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TMI Blog2019 (11) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... Necessary computation to follow. This first substantive ground is taken as partly accepted in foregoing terms. Section 69A unexplained money addition - HELD THAT:- Dispute between the parties is that of reconciliation of assessee s closing opening cash in hand as per Schedule-7 of its balance sheet as on 31.03.2007 and 01.04.2008 with corresponding sums of ₹ 59,08,962/- and 1,07,14,466/-; respectively. The assessee has further pleaded that there is a lack of reconciliation in accounts pertaining to 4 lakh consumers and 9 circles with 21 divisions. This assessee is a public sector power utility company wherein the main source of cash in hand is that of consumer payments by way of power charges only. We therefore deem it appropriate that larger interest of justice will be met in case the Assessing Officer re-examines the entire issue afresh as per law within three effective opportunities of hearing. The assessee shall place on record all necessary particulars within the very number of opportunities. Bad debt disallowance - HELD THAT:- There is no dispute between the parties about allowability of a bad debts claim under the provisions of the Act per se since the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure claim is a revenue neutral instance in case the assessee concerned is assessed at the same rate both in the years of accrual and in the year of payment. We therefore decline the Revenue s foregoing technical argument. Mr. Goenka at this stage submitted that the assessee s payee also enjoys Section 197(1) exemption as per ADIT(Exemp)-2, Hyderabad s order dated 21.04.2005 and the relevant certificate to this effect which was placed before the CIT(A) could not be factually verified. We therefore deem it appropriate to send the instant issue back to the Assessing Officer for afresh factual verification as per law within three effective opportunities of hearing. Allowability of the alleged penalty amount imposed under the Tripura Value Added Tax Act, 2004 read with the Tripura Value Added Tax Rules, 2005 - Both the lower authorities hold the same to be not allowable being to a penalty imposed for non-compliance of a fiscal statute as per Section 37(1) of the Act that the same is opposed to public policy - HELD THAT:- We find from the perusal of the CIT(A) s detailed discussion in page 33 para 26.4 that the said issue of correctness of TVAT is yet to attain finality since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling of both these appeals. The same are now taken for adjudication on merits. 4. It emerges during the course of hearing that many of the issues raised in these appeals are identical. We therefore proceed assessment year-wise for the sake of convenience and brevity. Assessment Year 2007-08 ITA No. 30/GAU/2015 5. The assessee s first substantive grievance raised in the instant appeal seeks to reverse both the lower authorities action disallowing its expenditure claim on consultancy amounting to ₹ 6,77,877/- to the tune of ₹ 1,89,532/-. The CIT(A) s detailed discussion to this effect reads as under: In respect of balance amount of ₹ 1,89,532/-, the position obtaining is that no details were filed before the Assessing Officer and none have been filed even in the appellate proceedings. It. is not possible to accede to the request of the appellant to remand the matter to the Assessing Officer for verification of evidence, when, no such evidence(s) have been filed in the first place. The appellant has furnished the Ledger Account copy in respect of Consultancy Fee, along with written submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appellate proceedings and the only matter that remains is a simple verification of a document or a plain fact, the ground can be decided with a direction to the Assessing Officer to verify the said factual claim. In essence, the decision is to be given by the Appellate Commissioner and merely a routine check is to be made by the Assessing Officer. The appellant has had sufficient time to collect the underlying facts, but it has not done so. Thus, it cannot possibly seek any relief on the basis of general submissions and a copy of ledger account which continues to confuse rather than throw any light on the various expenditures claimed. In effect, the compliance deficiency has persisted beyond the assessment stage as well and the submissions made now fail to improve its position. On the basis of insufficient facts and explanation preferred by the appellant, an open- ended exercise by the Assessing Officer would not be consistent with the appellate powers that are statutorily available. After careful consideration of all aspects, there is no option but to uphold the disallowance of ₹ 1,89,532/- out of ₹ 6,77,877/- made by the Assessing Officer under section 40(a)(ia) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per Schedule - 7 of the audited accounts. However, the opening cash balance as on 01.04.2007 has been shown at ₹ 10714466/- in the accounts for the financial year 2007-2008. He, therefore, concluded that there was understatement of cash of ₹ 4805504/- as on 31.03.2007. He, therefore, added this amount of ₹ 48055041- in the total income of the appellant treating it as unexplained money U/s.69A of the Act. (b) It is respectfully submitted that there was some mistake in compilation of our accounts. Our corporation during the previous year relevant to the assessment year under appeal had 9 circles and 21 divisions. We had over 4 lakhs consumers. Because of shortage of qualified and experienced accounts staff, the work of compilation of accounts was out sourced to a C. A. firm. The accounts could only be compiled and audited on 06.10.2010 i.e. after more than 3 1/2 years of the close of accounting year. Hence, there was no way to notice such mistake. (c) Because of mistake in compilation of our accounts, the cash balance as on 31.03.2007 was taken at a lower figure as pointed out by the assessing officer but at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant to lead credible evidence to explain the aforesaid as the affairs are entirely within his knowledge. The same cannot be erroneously explained by stating that there ought to be a corresponding equivalent liability which would make the said discrepancy tax-neutral due to an unidentified, self-cancelling entry. The argument of the appellant is contrary to fundamental principles of taxation and accountancy. The same is rejected as insufficient and illusory. Resultantly, the addition made by the Assessing Officer is upheld. The ground of appeal fails and is, therefore, dismissed. 8. It emerges from the above extracted lower appellate discussion that the dispute between the parties is that of reconciliation of assessee s closing opening cash in hand as per Schedule-7 of its balance sheet as on 31.03.2007 and 01.04.2008 with corresponding sums of ₹ 59,08,962/- and 1,07,14,466/-; respectively. The assessee has further pleaded that there is a lack of reconciliation in accounts pertaining to 4 lakh consumers and 9 circles with 21 divisions. This assessee is a public sector power utility company wherein the main source of cash in hand is that of consumer paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attributable to a large number of rural consumers to whom electricity was supplied under the Rajiv Gandhi Gramin Vidyut Yojana (RGGVY) Scheme and other poor consumers . The appellant referred to the decision of the Hon ble Supreme Court in T.R.F. Ltd vs CIT reported in 323 ITR 397 in support of the claim. 12.3 The matter has been considered. Firstly, there is no dispute that an opportunity was given by the Assessing Officer to produce the supporting factual details, but it was not availed of. Here, the appellant has prayed that the additional evidence ought to be admitted for reasons mentioned as recorded in para (4.3) of this appellate order (supra) for the preceding assessment year. However, what has been filed at this stage is merely a list of ten consumers and the amount written-off vis- -vis each one of them with a common remark that service connection disconnected permanently . This aggregates ₹ 35,88,392/-. For the remaining amount, even the basic details have not been furnished by the appellant, such as the names or the amounts written-off. These were not produced before the Assessing Officer as well. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed. Thus, even if it is to be taken that the supporting evidences in respect of bad debt could not be produced before the Assessing Officer, the position remains largely the same in these appellate proceedings. The name, address, amount and the assessment year in which these amounts were earlier included in the taxable income are sine qua non prior to a consideration of appellant s claim. If the appellant has been unsuccessful in producing the details even at this stage, there would be no basis to seek verification by the Assessing Officer. Its prayer for admitting additional evidence is rendered otiose. The request of the appellant could have been considered if the full particulars of the bad debts been furnished since in such an event, the ground of appeal can be decided with a direction to Assessing Officer for a simple verification. Thus, in their absence, even this is not possible in face of the utter failure on the part of the appellant to support its claim. The extent of its continuing default can be easily gauged by the fact that in respect of bad debts amounting to ₹ 6,03,978/- the appellant has been unable to state (even now) the names of the beneficiaries, other t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual payment u/s 43B(f) of the Act. Hon ble Calcutta high court has admittedly quashed the foregoing statutory provision itself in Exide Industries Ltd. vs. U.O.I. 292 ITR 470 (Cal). Hon ble Apex Court admitted the Revenue s SLP (Civil) No. 22889/2008 on 08.05.2009 and stayed operation of above high court s judgement. The said case is stated to be pending till date. We therefore restore this issue back to the Assessing Officer to decide afresh as per their lordships final call on the issue. This second substantive ground is taken as accepted for statistical purposes. 12. The assessee s third substantive grievance seeks to delete the consultancy fee, security service charges and donation disallowances made to the Administrative Staff College of India payments involving figures of ₹ 75,000/-, 1,14,000/- and 11,20,000/-; respectively. Learned lower authorities hold that the assessee had not deducted TDS on the former two payments. Mr. Goenka s only plea during the course of hearing is that the assessee had deducted TDS involving the former two claims as on 04.04.2008 and 12.05.2008 i.e. in next financial year 2008-09 respectively. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectification proceedings challenges both the authorities action making Section 115JB MAT adjustment of its leave encashment. Suffice to say, we have already restored the said main issue back to the Assessing Officer in foregoing paragraphs. We therefore restore the instant lis itself back to the Assessing Officer with liberty to the assessee to raise all factual/legal pleas. ITA No. 242/GAU/2017 is also allowed for statistical purposes. Assessment Year 2009-10 ITA No. 32/GAU/2015 17. The assessee s former two substantive grounds challenge both the lower authorities identical action disallowing/adding leave encashment u/s 43B(f) of ₹ 3,10,30,538/- for lack of actual payment and alleged unreconciliation difference of ₹ 30,20,101/- in various grants received from the state government under different schemes; respectively are restored back to the Assessing Officer in view of our discussion on the very issues in preceding assessment years. These two substantive grounds are therefore accepted for statistical purposes. 18. Next comes the third issue of allowability of the alleged penalty amount of ₹ 1,11,37,453/- i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as per law within three effective opportunities of hearing. This appeal ITA No. 63/GAU/2018 is accepted for statistical purposes. Assessment Year 2011-12 ITA No. 64/GAU/2018 21. It transpires during the course of hearing that the assessee s four substantive grounds involving disallowances/additions of miscellaneous expenditure, excess liability in respect of sundry creditors, leave encashment and sundry debtors, balance sheet of ₹ 1,37,02,519/-, 44,55,332/-, 1,30,91,074/- and 8,82,316/-; respectively deserve to be restored back to the Assessing Officer in view of our foregoing discussion on the very substantive grounds in earlier assessment years. We order accordingly. This appeal ITA No. 64/GAU/2018 is accepted for statistical purposes. Assessment Year 2012-13 ITA No. 167/GAU/2016 22. The assessee s three substantive grounds raised in the instant appeal challenge correctness of both the lower authorities action disallowing nonreversal of excess provision of interest, unpaid statutory liability in the nature of statutory liabilities u/s 43B and depreciation disallowance of ₹ 18,84,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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