×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
This appeal by the Revenue is preferred against the order of the ld. CIT(A) – 34, New Delhi dated 15.03.2016 pertaining to A.Y 2007-08.
2. The solitary grievance of the Revenue is that the ld. CIT(A) erred in law in allowing expenses amounting to Rs. 9,81,39,180/- out of total disallowance amounting to Rs. 10,64,56,411/- made by the Assessing Officer on account of disallowance of Mining Expenses.
3. The assessee is engaged in the business of manufacturing of pig iron. During the course of scrutiny assessment proceedings, the assessee was asked to produce the books of account for verification. On verifying the books of account on test check basis, the Assessing Officer noticed that in the profit and loss account, the assessee has debited an amount of Rs. 53.22 crores under the head ‘Mining Expenses’. The assessee was asked to produce the bills and vouchers in support of this expenditure. However, on receiving no plausible reply, the Assessing Officer disallowed 20% of the entire expenses on adhoc basis and made addition of Rs. 10,64,56,441/-.
4. The assessee agitated the matter before the ld. CIT(A) and submitted the details of mining expense alongwith certain additional evidences. Admitting the additional evidence, the ld. CIT(A) forwarded the same to the Assessing Officer for his comments giving him an opportunity of being heard.
5. The Assessing Officer submitted a remand report dated 18.04.2012 and the comments were general in nature. The ld. CIT(A) further gave one more opportunity to the Assessing Officer and asked the Assessing Officer to specifically verify the unvouched expenses under the head mining expenses. The Assessing Officer, vide his report dated 28.08.2015, submitted as under:
“Kindly refer to your letter No. F.No.CIT(Appeal)-l12012-13/130 dated 18/19.082015 on the subject mentioned above.
2. As per earlier directions in this regard letters dated 11.10.2012, 18.08.2014 andl8 03 2015 were issued to the assessee by my predecessors. Further hearings were conducted on 26.08.14,04.09.2014 and 1l.09.2014(as per record) to seek the desired details. The queries raised on the said dates and the replies of the assessee in this regard are reproduced as under:-
2.1 Vide letter dated 11.10.2012 the assessee was asked to produce:
Complete details as to expenses booked under the head Mining Expenses which comprises of-
(a) Opening stock at Rs. 168.67 Millions,
(b) Mining Expenses 532.28 Millions
(c) Commission to M/s. Stempcor at Rs.26.33 Mi lions and
(d) Closing stock at Rs. 265,47 Millions
1. To furnish the account of all the parties to whom amount paid under the head mining expenses during the F Y. 2006-07, in the following format
You are requested to submit the above details/evidence on or before 22.10.2012.
2.1.1. In response to this assessee has filed reply dated 22.10.2012 in which stated as under:
Para 2. In reply thereto and the instruction of the assessee, it is submitted that submissions dated 28.02.2012, 12.03.2012 and 05.04.2012 had already been filled alongwith copy of invoices on sample basis of all expenses claimed in the return of income by the assessee with AC IT, Central Circle- VIL
Para 5. Thus it is prays that your good self may dispense with again producing books of account along with original voucher because records are in bulk and have to be carried in container. Moreover, records are more than five years old and have to be again stored out.
Para 6. However, copy of all submission along with all paper books relating to copy of invoices on sample basis of all expenses claimed are again enclosed herewith for your reference.
2.2. Another letter was issued dated 18.08.2014. The queries raised vide the said letter are reproduced as under:- As per direction of the Ld CIT(A), New Delhi: you are required to provide complete details of expenses under the head 'Mining Expenses' alongwith voucher for verification.
The next date of hearing is fixed for 26.08.2014 at 11.00 AMAwas asked to produce the following voucher of mining expenses:However, the assessee had expressed inability to produce voucher 3 to Rs 83,17,261/- as mentioned below. The assessee has also stated vide leller dated 11..09,2014 that since the record has become very old therefore, the vouchers have either deteriorated or destroyed and the could only produce some of the voucher called for(on sample basis) and requested that the requirement of producing these voucher may be dispensed with.
3. Based on the above, it's summarized that the following vouchers of mining expenses(as sought for on test check basis) were not produced as evidence: