2014 (12) TMI 221

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....ssues. 3.1 P.F. amount Rs. 12342/- and ESI Rs. 6101/- though deposited before filing of I.T. return U/s 139(1). 3.2 Interest Rs. 5575/- is added and Rs. 5575/- is disallowed similarly interest on buyers credit Rs. 81652/-. The claim is genuine and details are in the records of the A.O. 3.3 TCS on scrap Rs. 250395/- stating to be not deposited, though not applicable and also to levy penalty U/s 221. 3.4 Bad debts Rs. 180694/- on account of M/s Uttam Galva Steel Ltd. being unrecoverable hence written off. 3.5 Currency fluctuation amount of Rs. 586419.00. The difference is booked as per rates as on 31/03/2008 that is as per applicable accounting standards as well in compliance to Section 145 of I.T. Act, 1961. 4. The appellant craves leave to add, alter, amend the ground of appeal." 2. The assessee is engaged in the manufacturing, trading export, import of chemicals. The assessee furnished return declaring income at Rs. 6,21,410/- on 29/9/2009. This case was scrutinized U/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act) and original assessment order was passed on 28/12/2011 by the Assessing Officer and following additions were made (i) job wo....

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....that the assessee had paid interest of Rs. 28,403/- and received interest at Rs. 5,575/- from bank of Rajasthan but has also been debited. Therefore, the assessee had taken double benefit as actually, it should be credited the interest of account. The company had made provisions for the payment of interest but not paid U/s 43B of the Act before the due date of return, which should have also be disallowed by the Assessing Officer. During the year under consideration, the assessee had shown scrap sale of Rs. 2,50,39,512/-. Scrap sales attract TCS @ 1% as per provisions of the Act. The assessee had not deducted any TDS on scrap, therefore, the assessee's income under charge of income by Rs. 2,50,39,512/- and consequent tax effect of Rs. 2,50,395/-. Further, penalty U/s 221 may also be imposed since the assessee company had not deposited the tax of Rs. 2,50,395/- within the prescribed time limit. The assessee company had shown bad debts of Rs. 1,80,694/- from Uttam Galva Steel Ltd., which had been incurred during the year but the assessee has a creditor of company M/s Uttam Galva Steel Ltd. and had a outstanding balance of Rs. 1.20 crores, therefore, the company M/s Uttam Galva Steel L....

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....st of Rs. 5,575/- was interest expenditure on OD against FDR and it has been correctly claimed in the interest paid account. The detail of interest account is available with Assessing Officer since the time of proceeding U/s 143(3) of the Act. The company maintained its account on mercantile system of accountancy, therefore, the interest payable on buyers credit for previous year was provided for under the head "provision for interest on Buyers Credit". Interest payable on buyers credit was paid next year and copy of ledger has been enclosed with paper book. Further according to the concept of accrual/mercantile system of accounting, the income and expenditure related to current year should be provided in same year, therefore, expenditure on interest payable is allowable. The company imported lead scrap as per ISRI (The Institute of Scrap Recycling Industries) Radio and sold in through Highseas sales. The material was an industrial raw material and not scrap within the meaning of Explanation (b) to Section 206C. The imported material was, lead scrap as per ISRI RADIO which is defined by ISRI. "The Institute of Scrap Recycling Industries", it is a industrial raw material and scrap w....

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...., which is against the principles of natural justice. Further the order is also barred by limitation as passed after limitation period. For ground No. 2, it has been submitted that show cause notice U/s 263 of the Act by the learned CIT fixing the case for hearing on 10/1/2014 and then case was again fixed on 13/2/2014. Meanwhile, the appellant approached the learned CIT, Kota in his office, after certain discussions he filed written submissions on 05/2/2014 alongwith supporting documents, evidences, copy of accounts etc. After 05/2/2013, there was no notice from the learned CIT, Kota. However, the learned CIT made the order on 24/3/2014 and in column present for the assessee, he wrote none (written submission filed). There was no question of non-presence even the assessee's AR has submitted his reply in anticipation on 13/2/2014. The order dated 24/3/2014 was delivered on 07/4/2014, it should be issued on or before 31/3/2014, therefore, revisionary is bad in the eyes of law. He relied upon various decisions. The order should have been pronounced before the due date of limitation, it should not have been kept in the file. 4. At the outset, the learned CIT DR vehemently supported....