Iapl/141/2016 Of Commissioner Of Income Tax v. M/S Indo Prosoya Foods Limited

Case :- INCOME TAX APPEAL No. - 141 of 2016Appellant :- Commissioner Of Income TaxRespondent :- M/S Indo Prosoya Foods LimitedCounsel for Appellant :- Krishna AgarawalCounsel for Respondent :- Rishi Raj Kapoor Hon'ble Bharati Sapru,J.Hon'ble Neeraj Tiwari,J. Heard Sri Krishna Agrawal, learned Counsel for the appellant and Sri Rishi Raj Kapoor, learned Counselfor the assessee. This is an appeal filed by the department underSection 260-A of the Income Tax Act, 1961 for theassessment year 2003-04 against an order passed bythe Tribunal dated 11.12.2015. The questions of lawsought to be answered are hereunder:- "(1) Whether the Hon'ble ITAT justified in law by relying on the judgment of the Hon'bleHigh Court in the case of CIT-v-Delhi Press Patra Prakashan Ltd. in ITA No.49-50/1996without appreciating the ratio of the decision of the Hon'ble Jurisdictional High Court,Allahabad in the case of R&P Exports-V-CIT (2005) 279 ITR 539 (Allahabad) ? (2) Whether on the facts and circumstances of the case, the Hon'ble ITAT was justified inshifting onus of providing genuineness of transaction to the assessing officer in place ofthe assessee with respect to addition u/s 68 of the Act for Rs.17,00,000/- ? (3) Whether on the facts and circumstances of the case, the Hon'ble ITAT was justified inlaw holding that the case of the assessee is covered by exception provided in Rule 6DDas the assessee did not have bank account at the place of payment i.e. Union withrespect to addition u/s 40(a)(3) of the Act for Rs.1,85,136/- ?" We have heard learned Counsels on both side and alsoperused the entire material on record. It is abundantly clear from the record that on all threequestions the Tribunal has recorded findings of fact,firstly that the unit was a manufacturing unit and wasclearly engaging more than ten persons and, therefore,was entitled to the benefit of the provisions of Section80 1 B of the Act as the benefit which is provided is inthe nature of an incentive. Insofar as the second question is concerned, theaddition of Rs.17,00,000/- has been deleted by the Tribunal after taking into account the entire facts andcircumstances of the case and after recording that noadverse material was found against the assessee andall his transactions with six Companies situate atCalcutta were found to be genuine transactions and allthe Companies were registered Companies. Insofar as the question no.3 is concerned, also theTribunal has accepted the contention of the assesseethat a sum of Rs.7,70,180/- has been paid in cash ondifferent dates as per details on page 8 of theassessment order relating to unit no.1 andRs.1,55,000/- relating to unit no.2 to U.P. PowerCorporation against electricity bills. The AssessingOfficer had disallowed the claims made by theassessee since the amounts were exceedingRs.20,000/-. The assessee, therefore, submitted before the CIT (A)that the same had been disallowed without taking intoaccount the fact that the assessee is an industrial unitsituated at Akrampur, Unnao and the office of U.P.Power Corporation is also situated in Unnao proper ata distance of 8 to 10 K.M. from the unit. It was further contended that the assessee did not haveany bank account at Unnao and outstation chequeswere not being accepted by the U.P. PowerCorporation, therefore, they had been forced to makepayment in cash for the electricity bills to the U.P.Power Corporation Ltd., which is a 100% State ownedbodyand in view of this the assessee claimedthat itwas entitled to the benefit of provisions of Rule 6DDof the Income Tax Rules. The CIT (A), therefore,deleted the dis-allowance. The Tribunal has accepted the contention of theassessee as the payments had been made by theassessee for reasons of commercial expediency and, therefore, the provisions of Section 40 (A) (3) of theAct would not apply in the case of the assessee. Thus, the finding of the Tribunal are conclusive inrespect of all three questions. The Tribunal has accepted the contention of theassessee as the payments had been made by theassessee for reasons of commercial expediency and, therefore, the provisions of Section 40 (A) (3) of theAct would not apply in the case of the assessee. Thus, the finding of the Tribunal are conclusive inrespect of all three questions. Such being the facts and circumstances of the case, the questions are answered in favour of the assessee andagainst the department. The appeal is dismissed. No costs. Order Date :- 3.1.2018S.P.