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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 ..... ppeals ITA Nos. 242 & 243/GAU/2017 are directed against the very CIT(A)'s separate orders; both dated 26.10.2017 passed in case nos. CIT(A)/SHG/10322 & 10328/2016-17 involving proceedings u/s 154 of the Act. 2. The assessee's last three appeals ITA Nos. 63 & 64/GAU/2018 and ITA No. 167/GAU/2018 for Assessment Years 2010-11 to 2012-13 are directed against the very CIT(A)'s separate orders dated 04.12.2017 except in last assessment year involving order dated 23.09.2016, in proceedings u/s 143(3) of the Act, respectively. Heard both the parties. Case files perused. 3. It transpires at the outset that the assessee's appeals ITA Nos. 63 & 64/GAU/2018 for AYs 2010-11 & 2011-12 suffer from 41 days delay each in filing stated to be attributable to various official commitments of its staff members in election duties and other administrative functions. The Revenue is fair enough in not disputing the said solemn averments. We therefore condone the impugned delay of 41 days in filing 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 assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse that were wrongly disallowed by the Assessing Officer without furnishing further details. Here, it was incumbent on the appellant to furnish the supporting details as to what kind of payment/reimbursement/billing modalities were entered into with the Consultants. If the hotel bills raised were towards the reimbursement of actual expenses incurred by Consultants, then there might not be any element of profit involved. This would be distinct from cases where the hotel bills are raised for the gross amount inclusive of professional fees as well as reimbursement of actual expenses. It was entirely upto the appellant to provide the details which are entirely within its knowledge. Faced with such factual inadequacy, there would be no question of considering any remand or verification at the end of the Assessing Officer. Where a claim has been succinctly and clearly made in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was shown at Rs. 59,08,962/-. Inexplicably, the opening cash (at 01.04.20107) was reflected at Rs. 1,07,14,466/-. The aforesaid discrepancy was brought to light since scrutiny proceedings for assessment years 2007-2008 and 2008-2009 were conducted simultaneously by the Assessing Officer. When asked to explain the difference amounting to Rs. 48,05,504/-, no satisfactory response was tendered. The Assessing Officer concluded that the appellant had understated the cash balance as at March 31,2007, by a sum of Rs. 48,05,504/-. Resultantly the same was added back to the total income under section 69A of the Act. Per contra, the appellant has submitted as under: (a) The assessing officer has observed that as on 31.03.2007 the cash balance was Rs. 5908962/- as per Schedule - 7 of the audited accounts. However, the opening cash balance as on 01.04.2007 has been shown at Rs. 10714466/- in the accounts for the financial year 2007-2008. He, therefore, concluded that there was understatement of cash of Rs. 4805504/- as on 31.03.2007. He, therefore, added this amount of Rs. 48055041- in the total income of the appellant treating it as unexplained money U/s.69A of the Act. (b) It is resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the error are irrelevant. Moreover, the fact that the closing and corresponding opening balances were hugely differing, is far too much of a glaring, ex facie discrepancy to be overlooked. The appellant has suggested that there is an equivalent liability that has not been incorporated in the balance sheet. However, the said liability has not been identified. Thus, the hypothetical liability, if any, is also undisclosed. Book keeping necessarily involves a double entry. By stating that there is a corresponding entry (which is itself missing) the appellant's arguments are theoretical and devoid of any force. The onus was entirely on the appellant 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 ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting them off. Hence, a sum of Rs. 41,92,370/- claimed as bad debts was disallowed by the Assessing Officer and added back to the total income. 12.2 On the other hand, the appellant stated that the bad debts claimed was allowable in terms of section 36(l)(vii) read with section 36(2) of the Act, as all the conditions stipulated were fulfilled. It was submitted that a sum of Rs. 35,88,392/- was due from industrial consumers whose names along with the amount written-off was furnished. The balance written-off was said to be 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant case, the assessee has requested that the details could not be produced before the Assessing Officer at the time of scrutiny assessment proceedings for reasons already reproduced earlier at para 4.3 ante. However, it is necessary to examine what details has the appellant filed during the course of the appellate proceedings. As mentioned, other than the names and amount of ten debtors, no other particulars have been furnished. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore deem it appropriate that the instant factual issue also requires necessary verification at least on test check basis. The Assessing Officer is directed to examine the same afresh within three effective opportunities of hearing as per law. 11. Next comes leave encashment disallowance of Rs. 5,55,20,105/- made in both the lower proceedings for lack of 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 Rs. 75,000/-, 1,14,000/- and 11,20,000/-; re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fresh factual reconciliation as per law. This appeal ITA No. 31/GAU/2015 is allowed for statistical purposes. 16. We stay in AY 2008-09 and notice that the assessee's latter appeal ITA 242/GAU/2017 involving rectification 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 Rs. 3,10,30,538/- for lack of actual payment and alleged unreconciliation difference of Rs. 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 groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore all these issues back to the Assessing Officer to finalize consequential factual verification 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 Rs. 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 Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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