N.K.Ahamed, CHENNAI V. ITO, CHENNAI

CO 35/CHNY/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7364 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-07-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: C S SEETHARAMAN
• Keywords: Capital expenditure

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 167/MDS/2011 ASSESSMENT YEAR : 2007 08 & C.O.NO. 35/MDS/2011 [IN I.T.A. NO. 167/MDS/2011] THE INCOME TAX OFFICER, B.W. VII(1) CHENNAI 600 034. VS. M/S. N.K. AHAMED, NO. 73-77, DR. NATESAN ROAD, TRIPLICANE, CHENNAI 600 005. [PAN: AAAFN3426B] (APPELLANT) (RESPONDENT/CROSS OBJECTOR) REVENUE BY : SHRI SHAJI P. JACOB, ADDL. CIT ASSESSEE BY : SHRI C.S. SEETHARAMAN, C.A. DATE OF HEARING : 12.07.2012 DATE OF PRONOUNCEMENT : 26.07.2012 ORDER PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AND CROSS O BJECTION BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS) IX, CHENNAI DATED 09.11.2010 IN ITA NO. 69/09-10 FO R THE ASSESSMENT YEAR 2007-08. SHRI SHAJI P. JACOB, ADDL. CIT REPRESENTED ON BEHALF OF THE REVENUE AND SHRI C.S. SEETHARAMAN, C.A. REPRESENTED ON BEHALF OF THE ASSESSEE. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.167 167167 167/M/ /M/ /M/ /M/11 & 11 & 11 & 11 & C.O. NO. 35/M/11 C.O. NO. 35/M/11 C.O. NO. 35/M/11 C.O. NO. 35/M/11 2 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (A PPEALS) IS OPPOSED TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) ERRED IN DELETING THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A) (IA) TOWARDS NON DEDUCTION OF TAX ON FREIGHT CHARGES EXCEEDING ` . 20,000/-. 2.1 THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE LEDGER ACCOUNT EXTRACTS BASED ON WHICH THE RELIEF WAS GIVEN TO THE ASSESSEE WERE FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND EXA MINED BY THE ASSESSING OFFICER. 2.2 THE LD. CIT(A) FAILED TO APPRECIATE THAT THE D ISALLOWANCE WAS MADE ON THE BASIS OF BANK ACCOUNT STATEMENTS ONLY IN THO SE CASES WHERE THE PAYMENTS EXCEEDED ` . 20,000/-. 3. THE ID. CIT(A) ERRED IN DELETING THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER UNDER SECTION 40 (A) (IA) ON ACCO UNT OF NON DEDUCTION OF TAX ON COMMISSION PAYMENTS. 3.1 THE LD. CIT(A) ERRED IN OBSERVING THAT SINCE T HE COMMISSION PAYMENTS DID NOT EXCEED ` . 10,000/- THE PROVISIONS OF SECTION 194H WOULD NOT APPLY. 3.2 THE LD. CIT(A) FAILED TO APPRECIATE THAT THE L IMIT PRESCRIBED IN SECTION 194H FOR THE ASSESSMENT YEAR 2007-08 WAS ` . 2,500/- AND THE DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER ONLY BECAUSE THE ASSESSEE DID NOT COMPLY WITH THE PROVISIONS OF SECTION 194H. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) MAY BE SET ASIDE AND THAT OF ASSESSING OF FICER RESTORED. 3. THE ASSESSEE RAISED FOLLOWING GROUNDS IN THE CR OSS OBJECTIONS: 1. IT IS SUBMITTED THAT THE ASSESSING OFFICER ERR ED IN PARTLY DISALLOWING THE SHED MAINTENANCE EXPENSES AND MESS EXPENSES AND LORRY EXPENSES AND 50% OF PRINTING & STATIONERY EXPENSES AND THE ( IT APPEALS IN CONFIRMING THE SAME. 2. IT IS SUBMITTED THAT CLAIM OF ` .13,58,652/- TOWARDS SHED MAINTENANCE EXPENSES WAS MADE. HOWEVER, THE ASSESSING OFFICER H AS ALLOWED A SUM OF ` .3,00,000/- ONLY AND BALANCE IS TREATED AS CAPITAL EXPENDITURE. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.167 167167 167/M/ /M/ /M/ /M/11 & 11 & 11 & 11 & C.O. NO. 35/M/11 C.O. NO. 35/M/11 C.O. NO. 35/M/11 C.O. NO. 35/M/11 3 3. IT IS SUBMITTED THAT EXPENDITURE CLAIMED UNDER THE HEAD 'SHED MAINTENANCE' RELATES TO REPAIRING THE SHED DURING T HE YEAR. SHED WHICH IS A TEMPORARY STRUCTURE COLLAPSED DURING THE RAINY SEASON. YOUR PETITIONER HAD PUT THE SAME AND THE TOTAL EXPENDITU RE INCURRED IS REVENUE IN NATURE. 4. IT IS SUBMITTED THAT EXPENSES INCURRED IN REPLA CING THE OLD STRUCTURE. 5. IT IS SUBMITTED THAT THE RESPONDENT PROVIDES ME ALS TO STAFF AND THE EXPENSES ARE SUPPORTED BY BILLS AND VOUCHERS. 6. IT IS SUBMITTED THAT PRINTING AND STATIONERY IS SUPPORTED BY BILLS AND VOUCHERS AND EXPENSES CLAIMED BY YOU PETITIONER IS ` .79,380/- ONLY. THE LEARNED ASSESSING OFFICER, HAS BY OVERSIGHT TAK EN THE TELEPHONE EXPENSES CLAIMED ` .3,90,242/- AND DISALLOWED 50% OF THE SAME. 4. AT THE TIME OF HEARING, THE COUNSEL FOR THE RE VENUE SUBMITTED THAT THE ASSESSEE HAS PRODUCED VARIOUS INFORMATION IN THE FO RM OF LEDGER EXTRACT, DETAILS OF FREIGHT PAYMENTS, ETC., FOR THE FIRST TI ME BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND THIS INFORMATION, WHICH WA S PRODUCED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT PRODUC ED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS IN SUPPORT OF ITS CLAIMS. THE COUNSEL FOR THE REVENUE ALSO SUB MITTED THAT THE ASSESSEE HAS PRODUCED CERTAIN INFORMATION BEFORE THIS TRIBU NAL, WHICH WAS NOT PRODUCED BEFORE THE COMMISSIONER OF INCOME TAX (APP EALS) AND THE ASSESSING OFFICER. THE COUNSEL FOR THE REVENUE SUBM ITTED THAT IN THE INTEREST OF JUSTICE, THE MATTER MAY BE REMITTED BAC K TO THE ASSESSING OFFICER FOR VERIFICATION OF THE DETAILS AND INFORMATION FUR NISHED BY THE ASSESSEE, WHICH WERE NOT FURNISHED BEFORE THE ASSESSING OFFIC ER AND FURNISHED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) FOR THE FI RST TIME. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.167 167167 167/M/ /M/ /M/ /M/11 & 11 & 11 & 11 & C.O. NO. 35/M/11 C.O. NO. 35/M/11 C.O. NO. 35/M/11 C.O. NO. 35/M/11 4 5. THE COUNSEL FOR THE ASSESSEE HAS NO OBJECTION F OR REMITTING THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIF ICATION OF THE INFORMATION IN SUPPORT OF ITS VARIOUS CLAIMS RAISED IN THE GROUNDS OF APPEAL. 6. IN THE CROSS OBJECTION FILED BY THE ASSESSEE, I T WAS SUBMITTED THAT THE ASSESSING OFFICER HAS NOT GIVEN OPPORTUNITY TO EXPL AIN ITS STAND ON CERTAIN ISSUES. AS THE GROUNDS RAISED BY THE REVENUE AND AL SO THE GROUNDS RAISED BY THE ASSESSEE IN THE CROSS OBJECTION ARE INTERCON NECTED, WE FEEL IT NECESSARY THAT BOTH APPEAL OF THE REVENUE AS WELL A S CROSS OBJECTION OF THE ASSESSEE SHOULD GO BACK TO THE ASSESSING OFFICER FO R ADJUDICATION OF THE ISSUES AFRESH. THE ASSESSING OFFICER SHALL DECIDE T HE ISSUE AFRESH IN ACCORDANCE WITH LAW BY PROVIDING ADEQUATE OPPORTUNI TY TO THE ASSESSEE OF BEING HEARD. 7. IN THE RESULT, BOTH APPEAL OF THE REVENUE AND T HE CROSS OBJECTION OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THURSDAY, THE 26 TH OF JULY, 2012 AT CHENNAI. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER CHENNAI, DATED, THE 26.07.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.