The Grain Merchants Co-op Bank Ltd. v. The Assistant Commissioner of Income-tax, Circle- 5(2)(1), Bangalore
[Citation -2019-LL-0828-49]

Citation 2019-LL-0828-49
Appellant Name The Grain Merchants Co-op Bank Ltd.
Respondent Name The Assistant Commissioner of Income-tax, Circle- 5(2)(1), Bangalore
Court ITAT-Bangalore
Relevant Act Income-tax
Date of Order 28/08/2019
Assessment Year 2014-15
Judgment View Judgment
Keyword Tags sufficient opportunity • business expenditure • remand report • appropriation of profit • source of fund • business purpose
Bot Summary: CIT Date of hearing : 20.08.2019 Date of Pronouncement : 28.08.2019 ORDER Per Shri A.K. Garodia, Accountant Member This appeal is filed by the assessee which is directed against the order of ld. The impugned Appellant order dated 13-08-2018 passed by the Learned CIT(A), Bengaluru, is opposed to law, facts and circumstances of the Case. The Ld. CIT(A) has erred in not providing adequate and sufficient opportunity to the appellant before passing an impugned Appellant order dated 13-08-2018. The Ld. CIT(A) has erred in confirming the addition of Rs.17,53,500/-as income of the Appellant without appreciating fact that the expenditure claimed purely a business expenditure allowable under section 37 of Income tax act, since all the expenditure were supported by proper evidence. 37 as expenditure wholly and exclusively incurred for the purpose of business. In our considered opinion, whether the expenditure is debited to PL account or not and what is the source of fund for incurring the ITA No. 3121/Bang/2018 Page 3 of 3 expenditure cannot be conclusive and that too without referring to nature of expenditure. The assessee has to furnish the complete details along with the evidences regarding those expenses for which deduction is claimed by the assessee and the burden is on the assessee to establish that these expenses are incurred for business purposes and therefore, allowable u/s.


IN INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA No. 3121/Bang/2018 Assessment Year : 2014-15 M/s. Grain Merchants Co-op Bank Assistant Ltd., Commissioner of # 02, Pampa Mahakavi Vs. Income Tax, Road, Circle 5 (2) (1), Chamrajpet, Bangalore. Bangalore 560 018. PAN: AAAAT4670J APPELLANT RESPONDENT Assessee by : Shri Pradeep Kumar .S, CA Revenue by : Shri R.N. Siddappaji, Addl. CIT (DR) Date of hearing : 20.08.2019 Date of Pronouncement : 28.08.2019 ORDER Per Shri A.K. Garodia, Accountant Member This appeal is filed by assessee which is directed against order of ld. CIT(A)-5, Bangalore dated 13.08.2018 for Assessment Year 2014-15. 2. grounds raised by assessee are as under. 1. impugned Appellant order dated 13-08-2018 passed by Learned CIT(A), Bengaluru, is opposed to law, facts and circumstances of Case. 2. Ld. CIT(A) has erred in holding that Appellant has failed to submit objection to remand report, without examining reply letter with reference to remand report submitted on 12-09-2018. 3. Ld. CIT(A) has erred in confirming additions made by AO amounting to Rs.17,53,500/- without examining details furnished in written submission on 06-08-2018 and reply to remand report submitted on 12-09-2018. ITA No. 3121/Bang/2018 Page 2 of 3 4. Ld. CIT(A) has erred in not providing adequate and sufficient opportunity to appellant before passing impugned Appellant order dated 13-08-2018. 5. Ld. CIT(A) has erred in confirming addition of Rs.17,53,500/-as income of Appellant without appreciating fact that expenditure claimed purely business expenditure allowable under section 37 of Income tax act, since all expenditure were supported by proper evidence. 6. Appellant craves leave to add, alter, amend and delete any of grounds at time of hearing. For these and other grounds that may be urged at time of hearing, Appellant prays that your Hon'ble Authority be pleased to pass order directing Authorities below to delete additions of made of Rs.17,53,500/- and further to be pass such other orders granting such other relief as your Hon ble Authority may deem fit in interest of justice and equity. 3. Both sides were heard. This was query of bench as to whether details and evidences of various expenses claimed is available so that nature of expenses can be examined and decided. In reply, it was submitted by ld. AR of assessee that complete details and evidences are not readily available and hence, in interest of justice, matter may be restored back to file of AO/ld. CIT(A) for fresh decision and if this is done, assessee will furnish all necessary details along with evidences. 4. We have considered rival submissions and gone through orders of authorities below. We find that on page no. 6 of his order, it is noted by ld. CIT(A) that expenditure may have been incurred to achieve objects of society but expenditure has not been incurred solely for business purpose. It is further noted by ld. CIT(A) on same page that amount spent by assessee out of funds earmarked by appropriation of profits cannot be allowed as deduction u/s. 37 as expenditure wholly and exclusively incurred for purpose of business. Hence it is seen that decision on this issue is mainly on this basis that expenditure have been incurred out of funds earmarked by appropriate of profits and there is no finding about nature of expenditure. In our considered opinion, whether expenditure is debited to P&L account or not and what is source of fund for incurring ITA No. 3121/Bang/2018 Page 3 of 3 expenditure cannot be conclusive and that too without referring to nature of expenditure. Hence, we set aside order of ld. CIT(A) and restore matter back to his file for fresh decision by way of speaking and reasoned order regarding nature of expenses incurred by assessee and claimed as deduction. assessee has to furnish complete details along with evidences regarding those expenses for which deduction is claimed by assessee and burden is on assessee to establish that these expenses are incurred for business purposes and therefore, allowable u/s. 37 of IT Act or any particular section of IT Act. We make no comment on merit. 5. In result, appeal filed by assessee is allowed for statistical purposes. Order pronounced in open court on date mentioned on caption page. Sd/- Sd/- (BEENA PILLAI) (ARUN KUMAR GARODIA) Judicial Member Accountant Member Bangalore, Dated, 28th August, 2019. /MS/ Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, Income Tax Appellate Tribunal, Bangalore. Grain Merchants Co-op Bank Ltd. v. Assistant Commissioner of Income-tax, Circle- 5(2)(1), Bangalore
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