Ram Sagar Verma, Kolkata V. I.T.O., Ward-42(3), Kolkata, Kolkata

CO 124/KOL/2013

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7336 (ITAT-KOLKATA)
• Duration Of Justice: 6 year(s) 2 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 05-09-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 20-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 143(3); 201

Judgement Text

C.O. NO. 124/KOL/2013 (IN ITA NO. 2091/KOL/2013) ASSESSMENT YEAR: 2008-2009 RAM SAGAR VERMA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ & HZ) C.O. NO. 124/KOL/2013 (ARISING OUT I.T.A. NO. 2091/KOL/2013) ASSESSMENT YEAR: 2008-2009 RAM SAGAR VERMA,................................... ..............................CROSS OBJECTOR 34/7, B.K. PAUL LANE, DUM DUM, KOLKATA-700030 [PAN: ACKPV7764J] -VS.- INCOME TAX OFFICER,................................ ...................................RESPONDENT WARD-42(3), KOLKATA, PODDAR COURT, 4 TH FLOOR, 18, RABINDRA SARANI, KOLKATA-700 001 APPEARANCES BY: N O N E, FOR THE ASSESSEE SHRI KALYAN NATH, ADDL. CIT, SR. D.R , FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : SEPTEMBER 05, 201 9 DATE OF PRONOUNCING THE ORDER : OCTOBER 25, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA & HYD ERABAD ZONE) :- THIS CROSS OBJECTION FILED BY THE ASSESSEE IN RESP ECT OF THE CORRESPONDING APPEAL FILED BY THE REVENUE BEING ITA NO. 2091/KOL/2013 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER O F INCOME TAX (APPEALS)-XII, KOLKATA DATED 19.03.2013 AND THE ISS UES INVOLVED THEREIN RELATE TO THE DISALLOWANCE OF RS.3,77,000/- AND RS. 50,000/- SUSTAINED BY THE LD. CIT(APPEALS) OUT OF THE TOTAL DISALLOWANCE OF RS.27,46,154/- AND RS.10,21,101/- MADE BY THE ASSESSING OFFICER OUT OF THE GROWING CHARGES AND TRANSPORTATION CHARGES RESPECTIVELY. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO IS ENGAGED IN THE BUSINESS OF HATCHERY. THE RETURN OF INCOME FOR THE YEAR CONS IDERATION WAS FILED BY HIM ON C.O. NO. 124/KOL/2013 (IN ITA NO. 2091/KOL/2013) ASSESSMENT YEAR: 2008-2009 RAM SAGAR VERMA 2 30.09.2008 DECLARING A LOSS. IN THE SAID RETURN, DE DUCTION OF RS. 37,77,871/- WAS CLAIMED BY THE ASSESSEE ON ACCOUNT OF EXPENSES INCURRED ON GROWING CHARGES (FARMER). DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CALLED UPON BY THE A.O. TO FURNISH THE RELEVANT DETAILS OF GROWING CHARGES SUC H AS NAME AND ADDRESS OF THE FARMER, DETAILS OF FARM LAND, QUANTITATIVE DETAILS OF READY EGGS, GROWING BIRDS ETC. THE ASSESSEE HOWEVER FAILED TO PRODUCE THE SAID DETAILS REQUIRED BY THE A.O. AND IN THE ABSENCE OF THE SAME, THE A.O. HELD THAT THE GROWING CHARGES PAID B Y THE ASSESSEE IN CASH REMAINED UNVERIFIABLE. HE ALSO NOTED THAT THERE WAS NO WRITT EN AGREEMENT ENTERED INTO BY ASSESSEE WITH FARMER. HE ALSO NOTED THAT THE TOTAL PURCHASE OF EGG, CHICKS BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS RS . 2,08,34,336/-. ACCORDING TO HIM, THE EXPENSES OF GROWING CHARGES WOULD REASONABLY BE ALLOWED TO THE EXTENT OF 5%. HE THEREFORE, RESTRICTED THE CLAIM OF THE ASSESSEE FOR GROWING CHARGES TO RS. 10,41,717/- AND DISALLOWED THE BALANCE AMOUNT OF RS. 27,36,154/ -. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE ALSO FAILED TO PRODUCE TH E RELEVANT DETAILS REQUIRED BY THE A.O. TO VERIFY THE CLAIM FOR OTHER TRANSPORT CHARGES OF RS. 10,21,101/-. IN THIS REGARD, IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE HAD CLAIMED S EPARATELY SUBSTANTIAL AMOUNT ON ACCOUNT OF LORRY FREIGHT, AIR TRANSPORTATION, RAILW AY FREIGHT, CAR HIRE CHARGES, MOTOR CYCLE EXPENSES AND CONVEYANCE EXPENSES. KEEPING IN VIEW T HESE AMOUNTS SEPARATELY CLAIMED BY THE ASSESSEE AS WELL AS THE FAILURE OF THE ASSES SEE TO FURNISH THE RELEVANT DETAILS, THE A.O. DISALLOWED THE ENTIRE OTHER TRANSPORT CHARGES OF RS. 10,21,101/- CLAIMED BY THE ASSESSEE. ACCORDINGLY, THE TOTAL INCOME OF THE ASSE SSEE WAS DETERMINED BY THE A.O. AT RS. 8,07,777/- IN THE ASSESSMENT COMPLETED UNDER SECTIO N 143(3) VIDE AN ORDER DATED 31.12.2010. 3. AGAINST THE ORDER PASSED BY THE A.O. UNDER SECTI ON 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) CHA LLENGING THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF GROWING CHARGES AND OTHER TR ANSPORTATION CHARGES AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF GROWING CHARGES AND OTHER TRANSPORTATION EXPENSES T O RS. 3,77,000/- AND RS. 50,000/- RESPECTIVELY FOR THE FOLLOWING REASONS GIVEN IN PAR A NO 4 OF HIS IMPUGNED ORDER: C.O. NO. 124/KOL/2013 (IN ITA NO. 2091/KOL/2013) ASSESSMENT YEAR: 2008-2009 RAM SAGAR VERMA 3 I HAVE CONSIDERED THE FINDING OF THE A.O. IN HIS ORDER DATED 31.12.2010 AND THE WRITTEN SUBMISSION FILED BY THE AR DURING THE APPELLATE PROCEEDING. APPEAL ON GROUND NO. 1(A) IS AGAINST THE DISALLOWANCE OF RS. 2736154/- ON ACCOUNT OF GROWING CHARGES AND RS. 1021101/- ON ACCOUNT OF OTHER TRANSPORTATION CHAR GES. THE ASSESSEE DID NOT PRESS FOR DISALLOWANCE OF TELEPHON ES CHARGES OF RS. 34425/- AND ADDITION OF OTHER SOURCE INCOME OF RS. 3 2369/-. I HAVE CONSIDERED THE FINDING OF THE A.O. IN HIS ASSESSMENT O RDER AND I HAVE ALSO CONSIDERED THE REPORT SUBMITTED BY THE A.O. VIDE LETTER NO ITO. WARD 42(3)/RR/2012-13/692 DTD. 14.03.2013. T HE A.O. IN HIS ASSESSMENT ORDER AS WELL AS IN HIS REMAND REPORT AS POINTED OUT THAT SINCE ASSESSEE HAD NOT PRODUCED ALL THE RELEVANT PAPERS, DOCUMENTS AND DETAILS AT THE TIME OF ASSESSMENT, THE REFORE, THE A.O. DISALLOWED RS. 2736154/- ON ESTIMATE BASIS ON ACCOUNT OF GROWING CHARGES. DURING THE APPELLATE PROCEEDING THE A .R. HAS EXPLAINED THE PROCESS OF GROWING OF CHICKS INTO CHICKE NS. SINCE ALL THE DETAILS WERE NOT FILED BEFORE THE A.O. THEREFORE, THEY ARE NOT BEING CONSIDERED AT THE APPELLATE STAGE AFRESH. HOWEV ER, THE A.R. HAS SUBMITTED THAT THE DISALLOWANCE BY THE A.O. ON ES TIMATE BASIS IS VERY HIGH AND EXCESSIVE IN NATURE. I HAVE TAKEN INT O CONSIDERATION THE FINDING OF THE A.O. AND SUBMISSION S AND EXPLANATIONS MADE/DISCUSSED BY THE A.R. DURING THE APP ELLATE PROCEEDING. I FIND THAT THE A.O. HAS MADE THE DECISION OF RS. 2736154/- OUT OF RS. 3777871/- ON ESTIMATE BASIS WI THOUT BRINGING ANY FINDING/EVIDENCE CONTRARY TO THE CLAIM OF THE ASSESSEE ON RECORD. THEREFORE, IN MY OPINION THE ADHOC DISALLOWANCES BY THE A.O. ON ESTIMATE BASIS IS VERY HIGH. BUT THERE IS NO DENYING THE FACT THAT IN THE ABSENCE OF SUPPORT ING DETAILS AND DOCUMENTS ASSESSEES CLAIM COULD ALSO NOT BE ACCEPT ED COMPLETELY. HENCE, DISALLOWANCE UNDER THIS HEAD IS RESTRICTED TO 10% OF THE TOTAL CLAIM MADE BY THE ASSESSEE UNDER THE HEAD GROWI NG CHARGES I.E. RS. 3,77,000/-. THUS, ASSESSEES APPEAL ON GRO UND NO 1(A) IS PARTLY ALLOWED. ASSESSEES APPEAL ON GROUND NO 1(B) IS AGAINST THE D ISALLOWANCE OF RS. 1021101/- UNDER THE HEAD OTHER TRANSPORTATION CHAR GES. THE A.O. IN HIS ASSESSMENT ORDER HAS DISALLOWED THIS AMOUN T ON THE GROUND THAT THE ASSESSEE IS CLAIMING EXPENDITURE ON A IR TRANSPORTATION, RLY. FREIGHT, CAR HIRE CHARGES, MOTOR CYCLE EXPENSES IS FOR EMPLOYEES TO VISIT FIRMS AND CONVEY ANCE IS FOR TA OF VARIOUS STAFFS. THE AR HAS ALSO CLARIFIED THAT VEHICLE CHARGES HAS BEEN CLAIMED FOR TRANSPORTING EGGS AND CHICKENS BY A SSESSEES OWN VEHICLE. THE AR HAS ALSO SUBMITTED A LIST OF SUCH VEHICLE S, EXPENDITURE OF DIESELS, INSURANCE, SALARY, REPAIRS ETC. HAVE ALSO BEEN SUBMITTED. THE A.O. IN HIS REMAND REPORT HAS MEN TIONED THAT C.O. NO. 124/KOL/2013 (IN ITA NO. 2091/KOL/2013) ASSESSMENT YEAR: 2008-2009 RAM SAGAR VERMA 4 THE AR COULD NOT PRODUCE ALL THE VOUCHERS BEFORE HIM. I HAVE CONSIDERED THE FINDING OF THE A.O. IN THE ASSESSMENT ORDER, COMMENTS OF THE A.O. IN THE REMAND REPORT AND THE SUBM ISSION FILED BY THE AR DURING THE APPELLATE PROCEEDING. I FIN D THAT THE ASSESSEE HAS CLAIMED VEHICLE EXPENSES FOR EXPENDITURE INCURRED ON HIS OWN VEHICLES WHICH ARE BEING USED FOR TRANSPORTING EGGS AND CHEEKS TO FARMS AND BRINGING THEM BACK. SO THE EXPENDI TURE INCURRED UNDER THIS HEAD CANNOT BE DENIED. BUT AT THE SAME TIME SINCE THE AR COULD NOT PRODUCE ALL THE RELEVANT VOUCHER S BEFORE THE A.O. THEREFORE, SOME CLAIM FOR OTHER THAN BUSINESS PU RPOSES CANNOT BE DENIED. HOWEVER, DISALLOWANCE OF RS. 1021101/- I S VERY HIGH AND EXCESSIVE IN NATURE. THEREFORE, ADDITION UNDER T HIS HEAD IS RESTRICTED TO RS. 50,000/-, THUS APPEAL ON GROUND NO 1(B) IS PARTLY ALLOWED. 4. AGAINST THE ORDER OF THE LD. CIT(APPEALS), THE R EVENUE PREFERRED ITS APPEAL BEFORE THE TRIBUNAL (ITA NO. 2091/KOL/2013), WHILE THE ASS ESSEE FILED ITS CROSS OBJECTION. THE APPEAL OF THE REVENUE WAS SEPARATELY AND INDEPENDEN TLY DISPOSED OF BY THE TRIBUNAL VIDE ITS ORDER DATED JUNE 20, 2018 AND THE ISSUES I NVOLVED THEREIN, WHICH ARE COMMON TO THE ISSUES RAISED IN THE PRESENT CROSS OBJECTION FI LED BY THE ASSESSEE, WERE DECIDED BY THE TRIBUNAL VIDE PARAGRAPH NO. 5 OF ITS ORDER AS U NDER:- 5. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, NON E HAS APPEARED ON BEHALF OF THE ASSESSEE. EVEN ON THE EARLIER OCCASIO NS WHEN THIS APPEAL WAS FIXED FOR HEARING, NOBODY HAD APPEARED ON BEHALF OF THE ASSESSEE. THIS APPEAL OF THE REVENUE IS THEREFORE BEING DISPOSED O F EX-PARTE QUA THE RESPONDENT ASSESSEE AFTER HEARING THE ARGUMENTS OF THE LEARNED DR AND PERUSING THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT THE RELIEF ALLOWED BY THE LD. CIT(A) TO THE ASSESSEE RE STRICTING THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF GROWING CHARGES AND OTHER TRANSPORTATION CHARGES IS CHALLENGED BY THE REVENUE IN THIS APPEAL ON A SPECIFIC GROUND THAT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WAS RELIED UPON BY THE LD. CIT(A) WHILE GIVING RELIEF TO THE ASSESSEE IN CONTR AVENTION OF RULE 46A. IN THIS REGARD, THE LEARNED DR WAS DIRECTED TO POINT O UT SPECIFICALLY SUCH ADDITIONAL EVIDENCE RELIED UPON BY THE LD. CIT(A) W HILE GIVING RELIEF TO THE ASSESSEE. HE HOWEVER WAS UNABLE TO DO SO. A PERUSAL OF THE RELEVANT PORTION OF THE IMPUGNED ORDER ALSO SHOWS THAT THE DETAILS S OUGHT TO BE FILED BY THE ASSESSEE FOR THE FIRST TIME BEFORE HIM WERE NOT TAK EN INTO CONSIDERATION BY THE LD. CIT(A) ON THE GROUND THAT THE SAME WERE NOT FILED BEFORE THE A.O. MOREOVER, THERE IS A MENTION OF THE REMAND REPORT S UBMITTED BY THE A.O. IN THE IMPUGNED ORDER OF THE LD. CIT(A) WHICH SHOWS TH AT A REMAND REPORT WAS ALSO SOUGHT BY THE LD. CIT(A) FROM THE A.O. THE LEARNED DR HAS NOT DISPUTED THIS POSITION WHICH IS CLEARLY EVIDENT FRO M THE RECORD. HE HOWEVER HAS CONTENDED THAT THE DISALLOWANCE SUSTAINED BY TH E LD. CIT(A) OUT OF C.O. NO. 124/KOL/2013 (IN ITA NO. 2091/KOL/2013) ASSESSMENT YEAR: 2008-2009 RAM SAGAR VERMA 5 GROWING CHARGES AND OTHER TRANSPORTATION CHARGES IS VERY LOW AND UNREASONABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. HE HAS CONTENDED THAT THE SAME MAY BE APPROPRIATELY INCREASED. I AM UNABLE TO ACCEPT THIS CONTENTION OF THE LEARNED DR. AS ALREADY NOTED, THE RELIEF ALLOWED BY THE LD. CIT(A) TO THE ASSESSEE ON BOTH THE ISSUES IS SPECIF ICALLY CHALLENGED BY THE REVENUE ON THE GROUND OF VIOLATION OF RULE 46A WHIC H IS NOT THERE. MOREOVER, THE DISALLOWANCE MADE BY THE A.O. ON ACCO UNT OF GROWING CHARGES AND OTHER TRANSPORT CHARGES WAS HIGHLY EXCE SSIVE AND UNREASONABLE AS FOUND BY THE LD. CIT(A) AND THERE I S NOTHING BROUGHT ON RECORD BY THE LEARNED DR TO REBUT OR CONTROVERT THE FINDINGS RECORDED BY THE LD. CIT(A) IN THIS REGARD. THE LEARNED DR HAS ALSO NOT BEEN ABLE TO POINT OUT AS TO HOW THE DISALLOWANCE SUSTAINED BY THE LD. CIT (A) OUT OF GROWING CHARGES AND OTHER TRANSPORT CHARGES IS NOT FAIR AND REASONABLE. IN MY OPINION, THE RELEVANT FACTS AND FIGURES AS DISCUSSE D BY THE LD. CIT(A) IN HIS IMPUGNED ORDER SHOW THAT THE DISALLOWANCE SO SUSTAI NED BY HIM IS QUITE FAIR AND REASONABLE AND THERE IS NO JUSTIFIABLE REASON T O INTERFERE WITH THE SAME, I, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) GIVING RELIEF TO THE ASSESSEE ON BOTH THE ISSUES UNDER CONSIDERATION AND DISMISS THIS APPEAL FILED BY THE REVENUE. 5. WHEN THIS CROSS OBJECTION FILED BY THE ASSESSEE WAS SEPARATELY FIXED BEFORE THE TRIBUNAL FOR HEARING, NONE APPEARED ON BEHALF OF TH E ASSESSEE. AS RIGHTLY POINTED OUT BY THE LD. D.R., BOTH THE ISSUES RELATING TO DISALLOWA NCE OUT OF GROWING CHARGES AND TRANSPORTATION CHARGES HAVE ALREADY BEEN DECIDED BY THE TRIBUNAL VIDE ITS ORDER DATED JUNE 20, 2018 PASSED WHILE DISPOSING OF THE APPEAL OF THE REVENUE HOLDING THAT THE DISALLOWANCE SUSTAINED BY THE LD. CIT(APPEALS) OUT OF GROWING CHARGES AND TRANSPORTATION CHARGES WAS FAIR AND REASONABLE AND THERE WAS NO JUSTIFIABLE REASON TO INTERFERE WITH THE SAME. THE SAID CONCLUSION DRAWN BY THE TRIBUNAL SQUARELY COVERS THE ISSUES RAISED BY THE ASSESSEE IN THIS CROSS OBJECTI ON AND ACCORDINGLY FOLLOWING THE SAME, I DISMISS THIS CROSS OBJECTION FILED BY THE ASSESSE E. 6. IN THE RESULT, THE CROSS OBJECTION OF THE ASSESS EE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 25, 2 019. SD/- (P.M. JAGTAP) VICE-PRESIDENT (KZ & HZ) KOLKATA, THE 25 TH DAY OF OCTOBER, 2019 COPIES TO : (1) RAM SAGAR VERMA, 34/7, B.K. PAUL LANE, DUM DUM, KOLKATA-700030 C.O. NO. 124/KOL/2013 (IN ITA NO. 2091/KOL/2013) ASSESSMENT YEAR: 2008-2009 RAM SAGAR VERMA 6 (2) INCOME TAX OFFICER, WARD-42(3), KOLKATA, PODDAR COURT, 4 TH FLOOR, 18, RABINDRA SARANI, KOLKATA-700 001 (3) COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLK ATA, (4) COMMISSIONER OF INCOME TAX, KOLKATA- , KOLKATA; (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.