TaxTMI 
TaxTMI 
2021 (6) TMI 258
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....O by applying he G.P. rate on the undisclosed sales. 3. On the facts and in the circumstances of the case, the CIT(A) has erred in directing the Assessing Officer to allow deduction under section 80IB(11A) of the Income tax Act,1961. 4. On the facts and in the circumstances of the case, the CIT(A) has erred in holding that the assessee is engaged in the integrated business of transportation handling and storage of food grains and conditions contained in section80IB(11A) are fulfilled and, therefore, entitled to the deduction under section 80IB(11 A) of the Act. 5. On the facts and in the circumstances of the case, the CIT(A) has failed to appreciate the bare facts of the case that the plant & machinery put to use prior to 01.04.2001 in Bahalgarh Unit, constituted more than 20% due to which condition for deduction was not fulfilled. 6. The Oder of the CIT(A) is erroneous and is not tenable on facts and in law. ITA No. 4159/DEL/2013 (Assessee's appeal) 1. That search conducted under Section 132 is illegal, bad in law and without jurisdiction and assessment made U/s 143(3) is also illegal, bad in law and without jurisdiction. 2.....
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....ed in law and on facts in only allowing the part relief in respect of disallowance made U/s 40(a)(ia) by the AO. The CIT(A) should have deleted the entire addition/disallowance on this account. 11. Without prejudice to the above, the CIT(A), in view of the facts and circumstances of the case, has erred in law and on facts in holding that where TDS has been deducted at lesser rate the disallowance U/s 40(a)(ia) of the Act is required to be made. The CIT(A) has failed to appreciate that no disallowance U/s 40(a)(ia) of the Act is required to be made where TDS has been deducted at lesser rate. 12. That CIT(A), in view of the facts and circumstances of the case, has erred in law and on facts in upholding the addition/disallowance U/s 40(a)(ia) on account of freight charges paid to various/different truck owner. The CIT(A) has also failed to appreciate that provision of Section 194C are not applicable to such payment and no TDS is required to be made on such payment. 13. That CIT(A) has failed to appreciate that the provision of Section 40(a)(ia) are not applicable in respect of disallowances made by the AO and disallowance are unjust, unlawful and without any....
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....011 thereby assessed total income at Rs. 23,42,49,777/- after making additions. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. First we are taking up appeal of the assessee whereby the Ld. AR submitted that Ground No. 1 to 5 and Ground No. 14 are not pressed. Hence, Ground No. 1 to 5 and 14 are dismissed. 6. As regards Ground No. 6 & 7 of the assessee's appeal relating to disallowance under Section 40A(3) at Rs. 6,31,641/-, the Ld. AR submitted that the Assessing Officer made addition to the extent of Rs. 5,58,296/- under Section 40A(3) of the Act in respect of freight payments made to transporters and truck operator inter-alia for purchase of paddy. The Ld. AR submitted that this issue is decided against the assessee in its own case for A.Y. 2008-09 in ITA No. 4158/Del/2013 order dated 19.01.2021, wherein the Tribunal relying upon the order passed in the case of L T Foods Ltd., group company of the assessee upheld the disallowance under Section 40A(3) to the extent of Freight payments made to transporters and truck operator. In relation to disallowance for Rs. 66,333/- , bei....
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.... 14. While accepting the stand taken by the assessee that since the tax was collected in the hands of the four individuals who are the promoters of the company and this fact was taken notice by the Ld. DRP while passing the order dated 4/9/2012 in assessee's own case for the assessment years 2008-09 and 2009-10 and to direct the Assessing Officer not to make any addition on this issue, we hold that the impugned addition cannot be sustained. We, accordingly, dismiss this ground. Grounds No. 5 and 6 are general in nature and do not require any adjudication." In the present assessment year i.e. 2009-10 also there is no distinguishing facts brought out by the assessee. Thus, this addition to the extent of Rs. 5,58,296/- is sustained. As regards to disallowance for Rs. 66,333/- , being depreciation on capital expenditure of Rs. 5,35,468, this aspect is covered in favour of the assessee in assessee's own case for A.Y. 2008-09 in ITA No. 4158/Del/2013. As relates to other payments disallowed u/s 40A(3) towards Rs. 47,012/- the similar addition is deleted in earlier assessment year 2008-09 by the Tribunal in ITA No. 4158/Del/2013. The facts are identical in the present assessment year....
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....investment Rs. 46,524,788 ½% of Average Value of Investment Rs. 23,264 Thus, in view of the above, the Ld. AR submitted that the disallowance, if at all can be restricted to Rs. 23,264 only. 10. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 11. We have heard both the parties and perused all the relevant material available on record. In the present case, the satisfaction is recorded while invoking Rule 8D of the Income Tax Rules, 1962. But the Assessing Officer considered exempt income earned as share in profit from partnership firm for the purpose of disallowance under Section 14A of the Act. The investments was made out of own funds and not borrowed funds and therefore, the assessee has not made any disallowance out of interest expenditure. The Ld. AR's contentions that under Rule 8D (2)(iii), what is disallowable is an amount equal to ½ percentage of the average value of investment, the income from which does not or shall not form part of the total income, is right. Therefore, as per the chart given by the Ld. AR, at the time of hearing, we direct the Assessing Officer to verify the same and thereafter....
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....t no disallowance under Section 40(a)(ia) is sustainable in cases of short-deduction of TDS. Thus, the issue relating to disallowance on account of short deduction of TDS is allowed. Hence, Ground No. 10 to 13 are partly allowed. 15. As regards Ground No. 15 to 17 relating to addition on account of alleged undisclosed sales/difference in stock valuations to the extent of Rs. 72,06,659/-, the Ld. AR referred Page 15 para 10 of the Assessing Officer's order and further submitted that books of accounts were accepted and stock is tallying with the balance sheet. There is no evidence for undisclosed sale which was pointed out by the Assessing Officer or by the CIT(A) in their respective orders. The Ld. AR further submitted that the addition made by the Assessing Officer is based on incorrect appreciation of facts. The Ld. AR submitted that there is no difference in quantity of stock found during the course of search vis-a-vis recorded in books of account. The alleged discrepancy occurred on account of different methods of valuation adopted by the search team and the assessee. The Ld. AR submitted that after search operation, a detailed reconciliation statement along with explanation ....
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....books of accounts maintained in the regular course of business. The Ld. AR submitted that the assessee has been consistently following the well accepted principle of valuation of inventory at cost or net realizable value (NRV) whichever is lower, as propounded by the ICAI vide Accounting Standard - 2 on 'Valuation of Inventory'. The assessee determines the cost of raw material on FIFO basis and cost of finished goods is ascertained on the basis of absorption costing. As a result of different methods of valuation adopted by the search team and the assessee, paddy and rice as on 31.03.2009 was valued at Rs. 21,663.34 per MT & Rs. 37,446.54 per MT respectively by the assessee as against Rs. 18,052 per MT & 31,227 per MT adopted by the search team. The Ld. AR further submitted that the addition made by the Assessing Officer is totally based on guess work, surmises and conjectures and thus, are liable to be deleted. The Ld. AR also relied upon the decision in case of J. J Enterprises vs. CIT 254 ITR 216. 16. The Ld. DR relied upon the assessment order and the order of the CIT(A). As regards Ground No. 15 to 17, the Ld. DR submitted that the Assessing Officer has taken cognizance o....
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....e Assessment Order. 19. The Ld. AR submitted that the CIT(A) rightly deleted the addition u/s 69 and relied upon the order of the CIT(A) as the said addition is already made u/s 40A(3) of the Act by the Assessing Officer. 20. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that this issue is wrongly raised by the Revenue as the addition of Rs. 49,04,354 was already been made as addition under Section 40A(3) of the Act by the Assessing Officer and the Ground Nos. 6 to 7 of the Assessee's appeal are already discussed hereinabove paras. Hence, we dismiss Ground No. 1 of the Revenue's appeal. 21. As regards to Ground 2 of the Revenue's appeal relating to addition on account of alleged undisclosed sales/difference in stock valuation, this issue is connected to Ground Nos. 15 to 17 of the assessee's appeal which is answered in favour of the assessee in above mentioned para. Hence, Ground 2 of Revenue's appeal is dismissed. 22. As regards Ground No. 3 to 5 of the Revenue's appeal, relating to deduction u/s 80IB (11A), the Ld. DR submitted that the assessee has integrated business and is claiming old machinery an....
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....on "handling", occurring in section 80IB(11A) of the Act on the touchstone of the object sought to be achieved through such incentive, namely, achieving the enhanced food security by way of greater efficiency in the grain management system by minimizing the post-harvest food grain losses. It is an undeniable fact that traditionally pounding was the way in which the paddy was converted to the form of rice by separating the husk and brawn. It is also common knowledge that in that process there used to be quantitative and qualitative losses, caused by the breaking of the grains etc. By de-husking the paddy and converting it into rice, no new article is brought into existence which is qualitatively different from the inputs, but is the simple process of de-husking the paddy to obtain the rice. This conversion meets the objective of minimizing the post-harvest losses which would lead to the greater efficiency of the food grain management system and consequently to the enhanced food security. In Commissioner of Customs (Import) vs. Dilip Kumar and Company & Ors. CA No. 3327 of 2007 (SC), the Hon'ble Supreme Court held that while interpreting the taxing statutes, the applicability of the ....