arising out of the assessment order framed u/s 263/143(3) of the Act dated 30.12.2016.

Registry has informed that the appeal is time barred by 33 days. Condonation application has been filed by the assessee. After perusing the same, we find force in the reasons mentioned therein and are satisfied that the assessee was prevented for reasonable cause in filing the instant appeals. We, therefore, condone the delay and admit the appeal for adjudication.

The assessee is in appeal before this Tribunal raising the following grounds: “

We have heard rival contentions and perused the records placed before us.

The assessee has challenged the finding of ld. CIT(A) in confirming the disallowance of storage loss amounting to Rs. 5 Cr u/s 36(1)(vii) of the Act. We, on perusal of the assessment order, find that ld. AO denied the assessee’s claim of provision of storage loss of Rs. 5 Cr on account of the fact that the liability for such storage loss could not be ascertained. However, on perusal of the I.T.A. No.: 239/Pat/2018 Assessment Year: 2011-12 M/s. Bihar State Warehousing Corporation Ltd. finding of the ld. CIT(A) we find that it is not specifically with regard to the issue raised before us. Ld. CIT(A) has referred to the storage loss of Rs. 12.46 Cr in the warehouse and thereafter while concluding the finding, ld. CIT(A) observes that in spite of the attempts made by the appellant in respect of allowability of provision as bad debts, the so-called recovery being made on account of shortages are provisions only and not actual recoveries. We are unable to understand that how the issue of bad debts has been discussed by ld. CIT(A) when the issue in question is relating to storage loss. Bad debts relate to the irrecoverable sales while storage loss is part of the business loss which arises in the nature of business run by the assessee.

We are of the considered view that the issue needs to be restored to the ld. CIT(A) as the finding in the impugned order deals with some other issues which have not been raised by the ld. AO. Ld. D/R was fair enough not to raise any objection if the issues raised in the instant appeal is restored to ld. CIT(A). We, therefore, restore the sole issue raised by the assessee in the instant appeal for afresh adjudication to ld. CIT(A). Needless to mention that proper opportunity of being heard should be provided to the assessee. The assessee is directed to remain vigilant and file necessary documents, if considered, in support of its grounds of appeal and should not take adjournment, unless otherwise required for reasonable cause. In case after providing sufficient opportunity to the assessee, there is no compliance before the ld. CIT(A), then ld. CIT(A) can pass the speaking order in accordance with law.