Ratnadeep Metal & Tubes Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-5(3), Ahmedabad

ITA 1008/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0199 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 27-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 17-03-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Assessee Lawyers: KEDAR LADDHA
• Keywords: Gift; Depreciation; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM) ITA NO.1008/AHD/2008 A. Y.: 2005-06 RATNADEEP METAL & TUBES PVT. LTD., 401, SAI PRASAD APARTMENT, NR. DARPAN ACADEMY, USMANPURA, AHMEDABAD 380 013 VS THE INCOME TAX OFFICER, WARD -5 (3), AHMEDABAD PA NO. AACCR 1616C (APPELLANT) (RESPONDENT) APPELLANT BY SHRI KEDAR LADDHA, AR RESPONDENT BY SHRI K. M. MAHESH, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XI, AHMEDABAD DATED 31-01-2008 FOR ASSESSMENT YEAR 2005-06 ON THE FOLLOWING EFFECTIVE GROUNDS: 1. THE LEARNED CIT (A), RANGE- XI, AHMEDABAD ERRE D IN LAW BY CONSIDERING THE ASSESSMENT ORDER AND MADE DISALLOWANCE OF RS.2,01,400/- IN RESPECT OF SALES PROMOTION EXPENSES ON THE GROUND THAT IT IS NOT INC URRED FOR THE PURPOSE OF BUSINESS. 2. THE LEARNED CIT (A), RANGE- XI, AHMEDABAD HAS E RRED BY ARGUED THAT EXCESS DEPRECIATION CLAIMED BY RS.7001/- WHICH HAD ALREADY CONSIDERED BY THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT U/S 143(3). 2. BRIEFLY, THE FACTS OF THE CASE ON THE ABOVE GROUNDS ARE THAT THE AO MADE DISALLOWANCE OF RS.2,01,400/- IN RESPECT OF SA LES PROMOTION EXPENSES TOWARDS PURCHASE OF SILVER ARTICLES. THE A SSESSEE DID NOT APPEAR BEFORE THE LEARNED CIT(A) AND NO NOTICES WERE COMPL IED WITH. THE LEARNED CIT(A) ACCORDINGLY DECIDED THE APPEAL EX-PARTE IN T HE ABSENCE OF THE ASSESSEE BY EXAMINING THE MATERIALS ON RECORD. THE LEARNED CIT(A) NOTED ITA NO.1008/AHD/2008 RATNADEEP METAL & TUBES PVT. LTD. VS. CIT, RANGE-1 2 THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS NEI THER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOR AT THE APPELLATE STAG E THAT THE GIFTS WERE GIVEN ON SUCCESSFUL LAUNCH OF ITS MANUFACTURING ACT IVITIES. THE LEARNED CIT(A), THEREFORE, NOTED THAT THE ASSESSEE HAS NOT DISCHARGED ITS ONUS WITH REGARD TO THE ABOVE GROUND. THE LEARNED CIT(A) IN THE ABSENCE OF MATERIAL ON RECORD DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. ON GROUND NO.2, THE LEARNED CIT(A) NOTED THAT ADDITION OF RS.7,001/- WAS MADE ON ACCOUNT OF EXCESS DEPRECIATION ON WHICH THE ASSESSEE SUBMITTED THAT DUE TO MISTAKE, EXCESS CLAIM OF DEPRECIATION W AS MADE. THE ASSESSEE HAD NO OBJECTION TO THIS ADDITION. THE LEA RNED CIT(A), THEREFORE, DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE ALS O. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS INCREASED THE PRODUCTION BY INSTALLING NEW PLAN T AND ON SUCCESSFUL COMMISSIONING OF NEW PLANT, THE ASSESSEE INVITED RE PUTED CLIENTS AND DISTRIBUTED GOLD CHAINS AND SILVER ARTICLES FOR WHI CH DETAILS WERE FILED. HE HAS SUBMITTED THAT THE AMOUNTS SPENT THEREOF ON ACC OUNT OF SALE PROMOTION EXPENSES TOWARDS PURCHASE OF SILVER ARTIC LES WHICH IS CONNECTED WITH THE BUSINESS ACTIVITIES OF THE ASSES SEE, THEREFORE, ADDITION SHOULD BE DELETED. COPIES OF THE BILLS ARE FILED AL ONG WITH WRITTEN SUBMISSION. HE DID NOT ARGUE ON GROUND NO.2. THE LE ARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. THE ASSESSEE MADE A CLAIM BEFORE THE AUT HORITIES BELOW THAT EXPENSES WERE INCURRED FOR SALES PROMOTION ACTIVITI ES TO THEIR CUSTOMERS ON SUCCESSFUL LAUNCH OF VARIOUS PRODUCTS. THE AO HO WEVER, NOTED THAT THE GIFT ARTICLES HAVE BEEN PURCHASED IN THE FIRST AND SECOND WEEK OF JANUARY, 2005 WHICH WAS VERIFIABLE FROM THE BILLS A ND DETAILS OF SALES PROMOTION EXPENSES. THE ASSESSEE, HOWEVER, COULD NO T SUBSTANTIATE ITS CONTENTION THAT THE GIFT ARTICLES WERE GIVEN ON SUC CESSFUL LAUNCH OF ITS ITA NO.1008/AHD/2008 RATNADEEP METAL & TUBES PVT. LTD. VS. CIT, RANGE-1 3 MANUFACTURING ACTIVITIES. THE AO ALSO NOTED THAT TH E ASSESSEE HAS FAILED TO GIVE THE NAMES AND ADDRESSES OF THE PARTIES TO W HOM GIFTS HAVE BEEN GIVEN. THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE BE FORE THE LEARNED CIT(A) AND EVEN IN THE WRITTEN SUBMISSION ALSO NO S UCH SPECIFIC MATERIAL HAS BEEN FILED. THE ASSESSEE CLAIMED DEDUCTION OF T HE EXPENDITURE; THEREFORE, BURDEN IS UPON THE ASSESSEE TO PROVE THA T THE EXPENDITURE HAD BEEN LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOS E OF BUSINESS. HOWEVER, IN THIS CASE, THE ASSESSEE HAS NOT DISCHAR GED THE ONUS TO PROVE THAT THE EXPENSES WERE INCURRED FOR THE PURPOSE OF BUSINESS. IN THE ABSENCE OF ANY EVIDENCE TO SUPPORT THE CONTENTION O F THE ASSESSEE, WE DO NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE. GROU ND NO.1 OF THE APPEAL OF THE ASSESSEE IS, THEREFORE, LIABLE TO BE DISMISSED. ON GROUND NO.2, THE ASSESSEE ADMITTED TO THE PROPOSED ADDITION BEFORE T HE AO WHICH IS ALSO NOT ARGUED BY THE LEARNED COUNSEL FOR THE ASSESSEE. THEREFORE, GROUND NO.2 OF THE APPEAL OF THE ASSESSEE HAS NO MERIT. TH E SAME IS ALSO DISMISSED. 5. AS A RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED ON 06-08-2010. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 06-0 8-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD