2015 (5) TMI 504 - AT - Income Tax

Tribunal Upholds CIT(A)'s Decision on Assessing Officer's Additions

The Tribunal upheld the CIT(A)'s decision to delete additions made by the Assessing Officer in various categories, such as late deposit of employees' PF ... Disallowance under section 43B - late deposit of employees contribution to the Provident Fund for Factory and Federation Staff - CIT(A) deleted the addition - Held that:- The Tribunal in assessee’s own case for assessment year 2007-08 was regarding deletion of addition by the Assessing Officer on account of late deposit of employees’ contribution to Provident Fund and it was held by the Tribunal in that year that since the entire amount of Provident Fund contribution was deposited before due date of filing of return, the same is allowable as per the amended provisions of section 43B of the Act. In the present year also, a clear finding is given by CIT(A) on page No. 4 of his order that all the amounts of Provident Fund has been deposited before the due date of filing the return.- Decided against revenue. Suppression of production of sugar and its sale without recording entry in the books of accounts - CIT(A) deleted the addition - Held that:- Assessing Officer has adopted yield at 9% as against 8.37% reported by the assessee. The Assessing Officer has alleged in the assessment order that Kisan Sahkari Chini Mills, Puranpur has reported yield at 9.38% in the year under consideration as against 8.37% reported by the assessee. Hence, it is seen that the facts of the present year are identical to the facts in assessment year 2007-08. Since under similar facts, the addition was deleted by the Tribunal in assessment year 2007-08, we do not find any reason to take a contrary view in the present year and therefore, on this issue also, we decline to interfere in the order of CIT(A). - Decided against revenue. Undisclosed Production of Baggasse and its sale without accounting for in the books of account - CIT(A) deleted the addition - Held that:- The yield of main product or by-product is not constant in each and every case and every year. It is dependable on so many factors and therefore, merely on this basis that in the case of one assessee in one particular year, higher yield was recorded and that should be considered as yield of baggasse for all the assessees in all the years, is not correct. There is no other reason given by the Assessing Officer for doubting the yield of baggasse reported by the assessee in the Tax Audit Report. In our considered opinion, on the basis of a single case of a different assessee for one assessment order i.e. 92-93, the addition made by the Assessing Officer is not justified in the absence of any other supporting material - Decided against revenue. Addition on account of closing stock of sugar including the Excise Duty - CIT(A) deleted the addition - Held that:- In assessment year 2007-08, similar matter was restored back by the Tribunal to the file of CIT(A) for fresh decision wherein held There is no finding given by CIT(A) regarding the main objection of the Assessing Officer that the same stock for which the assessee adopted rate of ₹ 1,630/-, ₹ 1,665/-, ₹ 1,700/- and ₹ 1,735/- respectively per quintal as on 31/03/2006, in the present year, the assessee has applied a rate of ₹ 1,250/- ₹ 1,285/-, ₹ 1,320/- and ₹ 1,355/- per quintal respectively. If the same stock is lying then what is the basis of applying lower rate in the present year is not clear and CIT(A) has not given any finding on this aspect. Thus set aside the order of CIT(A) and restore the matter back to his file for deciding the issue afresh by passing reasoned and speaking order - Decided in favour of revenue for statistical purposes. Issues Involved:1. Deletion of addition under section 43B of the I.T. Act, 1961 for late deposit of employees' contribution to the Provident Fund.2. Deletion of addition on account of suppression of production of sugar and its sale.3. Deletion of addition on account of production of Baggasse and its sale.4. Deletion of addition on account of closing stock of sugar including the Excise Duty.5. Deletion of addition on account of low production/yield of Bagasse.6. Deletion of addition on account of low yield of sugar.7. Deletion of addition on account of suppressed production and sale of Molasses.8. Deletion of addition on account of employer and employees' contribution to PF & GIS.Issue-wise Detailed Analysis:1. Deletion of Addition under Section 43B for Late Deposit of Employees' Contribution to Provident Fund:The Revenue's appeal contested the deletion of Rs. 47,99,382/- added by the Assessing Officer (AO) for late deposit of employees' PF contributions. The Tribunal observed that in the previous assessment year (2007-08), it was held that the entire PF contribution deposited before the due date of filing the return is allowable as per the amended provisions of section 43B. The CIT(A) confirmed that all amounts were deposited before the due date. Respecting the prior Tribunal decision, the Tribunal declined to interfere with the CIT(A)'s order, rejecting Ground No. 1.2. Deletion of Addition on Account of Suppression of Production of Sugar and Its Sale:The Revenue appealed against the deletion of Rs. 3,37,96,178/- added by the AO for alleged suppression of sugar production and its sale. The Tribunal noted that in the previous year, a similar addition was deleted because the AO's basis of comparison with another mill's yield was insufficient. The Tribunal emphasized that sugar production is under the Excise Department's supervision, and no adverse findings were recorded by them. With identical facts in the current year, the Tribunal upheld the CIT(A)'s order and rejected Ground No. 2.3. Deletion of Addition on Account of Production of Baggasse and Its Sale:The Revenue challenged the deletion of Rs. 38,41,184/- added by the AO for unaccounted production and sale of Baggasse. The Tribunal referred to the previous year's decision, where it was held that the production of sugar and its by-products is under excise control, and no specific instances of unrecorded sales were pointed out by the AO. The Tribunal found no difference in facts for the current year and upheld the CIT(A)'s order, rejecting Ground No. 3.4. Deletion of Addition on Account of Closing Stock of Sugar Including Excise Duty:The Revenue contested the deletion of Rs. 4,08,94,043/- added by the AO for closing stock valuation discrepancies, including excise duty. The Tribunal noted that in the previous year, the matter was remanded to the CIT(A) for a fresh decision due to insufficient findings. Following the same, the Tribunal set aside the CIT(A)'s order and remanded the matter for a reasoned decision after providing both sides an opportunity to be heard, allowing Ground No. 4 for statistical purposes.5. Deletion of Addition on Account of Low Production/Yield of Bagasse:For the assessment year 2008-09, the Revenue appealed against the deletion of Rs. 29,31,485/- added by the AO for low Bagasse yield. The Tribunal found the issue covered by the previous year's decision, where the addition was deleted due to lack of documentary evidence and specific findings. With no difference in facts, the Tribunal upheld the CIT(A)'s order and rejected Ground No. 1 for 2008-09.6. Deletion of Addition on Account of Low Yield of Sugar:The Revenue challenged the deletion of Rs. 1,00,20,843/- added by the AO for low sugar yield in 2008-09. The Tribunal noted that the issue was covered by the previous year's decision, where similar additions were deleted due to lack of evidence. With identical facts, the Tribunal upheld the CIT(A)'s order and rejected Ground No. 2 for 2008-09.7. Deletion of Addition on Account of Suppressed Production and Sale of Molasses:The Revenue appealed against the deletion of Rs. 75,24,770/- added by the AO for suppressed production and sale of molasses in 2008-09. The Tribunal found that the AO's basis was incorrect as the actual production disclosed by the assessee was almost equal to the AO's estimate. Hence, the Tribunal upheld the CIT(A)'s order and rejected Ground No. 3 for 2008-09.8. Deletion of Addition on Account of Employer and Employees' Contribution to PF & GIS:The Revenue contested the deletion of Rs. 2,89,588/- and Rs. 1,07,00,024/- added by the AO for late deposit of PF & GIS contributions in 2008-09. The Tribunal noted that the CIT(A) decided based on timely deposit before filing the return, which was not contradicted by the Revenue. Following the previous year's decision, the Tribunal upheld the CIT(A)'s order and rejected Grounds No. 4 and 5 for 2008-09.Conclusion:The appeal for the assessment year 2006-07 was partly allowed for statistical purposes, while the appeal for the assessment year 2008-09 was dismissed.