Appeal details
Counselvise Citation
[2024] 139 COUNSELVISE.COM (IT) 7683 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
8 month(s) 13 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-10-2024
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
13-08-2024
Assessment Year
2016-2017
Appeal Filed On
08-02-2024
Judgement Text
" आयकर अपील\nय अ\u000bधकरण,च\u0010डीगढ़ \u0014यायपीठ , च\u0010डीगढ़ \nIN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH \nBENCH ‘SMC’ CHANDIGARH \n \nBEFORE: SHRI A. D. JAIN, VICE PRESIDENT AND \nSHRI KRINWANT SAHAY, ACCOUNTANT MEMBER \n \n आयकर अपील सं./ ITA No. 114/CHD/2024 \n \u0001नधा\u0005रण वष\u0005 / Assessment Year : 2016-17 \n \n \nBalaji Timber And Plywood Co \nRajiv Goel And Associates, 179, \nBank \nRoad, \nAmbala \nCantt. \n133001 Punjab \n \nबनाम \nVS \nACIT, Circle-1(1), \nChandigarh \n \n\u000eथायी लेखा सं./PAN /TAN No: AAGFB 6597B \nअपीलाथ\u001c/Appellant \n \n\u001d\u001eयथ\u001c/Respondent \n \n \n\u0001नधा\u0005\u0017रती क\u001a ओर से/Assessee by : Shri. Dhruv Goel, C. A. \nराज\u000eव क\u001a ओर से/ Revenue by : Sh. Ved Parkash Kalia, JCIT, Sr. DR \n \n \nतार\u001dख/Date of Hearing : 13.08.2024 \n उदघोषणा क\u001a तार\u001dख/Date of Pronouncement : 22.10.2024 \n \n \nPHYSICAL HEARING \n \n आदेश/ORDER \n \nPER KRINWANT SAHAY, ACCOUNTANT MEMBER: \n \nThe appeal in this case has been filed by the \nassessee against the order dated 11.12.2023 passed by \nthe ld. Addl./JCIT(A)-5, Kolkata. The grounds of appeal \nare as under: \n\nITA 114/CHD/2024 \nA.Y.2016-17 \n2 \n \n“1. That the ld. JCIT(A)-5, Kolkata has erred in law and facts \nin \nconfirming \nthe \ndisallowance \nof \nrent \nexpenses \nof \nRs.12,95,400/- made by the AO. \n \n2. That the ld. JCIT(A)-5, Kolkata has erred in law and on \nfacts in confirming the additions of Rs.12,95,400/- without \nadherence to principles of natural justice. \n \n3. That the appellant craves leave to add, alter, amend or to \nsubstitute the above grounds of appeal either before or at the \ntime of hearing of case.” \n \n \n \n2. \nBrief facts of the case as per the order of the Addl. \nCIT(A) is that the assessee is a firm deriving the income from \nbusiness of retail and wholesale trade of timber. The \nassessee company filed its return of income for Assessment \nYear: 2016-17 on 12.09.2016, the case was selected for \nscrutiny notice for the same was issued and it was duly \nserved upon the assessee. The Assessing Officer passed the \norder u/s 143(3) on 08.12.2018 making an addition of \nRs.15,95,400/- on account of disallowance of rent expenses \npaid by the assessee as rent of payment as different \ngodowns. The ld. Addl. CIT(A) has given his findings on this \nissue in the appeal order as under: \n \n“The fact of this ground is AO had disallowed the rent \nexpenses on account of the fact that the appellant had failed \nto provide supporting documents such as rent agreement \nproof of ownership of property and deals of TDS deducted. \n \nThe appellant has based his argument on that the business \nthat appellant engaged to needs rented godowns, rent \n\nITA 114/CHD/2024 \nA.Y.2016-17 \n3 \n \nexpense regularly incurred over the years, and Form 16A \nissued. \n \nThese arguments put forth by appellant are not correct an \nexpense regularly booked does not accord itself genuineness. \nThe business that appellant engaged in may not need rented \ngodowns. The form 16A issued does not automatically give \ngenuineness to a transaction, \n \nThe appellant needs to submit the documentary evidence of \ndetail rent agreement, the ownership of premises taken on \nrent and the factual evidence that premises are actually used \nfor keeping goods. Further, AO has never mentioned about \nsurvey or its findings in the body of assessment order, as \nappellant claimed.” \n \n \n3. \nDuring proceedings before us, the ld. counsel of the \nassessee has filed all relevant documents regarding payment \nof rent for godowns at different places along with the paper \nbooks regarding ownership of such premises by the owners of \nsuch godowns. The ld. counsel also argued that in the trade \nof manufacturing of timber and it’s timber and plywood \nrequires much storage spaces for storing cut plywood and for \nthat purpose the assessee needs godowns as well as \ncounters. It was also brought on record by the counsel of the \nassessee that the rental expenses relating to majority of such \ngodowns and outlets were fully allowed in earlier years. The \nassessee has also brought on record that such expenses \nincurred \nby \nthe \nassessee \nhave \nbeen \nfully \nallowed \nin \nsubsequent years also. Counsel of the assessee has pointed \n\nITA 114/CHD/2024 \nA.Y.2016-17 \n4 \n \nout that it is only in the year of consideration that such rent \npayments have been disallowed despite the fact that they \nwere never disallowed in earlier years nor have been \ndisallowed in the subsequent years. \n \n4. \nThe ld. DR relied mostly on the findings given by the AO \nand the ld. Addl. CIT(A). \n \n5. \nWe have considered the findings given by the AO in the \nassessment order as well as the ld. Addl. CIT(A) in his \nappeal. \nWe \nhave \nalso \nconsidered \nthe \narguments \nand \ndocuments related to rental payments for godowns filed by \nthe counsel of the assessee (which were filed before \nauthorities below also) and we have also considered the \narguments made by the ld. DR during the proceedings before \nus. \n \n6. \nWe find that there is no denying the facts that the \nassessee requires godowns for storing plywood and timber \nand the assessee also requires show-rooms in order to sale \nthem. It is seen from the record that the rental payment of \nsuch godowns and show-rooms have been accepted by the \ndepartment in earlier years and the same rental payments \nhave been accepted by the department in subsequent years \n\nITA 114/CHD/2024 \nA.Y.2016-17 \n5 \n \nalso. The facts mentioned by the AO as well as by the ld. \nAddl. CIT(A) in the year under consideration are not different \nfrom the facts of the same trade and in assessee’s own case \nin earlier as well as subsequent years. Therefore, we don’t \nfind any reasons to disallow of such rental payments in one \nparticular year when both the AO as well as the ld. Addl. \nCIT(A) have accepted that the business of the assessee in the \nyear under consideration was running as usual as in earlier \nyears. So, the use of godowns and show-rooms by the \nassessee cannot be denied in the year under consideration \nalso. Once, it is accepted of this payment of rent for such \ngodowns and show-rooms, in earlier and subsequent years, it \ncannot \nbe \ndenied \nto \nthe \nassessee \nin \njust \none \nyear. \nAccordingly, the assessee’s appeal on this ground is allowed. \n \n7. \nIn the result, the appeal filed by the assessee is \nallowed. \n \n \nOrder pronounced as on 22.10.2024. \n \n Sd/- Sd/- \n(A. \n D. JAIN) (KRINWANT SAHAY) \n VICE PRESIDENT ACCOUNTANT MEMBER \n \n \n \n \n \n \n“GP-Sr. PS” \n \nआदेश क\u0002 \u0003ितिलिप अ\tेिषत/ Copy of the order forwarded to : \n \n1. \nअपीलाथ\u000f/ The Appellant \n2. \n.\u0003\u0010यथ\u000f/ The Respondent \n\nITA 114/CHD/2024 \nA.Y.2016-17 \n6 \n \n3. \nआयकर आयु\u0014/ CIT \n4. \nिवभागीय \u0003ितिनिध, आयकर अपीलीय आिधकरण, च\u0018डीगढ़/ DR, ITAT, CHANDIGARH \n5. \nगाड\u001c फाईल/ Guard File \n \n \n \n \n \n \n \n \n \n \n \n \nआदेशानुसार/ By order, \nसहायक पंजीकार/ Assistant Registrar \n \n \n \n \n \n \n \n"
Mehul