Shri Meghjibhai Kuverji Khetani, Ahmedabad V. The Income tax Officer,Ward-5(2), Ahmedabad

CO 38/AHD/2012

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2003 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 06-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K
• Keywords: Audit objection; Corroborative evidences; Tax effect; Revenue expenditure
• Section: 40A(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD - , , BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER SL. NO(S) ITA NO & CO NO ASSESSMENT YEAR APPEAL /CO BY : APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 3206 /AHD/2011 2007 - 08 ITO WARD-5(2) AHMEDABAD SHRI MEGHJIBHAI KUVERJI KHETANI PROP.PATEL TOURS & TRAVELS 8, SHROFF CHAMBERS OPP.NAVCHETAN SCHOOL ELLISBRIDGE AHMEDABAD-380 015 (ASSESSEE) PAN : AATPP 3510 F 2. CO NO.38/AHD/12 (IN ITA NO. 3206/AHD/11) 2007 - 08 - ASSESSEE - (CROSS OBJECTOR) - REVENUE - REVENUE BY : SHRI A.K.PANDEY, SR.DR ASSESSEE BY : -NONE- ! / DATE OF HEARING 25/02/2016 '# ! / DATE OF PRONOUNCEMENT 26/02/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THE REVENUE AND THE ASSESSEE HAVE CHALLENGED THE CO MMON ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XV, AHMEDABAD [CIT(A) IN SHORT] DATED 20/10/2011 BY FILING APP EAL (BY REVENUE) FOR ITA NO.3206/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2012 (BY ASSESSEE) ITO VS. SHRI MEGHJIBHAI KUVERJI KHETANI AY 2007-08 - 2 - AY 2007-08 AND CROSS OBJECTIONS BY THE ASSESSEE TH EREOF. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LD.COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE TO THE EXT ENT OF RS.23,989/- OUT OF RS.69,550/- MADE BY THE ASSESSIN G OFFICER U/S.40(A)(IA) OF THE ACT OUT OF ADVERTISEMENT EXPEN SES. 2. THE LD.COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE TO THE EXT ENT OF RS.2,94,423/- OUT OF RS.22,47,623/- MADE BY THE ASS ESSING OFFICER U/S.40(A)(IA) OF THE ACT OUT OF BODY REPAIR S OF BUSES. 3. THE LD.COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.3,42,72 0/- OUT OF SPARE PARTS A/C., BEING EXPENDITURE INCURRED ON PUR CHASE OF A.C. TO BE INSTALLED IN THE LUXURY BUS, TREATING TH E SAME AS REVENUE EXPENDITURE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE UPH ELD THE ORDER OF THE ASSESSING OFFICER. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C OMMISSIONER OF INCOME TAX (A) MAY BE SET-ASIDE AND THAT OF THE ASS ESSING OFFICER BE RESTORED. 2. AT THE OUTSET, IT IS NOTICED THAT THE ASSESSING OFFICER (AO IN SHORT) HAS ASSESSED THE TOTAL INCOME FOR AY 2007-08 AT RS. 70,49,570/-. ITA NO.3206/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2012 (BY ASSESSEE) ITO VS. SHRI MEGHJIBHAI KUVERJI KHETANI AY 2007-08 - 3 - 2.1. AT THE TIME OF HEARING, NONE APPEARED ON BEH ALF OF THE RESPONDENT- ASSESSEE AND NO WRITTEN SUBMISSION IS FILED ON RECO RD. 3. WE HAVE HEARD THE LD.SR.DR AND PERUSED THE MATER IAL PLACED BEFORE US. WE FIND THAT THE PRESENT APPEAL OF THE REVENUE IS NOT MAINTAINABLE IN VIEW OF CBDT CIRCULAR NO. 21/2015 I N F.NO.279/MISC. 142/2007-ITJ (PT) DATED 10TH DECEMBER 2015, VIDE WH ICH IT HAS BEEN PROVIDED THAT IF THE TAX EFFECT BY VIRTUE OF THE CO MMISSIONER OF INCOME- TAX (APPEALS)S ORDER IS BELOW RS. 10 LAKHS, THEN T HAT ORDER WOULD NOT BE CHALLENGED BEFORE THE TRIBUNAL IN FURTHER APPEAL. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (8) OF THE INSTRUCTIO NS WHEREIN IT HAS BEEN PROVIDED THAT THESE INSTRUCTIONS WILL NOT BE APPLIC ABLE, IF VIRES OF ANY PROVISIONS HAS BEEN QUASHED BY IMPUGNED ORDER OR AD DITION WAS MADE ON SOME AUDIT OBJECTIONS OR THE ADDITION RELATES TO UN DISCLOSED FOREIGN ASSETS/BANK ACCOUNTS, ETC. WE FIND THAT THE PRES ENT CASE DOES NOT FALL WITHIN THE EXEMPTION CLAUSE AND THE TAX EFFECT IS L ESS THAN RS. 10 LAKHS. THEREFORE, THE PRESENT APPEAL IS NOT MAINTAINABLE A ND, HENCE, DISMISSED. 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED IN LIMINE. 5. ASSESSEES CROSS OBJECTION NO.38/AHD/2012 FOR AY 2007-08 (ARISING OUT OF ITA NO.3206/AHD/2011 FOR AY 2007-08 -REVENUES APPEAL-SUPRA). THE ASSESSEE HAS RAISED THE FOLLOWIN G COMMON GROUNDS IN ITS CROSS-OBJECTION:- ITA NO.3206/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2012 (BY ASSESSEE) ITO VS. SHRI MEGHJIBHAI KUVERJI KHETANI AY 2007-08 - 4 - 1. THE RESPONDENT SUBMITS THAT THE ID CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 5,41,476/- U/S 40A(3) MADE BY AO ON THE GROUND THAT THERE WAS NO EXCEPTIONAL CIRCUMSTANCE WHICH COULD JUSTIFY CAS H PAYMENTS TO A REPUTED CONCERN VIZ M/S ACQUA WATER SUPPLIES OF GANDHINAGAR . ( GROUND NO.4 OF ID CIT(A). 1.1 THE RESPONDENT SUBMITS THAT THE PAYMENT IS DEDUCTIBLE UNDER CIRCUMSTANCES SPECIFIED IN CLAUSE (K) OF RULE 6DD O F I.T. RULES 1962. AS SUCH THE ADDITION OF RS. 5,41,476/- U/S 40A(3) CONFIRMED BY THE ID CIT(A) BEING ILLEGAL, BE DELETED. 1.2 THE RESPONDENT CONTENDS THAT THE ID CIT(A) HAS NOT APPRECIATED FULLY NOTE (1) OF THE SUBMISSIONS FILED WITH THE ID CIT(A ), IN THIS RESPECT. 2. THE RESPONDENT SUBMITS THAT HE I D CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,16,863/- U/S 40(A)(IA) MA DE BY THE AO ON THE GROUND THAT IT WAS NOT BACKED BY ANY PROOF TO SAY THE LEAS T NOT EVEN THE LEDGER ACCOUNT COPIES OF THE ADVOCATES. (GROUND NO. 5 OF ID CIT(A) . 2.1 THE RESPONDENT CONTENDS THAT THE ID CIT(A) HAS NOT APPRECIATED FULLY NOTE(2) OF THE SUBMISSIONS FILED WITH THE CIT(A) IN THIS RESPECT. 3. THE RESPONDENT SUBMITS THAT THE ID CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 9,600/- U/S 64 MADE BY THE AO ON THE GROUND THAT THE TECHNICAL OR PROFESSIONAL QUALIFICATION OF THE SPOU SE HAS NOT BEEN ESTABLISHED. GROUND NO.11 OF ID CIT(A). 3.1 THE RESPONDENT CONTENDS THAT THE ID CIT(A) HAS NOT APPRECIATED FULLY NOTE (8) OF THE SUBMISSIONS FILED WITH THE ID CIT(A ) IN THIS RESPECT. 4. THE RESPONDENT SUBMITS THAT THE ID CIT(A) HAS ERRED IN CONFIRMING THE LUMP-SUM DISALLOWANCE OF RS. 50,000/- MADE BY THE A O OUT OF SMALL EXPENSES ON THE GROUND THAT EVEN AUDIT REPORT HAS MENTIONED THAT SUPPORTING EVIDENCE OF ENTIRE EXPENSES ARE NOT AVAILABLE.( GROUND NO. 1 2 OF ID CIT(A). ITA NO.3206/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2012 (BY ASSESSEE) ITO VS. SHRI MEGHJIBHAI KUVERJI KHETANI AY 2007-08 - 5 - 4.1 THE RESPONDENT CONTENDS THAT THE ID CIT(A) HAS NOT APPRECIATED FULLY NOTE (9) OF THE SUBMISSIONS FILED WITH THE ID CIT(A ) IN THIS RESPECT. 5. THE RESPONDENT SUBMITS THAT THE ID CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 6,26,761/- U/S36(1)(III) MADE B Y AO ON THE GROUND THAT THE ARGUMENT OF THE AO THAT THE WITHDRAWALS WERE MADE F ROM INTEREST BEARING FUNDS FOR PAYMENT OF HOUSING LOAN WHICH IS A CAPITA L ASSET HAS NOT BEEN REFUTED WITH EVIDENCE BY THE RESPONDENT. ( GROUND NO. 13 OF LD CIT(A). 5.1 THE RESPONDENT CONTENTS THAT THE ID C1T(A) HAS NOT APPRECIATED FULLY NOTE (10) OF THE SUBMISSIONS FILED WITH THE ID CIT( A) IN THIS RESPECT. 6. THE RESPONDENT SUBMITS THAT THE LD C1T(A ) HAS DELETED THE FOLLOWING ADDITIONS/DISALLOWANCES ON THE BASIS OF EVIDENCES F ILED BY THE RESPONDENT WHICH WERE VALID IN LAW AND AS SUCH NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD.CIT(A):- (I) RS. 69,550/- - RS. 23,989/- = RS. 45,5 61/- DELETED (GROUND NO.6U/S (40(A)(IA). (II) RS. 22,47 ,623/- - RS. 2,94,423/- = 19, 53,200/- DELETED.(GROUND NO.7 U/S 40(A)(IA)). (III) RS. 3,42,720/- DELETED.(GROUND NO.8)( REP LACEMENT OF OLD A.C). 6.1. SINCE WE HAVE DISMISSED THE REVENUES APPEAL I N ITA NO.3206/AHD/2011 FOR AY 2007-08, AS NOT MAINTAINABL E, THEREFORE CROSS OBJECTION FILED BY THE ASSESSEE OUT OF REVENUES AP PEAL IS ALSO DISMISSED AS NOT MAINTAINABLE. HOWEVER, ASSESSEE WOULD BE AT LIBERTY TO FILE AN APPEAL AGAINST THE ORDER OF THE LD.CIT(A), IF SO AD VISED. ITA NO.3206/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2012 (BY ASSESSEE) ITO VS. SHRI MEGHJIBHAI KUVERJI KHETANI AY 2007-08 - 6 - 7. IN THE RESULT, REVENUES APPEAL AS WELL AS ASSES SEES CROSS OBJECTION BOTH ARE DISMISSED AS NOT MAINTAINABLE. ORDER PRONOUNCED IN THE COURT ON 26 TH FEBRUARY, 2016 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( MANISH BORAD ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 26/ 02 /2016 )!.., .../ T.C. NAIR, SR. PS !'#'$ / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1123 4 / CONCERNED CIT 4. 4 ( +, ) / THE CIT(A)-XV, AHMEDABAD 5. 56 /23 , +,! +23# , + / DR, ITAT, AHMEDABAD 6. 689 : / GUARD FILE. / BY ORDER, 05, / //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 25.2.16(COVERED MATTER -BEL OW 10 LACS) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25.2.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 26.2.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 26.2.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER