Shri Hitendrasinh Gambhirsinh Zala, Bhavnagar V. The Income Tax Officer, Ward-1(2), Bhavnagar

CO 22/AHD/2015

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3111 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 02-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Corroborative evidences; Tax effect
• Section: 143(3); 133(6)

Judgement Text

ITA NO. 46 & CO 22/AHD/2015 ASSESSEE- SHRI HITENDRASINH GAMBHIRSINH ZALA ASSESSMENT YEAR: 2010-11 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM] ITA NO.46/AHD/2015 & CO NO.22/AHD/2015 ASSESSMENT YEAR: 2010-11 THE INCOME-TAX OFFICER ..................AP PELLANT WARD 1(2), BHAVNAGAR VS. SHRI HITENDRASINH GAMBHIRSINH ZALA ........................RESPONDENT & 29, GROUND FLOOR, MADHAV HILL, CROSS-OBJECTOR WAGHAWADI ROAD, DIST. BHAVNAGAR [PAN : AAFPZ 8349 A] APPEARANCES BY: MUDIT NAGPAL FOR THE APPELLANT URVASHI SHODHAN FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 21.09.2017 DATE OF PRONOUNCING THE ORDER : 22.09.2017 O R D E R PER PRAMOD KUMAR AM: 1. THIS APPEAL BY THE REVENUE AND THE CROSS-OBJECTI ON THEREOF BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 16.10.2014 PAS SED BY THE CIT(A)-XX, AHMEDABAD IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2010-11. 2. THE GRIEVANCES RAISED BY THE ASSESSING OFFICER A RE AS FOLLOWS:- 1. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING TH E FACT THAT THE DISALLOWANCE OF RS. 72,000/- MADE ON ACCOUNT OF DIESEL & FUEL EX PENSES WAS IN THE ABSENCE OF SUPPORTING EVIDENCES LIKE VOUCHERS AND I NVOICES. 2. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE DISALLOWANCE OF RS. 17,500/- MADE ON ACCOUNT OF REPAIRS AND MAIN TENANCE EXPENSES WAS IN THE ABSENCE OF SUPPORTING EVIDENCES LIKE VOUCHERS A ND INVOICES. 3. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING TH E FACT THAT THE DISALLOWANCE OF RS. 2,94,000/- MADE ON ACCOUNT OF SALARIES TO SU PERVISORY STAFF WAS IN THE ABSENCE OF SUPPORTING EVIDENCES LIKE VOUCHERS AND I NVOICES. ITA NO. 46 & CO 22/AHD/2015 ASSESSEE- SHRI HITENDRASINH GAMBHIRSINH ZALA ASSESSMENT YEAR: 2010-11 PAGE 2 OF 4 4. THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE FACTUAL MATRIX REGARDING DISALLOWANCE OF RS. 21,88,240/- MADE ON ACCOUNT OF LABOUR EXPENSES, WHEREIN ALL THE NOTICES ISSUED U/S. 133(6) WERE RET URNED BACK AND WITH REGARD TO LABOUR CHARGES REMAINING PAYABLE, NO EXPLANATION HAD BEEN SUBMITTED. 3. SO FAR AS THE APPEAL OF THE REVENUE IS CONCERNED , THE TAX EFFECT INVOLVED IN THIS APPEAL IS LESS THAN THE LIMIT PRESCRIBED BY TH E CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015. THEREFORE, THE APPEAL OF THE REV ENUE IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE AFORESAID CBDT CIRCULAR. THE APPEAL OF THE REVENUE IS THUS DISMISSED. 4. WE NOW TAKE UP THE CROSS-OBJECTIONS FILED BY THE ASSESSEE. 5. IN THE FIRST GROUND OF CROSS-OBJECTION, THE ASSE SSEE HAS RAISED THE FOLLOWING GRIEVANCE: LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMIN G DISALLOWANCE MADE BY AO OF DEPRECIATION OF RS.1,57,500/- IN RESPECT OF HOT MIX PLANT ASSEMBLED AND FULL PAYMENT MADE DURING THE YEAR UNDER CONSIDERATION. L D. CIT (A) OUGHT TO HAVE DELETED DISALLOWANCE OF DEPRECIATION CLAIMED ON THE BASIS OF TAX AUDIT REPORT CERTIFYING ALLOWABILITY OF THE SAME. IT BE SO HELD NOW. 6. THIS DEPRECIATION WAS DECLINED TO THE ASSESSEE A S THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE FOR DELIVERY OF THE MACHINE IN THE RELEVANT PREVIOUS YEAR, WHEREAS THE ACCOUNTS SHOWED THAT LAST BILL IN THIS RESPECT WAS ON 03.07.2010 WHICH ESSENTIALLY INDICATES THAT DELIVERY MUST HAVE BEEN TAKEN AFTER THIS BILL WAS RAISED. THE ASSESSEE COULD NOT PRODUCE, BEFORE THE AO AS AL SO THE CIT(A), ANY EVIDENCE IN SUPPORT OF THE CLAIM OF DELIVERY OF MACHINERY IN TH E RELEVANT PREVIOUS YEAR. THERE IS NO CHANGE IN THE SITUATION IN THE PROCEEDINGS BEFOR E US. IN THE ABSENCE OF ANY EVIDENCE, OR ANY SUPPORT, FOR THE CLAIM OF THE ASSE T HAVING BEEN BROUGHT TO THE ASSESSEES PREMISES, WE CONFIRM THE STAND OF THE AU THORITIES BELOW AND DECLINE TO INTERFERE IN THE MATTER. 7. GROUND NO. 1 IS THUS DISMISSED. 8. IN GROUND NO. 2, THE ASSESSEE HAS RAISED THE FOL LOWING GRIEVANCE: LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMIN G DISALLOWANCE OF CARTING EXPENSE OF RS.80,000/- FOR NON DEDUCTION OF TAX U/S 40(A)(IA) OF THE ACT. LD. CIT (A) OUGHT TO HAVE DELETED DISALLOWANCE OF EXPEN SE. IT BE SO HELD NOW. 9. NO SPECIFIC ARGUMENTS WERE ADVANCED IN SUPPORT O F THIS GRIEVANCE. THE AMOUNT IN DISPUTE IS ALSO VERY SMALL. WE TREAT THIS GRIEVANCE AS NOT PRESSED, ON ACCOUNT OF SMALLNESS OF AMOUNT, AND DISMISS IT AS S UCH. 10. GROUND NO. 2 IS ALSO DISMISSED. ITA NO. 46 & CO 22/AHD/2015 ASSESSEE- SHRI HITENDRASINH GAMBHIRSINH ZALA ASSESSMENT YEAR: 2010-11 PAGE 3 OF 4 11. IN GROUND NO. 3, THE ASSESSEE HAS RAISED THE FO LLOWING GRIEVANCE:- 3. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONF IRMING LUMPSUM DISALLOWANCE OF RS. 20,000/- OUT OF DIESEL & FUEL EXPENSES, RS. 5,000/- OUT OF REPAIRS & MAINTENANCE EXPENSES, RS. 50,000/- OUT OF SALARIES TO SUPERVISORY STAFF & RS.5,00,0000/- OUT OF LABOUR CHARGES WITHOUT ANY CO GENT REASONS. LD. CIT (A) DESPITE HOLDING THE CLAIM OF THE APPELLANT GENUINE CONFIRMED LUMPSUM DISALLOWANCE OF LEGITIMATE BUSINESS EXPENSE. LD. CI T(A) OUGHT TO HAVE DELETED DISALLOWANCE OF VARIOUS EXPENSES IN TOTO. I T BE SO HELD NOW. 12. LEARNED COUNSEL POINTS OUT THAT THE CIT(A) HAS PARTLY CONFIRMED THESE DISALLOWANCES BY FOLLOWING HIS PREDECESSORS ORDER IN THE CASE OF PD DESAI & CO. IT IS SO SPECIFICALLY NOTED AT PAGE 36 OF THE APPELLAT E ORDER, AND THE CIT(A) HAS ALSO OBSERVED THAT THE DISCREPANCIES FOUND IN THE INSTA NT CASE ARE ALMOST SIMILAR TO OTHER ASSESSEE ENGAGED IN THIS CONTRACT BUSINESS AND THE SAME WERE ALSO NOTICED IN THE CASE OF P D CONSTRUCTION CO. THIS DECISION IN P D DESAIS CASE, HOWEVER, HAS BEEN DISAPPROVED BY A CO-ORDINATE BENCH OF THIS TRIBUNAL VIDE ORDER DATED 4 TH FEBRUARY 2016, AND LEARNED COUNSEL FOR THE ASSESSEE HAS FILE D A COPY OF THE SAID DECISION. ON THE BASIS OF THIS REASONING, LEARNED COUNSEL FOR TH E ASSESSEE URGES US TO DELETE THE IMPUGNED DISALLOWANCES AS WELL. LEARNED DEPARTMENTA L REPRESENTATIVE DOES NOT DISPUTE THE FACTS EMBEDDED IN THE ARGUMENTS OF THE ASSESSEE BUT RELIES ON THE STAND OF THE CIT(A) NEVERTHELESS. 13. IN VIEW OF THE ABOVE DISCUSSIONS, AND RESPECTFU LLY FOLLOWING THE ESTEEMED VIEWS OF THE COORDINATE BENCH, WE UPHOLD THE PLEA O F THE ASSESSEE. THE IMPUGNED DISALLOWANCES MUST ACCORDINGLY STAND DELETED. WE DI RECT SO. 14. GROUND NO. 3 IS THUS ALLOWED. 15. IN THE RESULT, THE CROSS-OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED. 16. TO SUM UP WHILE APPEAL OF THE ASSESSING OFFICER IS DISMISSED, THE CROSS- OBJECTION OF THE ASSESSEE IS PARTY ALLOWED. PRONOUN CED IN THE OPEN COURT TODAY ON THE 22 ND DAY OF SEPTEMBER, 2017 SD/- SD/- RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 22 ND DAY OF SEPTEMBER, 2017 **BT ITA NO. 46 & CO 22/AHD/2015 ASSESSEE- SHRI HITENDRASINH GAMBHIRSINH ZALA ASSESSMENT YEAR: 2010-11 PAGE 4 OF 4 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ......22.09.2017...AS PREPAR ED BY HONBLE AM ON HIS PC.... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: ... 22.09.2017........ 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: 22.09.2017....... . 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: .. 22.09.2017....... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : .. 25.09.2017.... 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: ..