The Dharmapuri Roller Flour Mills, ... vs Assessee

अपीलाथ क ओर से / Appellant by : Shri. T. Vasudevan, Advocate यथ क ओर से / Respondent by : Shri. A.V. Sreekanth, IRS, JCIT

सन ु वाई क तार ख/Date of hearing : 21.05.2015 घोषणा क तार ख /Date of Pronouncement : 29.05.2015

आदे श / O R D E R

PER CHANDRA POOJARI, ACCOUNTANT MEMBER

This appeal by assessee is directed against the order of the

Commissioner of Income Tax (Appeals), Salem, dated 29.07.2013 for

the assessment year 2007-2008.

:- 2 -: I.T.A.No.1803/Mds/2013.

2. The assessee filed the following grounds of appeals;-

"1. The order of the learned Commissioner of Income Tax (Appeals), Salem in confirming the disallowances of ₹3,68,318/- as per Assessing Officer remanded report is bad in law and against facts of the case.

2. The appellant claimed expenses relting to import of wheat through M/s. PEC Ltd (A government of India Undertaking). The appellants made all the payments demanded by PEC Ltd through cheques the total net payments made was ₹55,98,273/- out of this a sum of ₹3,86,318/- is disallowed.

3. ₹3,86,318/- being expenses related to purchases made is an allowable expenditure incurred. Therefore, the order of CIT(Appeals), Salem confirming the addition be set aside for reasons stated and that may be adduced at the time of hearing and justice rendered."

3. At the time of hearing, the ld. Authorised Representative for

assessee did not press ground nos. 2 & 3. Therefore, these grounds

are dismissed as not pressed.

4. Coming to the ground no.4, the fact relating to the issue are

that the assessee claimed an expenditure of E28,92,822/- towards

import expenses. Since the assessee has not produced the bills or

invoices or any other supporting material in respect of this

expenditure, the same was disallowed by the Assessing Officer. Before

the first appellate stage, the assessee produced certain evidence in

support of the claim. The Commissioner of Income Tax (Appeals) :- 3 -: I.T.A.No.1803/Mds/2013.

asked the Assessing Officer to examine the same and submit a report.

The Assessing Officer has submitted a detailed report as under:-

" During the course of assessment, the assessee has not produced bill/vouchers in support of expenses claimed ₹28,92,822/-. Hence, the expenses disallowed in the original assessment order dated 30.12.2009. Aggrieved over the addition the assessee filed an appeal before the Commissioner of Income Tax (Appeals)''.

The assessee was required to produce material evidence in support of

E28,92,822/-. The assessee firm purchased wheat from PEC Ltd, in

two invoices for E2,49,16,045/- and E2,50,41,501/-. On verification of

invoices there were no expenses included. The expenses were

reimbursement by the company out of advances made by the assessee

firm on various dates. According to the debit note details of

reimbursement of expenses as under:-

02.03.2007 debit note : E27,05,452/-

31.03.2007 debit note : E25,06,503/-

----------------

E52,11,955/-

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During the course of assessment proceedings, the Assessing Officer

accepted E27,05,452/- and E25,06,503/- was not accepted as no

evidence produced.

4.1 The assessee claimed E28,92,821/- as reimbursement of

expenses for which a debit note for E25,06,503/- was produced. The :- 4 -: I.T.A.No.1803/Mds/2013.

assessee also claimed that the advance money of E4,75,000/- as

reimbursement expenses. If it is taken into account total comes to

E29,81,503/- as against E28,92,821/-. According to two debit notes

expense allowable E52,11,955/- only. E27,05,452/- has already been

allowed in the original assessment. The Commissioner of Income Tax

(Appeals) may be considered to allow the other debit note towards

reimbursement of expenses E25,06,503/- and the balance was

disallowed. Thus (E28,92,821 - 25,06,503/-) E3,86,318 was

disallowed. Against this the assessee is in appeal before us.

5. We have heard both the parties and perused the material

available on record. At the time of hearing, the ld. Authorised

Representative for assessee submitted that Commissioner of Income

Tax (Appeals) is not justified in placing reliance on the debit note to

the tune of E52,11,955/- without going through the details of entire

expenditure incurred by the assessee. According to the ld. Authorised

Representative for assessee the Commissioner of Income Tax

(Appeals) has not appreciated the fact in proper perspective thus, the

matter needs to be considered afresh.

:- 5 -: I.T.A.No.1803/Mds/2013.

6. On the other hand, the ld. Departmental Representative has

not put serious objection for considering the plea of the assessee

counsel.

7. We are of the opinion that Commissioner of Income Tax

(Appeals) observed that the expenditure incurred by assessee is only

E52,11,955/- on the basis of two debit notes. In our opinion, the

entire details of expenditure to be seen and the same is to

appreciated by the Assessing Officer afresh. Accordingly, the issue

was remitted back to the file of Assessing Officer for fresh

consideration in accordance with law.

8. In the result, the appeal of the assessee is partly allowed for

statistical purposes.

Order pronounced on Friday, the 29th day of May, 2015, at Chennai.

Sd/- Sd/- (वी. दग ु ा! राव) (चं पज ू ार ) V. DURGA RAO (CHANDRA POOJARI) या"यक सद य / JUDICIAL MEMBER लेखा सद य/ ACCOUNTANT MEMBER चे$नई/Chennai. %दनांक/Dated: 29.05.2015. KV

आदे श क त(ल)प अ*े)षत/Copy to: 1. अपीलाथ /Appellant 2. यथ / Respondent 3. आयकर आय, ु त (अपील)/CIT(A) 4. आयकर आय, ु त/CIT 5. )वभागीय त न/ध/DR

6. गाड फाईल/GF.

:- 6 -: I.T.A.No.1803/Mds/2013.