2021 (4) TMI 1319 - AT - Income Tax

Tribunal upholds CIT(A)'s order, granting relief to assessee.

The Deputy Commissioner of Income Tax, Circle-1 (1) (2), Surat. Versus M/s J.K. Paper Ltd.

The Tribunal dismissed the Revenue's appeal and upheld the CIT(A)'s order, providing relief to the assessee on all grounds. The Tribunal's decision was ... Disallowance of Social Forestry and depreciation on at use for social forestry - HELD THAT:- Considering the consistent decisions of the Tribunal in assessee’s own case [2020 (12) TMI 215 - ITAT SURAT] and following the principal of consistency and more over the Ld. CIT(A) granting relief to the assessee by following the order of Tribunal, therefore, we do not find any infirmity in the order passed by Ld. CIT(A). Hence, we affirm the order passed by Ld. CIT(A). In the result this ground of appeal is dismissed. Disallowance of Unexplained Creditors - HELD THAT:- We have noted that ld.CIT(A) while passing the order followed the order of Tribunal in assessee’s own case for A.Y. 2005-06 [2011 (2) TMI 1460 - ITAT AHMEDABAD] - Thus following the principal of consistency and more over the Ld. CIT(A) granting relief to the assessee by following the order of Tribunal, therefore, we do not find any infirmity in the order passed by Ld. CIT(A). Hence, we affirm the order passed by Ld. CIT(A). In the result this ground of appeal is dismissed. Disallowance on excess process stock declared to bank - HELD THAT:- We have noted that ld. CIT(A) while passing the order followed the order of Tribunal in assessee’s own case for A.Y. 2002-03 dated 09.04.2009.[2009 (9) TMI 999 - ITAT AHMEDABAD] - Tribunal in assessee’s own case and following the principles of consistency and more over the Ld. CIT(A) granting relief to the assessee by following the order of Tribunal, therefore, we do not find any infirmity in the order passed by Ld. CIT(A). Hence, we affirm the order passed by Ld. CIT(A). In the result this ground of appeal is dismissed. Addition made on account of commission paid on sale - HELD THAT:- We have noted that ld. CIT(A) while passing the order held that that ad-hock disallowance by A.O. is not justified. We have further on similar ground of appeal in assessee’s own case similar relief was granted to assessee in appeal for A.Y. 2010-11 to 2012-13 [2020 (12) TMI 215 - ITAT SURAT] Addition made on account of Other Expenses - CIT-A deleted the addition - HELD THAT:- We have noted that ld. CIT(A) while passing the order followed the order of Tribunal in assessee’s own case for A.Y. 2002-03 [2009 (9) TMI 999 - ITAT AHMEDABAD] Addition made on account of Employee Welfare Expenses - HELD THAT:- We have noted that ld.CIT(A) while granting relief to the assessee by taking view that ad-hoc disallowance by A.O. is not justified. We have further noted similar ground of appeal that raised by the revenue was dismissed by Tribunal in appeal for A.Y. 2010- 11 to 2012-13 [2020 (12) TMI 215 - ITAT SURAT] Addition made on account of Book Profit computation u/s.14A - HELD THAT:- As decided in own case as relying on Special Bench of Delhi Tribunal in Vireet investment [2017 (6) TMI 1124 - ITAT DELHI] held that computation under clause (f) of Explanation 1 to section 115JB(2), is to be made without resorting to computation as contemplated under section 14A. Considering the aforesaid discussions, we do not find any merit in this ground of appeal. Addition made on account of Non deduction of tax on foreign remittance - CIT-A allowed relief to assessee - HELD THAT:- We have noted that ld.CIT(A) while passing the order followed the order of his predecessor for AY 2012-13 [2020 (12) TMI 215 - ITAT SURAT] wherein its was held that commission paid to non-resident for services rendered outside India cannot be deemed to be income accrued or arisen in India. And followed the decision of Hon’ble Supreme Court in CIT Vs Toshoku Ltd [1980 (8) TMI 2 - SUPREME COURT] We have further noted that in appeal for AY 2010-11 to 20112- 13, similar relief was granted by Tribunal to assessee by dismissing the similar ground of appeal raised by revenue Revenue appeal dismissed. Issues Involved:1. Disallowance of Social Forestry Expenses2. Deletion of Addition of Unexplained Creditors3. Deletion of Addition on Excess Process Stock Declared to Bank4. Deletion of Addition on Commission Paid on Sale5. Deletion of Addition on Other Expenses6. Deletion of Addition on Employee Welfare Expenses7. Deletion of Addition in Book Profit Computation u/s 14A8. Non-Deduction of Tax on Foreign RemittanceDetailed Analysis:1. Disallowance of Social Forestry ExpensesThe Tribunal upheld the deletion of the disallowance of social forestry expenses amounting to Rs. 85,38,112/-. The Tribunal noted that similar issues had been decided in favor of the assessee in previous years (A.Y. 2002-03, 2010-11 to 2012-13). The expenses were considered agricultural in nature and thus allowable. The Tribunal followed the principle of consistency and affirmed the order of the CIT(A).2. Deletion of Addition of Unexplained CreditorsThe Tribunal confirmed the deletion of the addition of Rs. 9,70,460/- made by the AO on account of unexplained creditors. It was noted that similar issues had been resolved in favor of the assessee in A.Y. 2005-06 and subsequent years (2010-11 to 2012-13). The Tribunal reiterated that the provisions of Section 41(1) could not be invoked as the liabilities were not written back in the books. The Tribunal upheld the CIT(A)'s order, following the principle of consistency.3. Deletion of Addition on Excess Process Stock Declared to BankThe Tribunal dismissed the Revenue's appeal concerning the deletion of the addition of Rs. 12,58,580/- for excess process stock declared to the bank. The Tribunal noted that similar issues had been resolved in favor of the assessee in earlier years (A.Y. 2002-03, 2010-11 to 2012-13). The AO was directed to verify the stock statements, and if no discrepancies were found, no addition was warranted. The Tribunal upheld the CIT(A)'s order.4. Deletion of Addition on Commission Paid on SaleThe Tribunal upheld the deletion of the addition of Rs. 18,60,000/- related to commission paid on sales. The Tribunal observed that similar issues had been decided in favor of the assessee in previous years (A.Y. 2011-12). The AO's ad-hoc disallowance was deemed unjustified as the expenses were genuine business expenses. The Tribunal affirmed the CIT(A)'s order.5. Deletion of Addition on Other ExpensesThe Tribunal confirmed the deletion of the addition of Rs. 1,88,35,000/- made by the AO on account of other expenses. Similar issues had been resolved in favor of the assessee in earlier years (A.Y. 2011-12). The AO's ad-hoc disallowance was deemed unjustified. The Tribunal upheld the CIT(A)'s order, following the principle of consistency.6. Deletion of Addition on Employee Welfare ExpensesThe Tribunal upheld the deletion of the addition of Rs. 92,55,000/- related to employee welfare expenses. The Tribunal noted that similar issues had been resolved in favor of the assessee in previous years (A.Y. 2010-11 to 2012-13). The AO's ad-hoc disallowance was deemed unjustified as no discrepancies were found in the books. The Tribunal affirmed the CIT(A)'s order.7. Deletion of Addition in Book Profit Computation u/s 14AThe Tribunal confirmed the deletion of the addition of Rs. 21,34,390/- made in the book profit computation under Section 14A. The Tribunal noted that similar issues had been resolved in favor of the assessee in earlier years (A.Y. 2002-03 to 2004-05, 2010-11 to 2012-13). The Tribunal followed the principle of consistency and upheld the CIT(A)'s order.8. Non-Deduction of Tax on Foreign RemittanceThe Tribunal upheld the deletion of the addition of Rs. 42,36,591/- made on account of non-deduction of tax on foreign remittance. The Tribunal followed the decision of the Hon'ble Supreme Court in CIT Vs Toshoku Ltd (125 ITR 525 SC) and noted that similar issues had been resolved in favor of the assessee in previous years (A.Y. 2010-11 to 2012-13). The Tribunal affirmed the CIT(A)'s order, following the principle of consistency.Conclusion:The Tribunal dismissed the Revenue's appeal and upheld the CIT(A)'s order, providing relief to the assessee on all grounds. The Tribunal's decision was based on the principle of consistency, referring to previous decisions in the assessee's own case and relevant higher court rulings.