The ITO, Ward-12(3), Ahmedabad V. Smt. Nimaben Amitkumar Joshi, Ahmedabad

ITA 1027/AHD/2010

• Counselvise Citation: 102720514 RSA 2010
• Duration Of Justice: 2 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 05-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: WRITTEN SUBMISSIONS
• Keywords: Unexplained expenditure; Depreciation

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ %& %& %& %& , , , , &' ( & &' ( & &' ( & &' ( & ' ' ' ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND TEJ RAM MEENA, ACCOUNTANT MEMBER) ITA NO.1027/AHD/2010 [ASSTT.YEAR : 2007-2008] ITO, WARD-12(3) AHMEDABAD. /VS. SMT. NIMABEN AMITKUMAR JOSHI PROP. OF SHARDA SALES AGENCY 205, JIVAN RATH APARTMENT LAXMINARAYAN CROSS ROAD MANINAGAR (EAST) AHMEDABAD 380 008. PAN : AECPJ 3781 K ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / &/ REVENUE BY : SHRI Y.P.VERMA 1% . / &/ ASSESSEE BY : WRITTEN SUBMISSIONS. 2 . %3'/ DATE OF HEARING : 6 TH NOVEMBER, 2012 456 . %3'/ DATE OF PRONOUNCEMENT : 07-12-2012 &7 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2007-2008 IS DIRECT ED AGAINST THE ORDER OF THE CIT(A)-XX, AHMEDABAD DATED 25.01.2010 . ITA NO.1027/AHD/2010 -2 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE REVENUE IS BEING DIS POSED OF EX PARTE QUA THE ASSESSEE-RESPONDENT ON MERIT AFTER HEARING THE LEARNED DR AND CONSIDERING THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE. 3. THE GROUND NO.1 OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.6,66,000/- MADE BY THE AO ON ACC OUNT OF UNEXPLAINED EXPENDITURE, WITHOUT PROPERLY APPRECIAT ING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECOR D BY THE AO. 1.2 IN DOING SO, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ASSESSEE COULD NOT EXP LAIN THE SOURCE OF PAYMENT BY WAY OF DD OF RS.6.66 LACS MADE TO MOTHER DAIRY. 4. THE LEARNED DR REFERRED TO PARA 6 AND 6.1 OF THE ASSESSMENT ORDER IN SUPPORT OF THE CASE OF THE REVENUE. HE SU BMITTED THAT ON VERIFICATION OF CASH BOOK AND STATEMENT OF PURCHASE FROM MOTHER DAIRY AND ALSO THE STATEMENT OF BANK, IT IS CLEAR T HAT THE ASSESSEE HAS MADE PURCHASE OF RS.3,77,61,522/- FROM MOTHER DAIRY AS AGAINST THIS ASSESSEE HAS MADE PAYMENT OF RS.3,84,27,969/- WHICH ALSO INCLUDES THE PAYMENT OF RS.30.39 LAKHS BY PAY ORDER FROM BHU J MERCANTILE COOPERATIVE BANK DURING THE YEAR TO THE MOTHER DAIR Y. HE SUBMITTED THAT THE ASSESSEE COULD NOT ESTABLISH THE CORRECTNE SS OF ITS EXPLANATION THAT THE PAY ORDER WAS MADE OUT OF THE CASH BALANCE AVAILABLE IN THE CASH BOOK. HE RELIED ON THE ORDER OF THE AO. 5. THE ASSESSEE IN THE WRITTEN SUBMISSIONS FILED BE FORE US HAS SUBMITTED THAT THERE IS NO BASIS OR EVIDENCE FOR MA KING THE IMPUGNED ADDITION. THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PRODUCED ALL ITA NO.1027/AHD/2010 -3 THE EVIDENCES AND DETAILS INCLUDING THE BANK STATEM ENT AND THE SAME WERE NEVER REJECTED BY THE AO. THE ASSESSEE HAS SU BMITTED THAT IT WAS HAVING SUFFICIENT AMOUNT WHICH WAS DEPOSITED WITH T HE SAID BANK FOR PREPARING THE PAY ORDER. THE ASSESSEE HAS RELIED O N THE ORDER OF THE CIT(A). 6. WE HAVE CONSIDERED SUBMISSIONS OF THE LEARNED DR AND HAVE CONSIDERED THE CONTENTS OF THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. WE FIND THAT THE AO HAS NOT RECORDED A S PECIFIC FINDING REGARDING REJECTION OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE CIT(A) HAS RECORDED THAT HE FOUND NO DISPARITY IN T HE STATEMENT FILED BY THE ASSESSEE AND THAT THE AO COULD NOT PROVE THA T THE AMOUNT OF RS.30.39 LAKHS WAS PAID BY THE ASSESSEE BY WAY OF P AY ORDER BROUGHT FROM THE SAID BANK. THE CIT(A) HAS RECORDED THAT I N THE ABSENCE OF ANY SPECIFIC FINDING THAT THE AMOUNT OF PAY ORDER R EPRESENTS THE MONEY OF THE ASSESSEE, THE AOS CONTENTION COULD NO T BE ACCEPTED. THE CIT(A) HAS FURTHER RECORDED THAT IT IS NOTICED FROM THE ASSESSMENT ORDER THAT THE ASSESSEE SUBMITTED ALL THE DOCUMENTS AND THE DETAILS CALLED FOR AND WERE NOT REJECTED BY THE AO. THE CI T(A) HAS FURTHER RECORDED THAT THE BUSINESS OF THE ASSESSEE IS DISTR IBUTION OF MILK PURCHASED FROM MOTHER DAIRY AND THE PAYMENT RECEIVE D TOWARDS DISTRIBUTION OF MILK ARE AS PER PRACTICE DEPOSITED ON THE SAME DAY. THE FINDING OF THE CIT(A) IS THAT THE ADDITION MADE IS NOT BASED ON PROPER APPRECIATION AND VERIFICATION OF THE FACTS. WE FIND THAT IN THE ABSENCE OF ANY MATERIAL PRODUCED BEFORE US TO CONTR OVERT THE FINDING OF THE CIT(A), NO INTERFERENCE IN THE ORDER OF THE CIT(A) WOULD BE JUSTIFIED, AND ACCORDINGLY THE ORDER OF THE CIT(A) ON THIS ISSUE IS ITA NO.1027/AHD/2010 -4 CONFIRMED AND THE GROUND NO.1 AND 1.2 OF THE REVENU ES APPEAL IS DISMISSED. 7. THE GROUND NO.2 OF THE REVENUE IS AS UNDER: 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF EXCESS DEPRECIATION OF RS.86,42 3/- WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE AO. 2.1 IN DOING SO, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE TRUCK WAS NOT BEING UT ILISED FOR THE WHOLE DAY OF THE ASSESSEES BUSINESS. 8. THE LEARNED DR SUBMITTED THAT THE ASSESSEE HAS C LAIMED EXCESS DEPRECIATION AS THE TRUCK WAS NOT BEING USED FOR WH OLE DAY FOR THE ASSESSEES BUSINESS. HE SUBMITTED THAT THE EXCESS DEPRECIATION WAS CORRECTLY DISALLOWED BY THE AO. HE RELIED ON THE O RDER OF THE AO. THE LEARNED COUNSEL FOR THE ASSESSEE IN ITS WRITTEN SUBMISSIONS HAS SUBMITTED THAT IT HAS USED VEHICLE EVERY DAY AND AF TER COMPLETING THE DISTRIBUTION OF MILK BY 10O CLOCK, SHE USED TO GIV E VEHICLE ON HIRE TO MOTHER DAIRY AND EARNED RS.2,34,361/- AS INCOME, AN D THEREFORE SHE IS ENTITLED TO EXCESS DEPRECIATION ON VEHICLE. HE RELIED ON THE ORDER OF THE CIT(A). 9. WE HAVE CONSIDERED SUBMISSIONS OF THE LEARNED DR AND HAVE CONSIDERED THE WRITTEN SUBMISSIONS FILED BY THE ASS ESSEE. WE FIND THAT THE REVENUE HAS NOT CONTROVERTED THE CASE OF T HE ASSESSEE THAT IT HAS USED SAID VEHICLE EVERY DAY AND AFTER COMPLETIN G THE DISTRIBUTION OF MILK BY 10O CLOCK, IT HAS GIVEN THE VEHICLE ON HIRE TO MOTHER DAIRY AND HAS DECLARED INCOME THEREFROM AMOUNTING TO RS.2 ,34,361/-, AND THEREFORE WAS ENTITLED TO EXCESS DEPRECIATION. WE FIND THAT THE CIT(A) HAS GIVEN A FINDING IN THESE FACTS OF THE CASE OF T HE ASSESSEE THAT THE ITA NO.1027/AHD/2010 -5 VEHICLE IN QUESTION WAS FULLY USED BY THE ASSESSEE, AND THEREFORE DENIAL OF DEPRECIATION ON THE WDV OF THE VEHICLES S HOWN BY THE ASSESSEE IS NOT JUSTIFIED. THERE BEING NO MISTAKE IN THE ORDER OF THE CIT(A) ON THIS ISSUE, WE CONFIRM HIS ORDER AND THE GROUND NO.2 AND 2.1 OF THE REVENUES APPEAL ARE DISMISSED. 10. THE GROUND NO.3 OF THE REVENUES APPEAL IS AS U NDER: 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.22,613/- MADE BY THE AO ON ACCOU NT OF FREIGHT RECEIPTS, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE AO. 3.1 IN DOING SO, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE TDS CERTIFICATE IN FOR M NO.16A SHOWS THE FREIGHT RECEIPT OF RS.2,56,974/- AND THE ASSESSEE HAD ALSO CLAIMED THE TS OF RS.5,767/- AGAINST THE SAID FREIGHT RECEIPT. 11. THE LEARNED DR HAS RELIED ON THE ORDER OF THE A O. HE SUBMITTED THAT THE TDS CERTIFICATE FILED BY THE ASS ESSEE SHOWS THAT FREIGHT RECEIPT AT RS.2.56 LAKHS WHEREAS THE ASSESS EE HAS SHOWN FREIGHT RECEIPT 2,34,361/-, AND THEREFORE THE DIFFERENCE WA S RIGHTLY ADDED BY THE CIT(A). THE ASSESSEE HAS SUBMITTED THAT THE SA ID AMOUNT OF DIFFERENCE WAS RECEIVED IN THE SUCCEEDING YEAR AND WAS DECLARED ACCORDINGLY AS INCOME IN THE COMING YEAR. 12. WE HAVE CONSIDERED SUBMISSIONS OF THE LEARNED D R AND HAVE CONSIDERED THE CONTENTS OF THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. WE FIND THAT THERE IS A DIFFERENCE OF RS .22,613/- BY WAY OF FIGURE OF CORRECTED FREIGHT RECEIPT AS PER TDS CERT IFICATE AND AS PER RECEIPT SHOWN BY THE ASSESSEE. WE FIND THAT THE AS SESSEE HAS TAKEN THE CREDIT OF TDS ON TOTAL TDS CERTIFICATE ON FREIGHT A MOUNT OF ITA NO.1027/AHD/2010 -6 RS.2,56,974/-, AND ACCORDINGLY THE AMOUNT OF DIFFER ENCE OF RS.22,613/- WAS RIGHTLY TAXED BY THE AO, AND ACCORD INGLY, THE ORDER OF THE AO ON THIS ISSUE IS SUSTAINED AND THE GROUND NO.3 AND 3.1 OF THE REVENUE IS ALLOWED. 13. THE GROUND NO.4 OF THE REVENUES APPEAL IS AS U NDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF DIESE L EXPENSES OF RS.2,14,672/- TO RS.42,935/- WITHOUT PROPERLY AP PRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON R ECORD BY THE AO. 4.1 IN DOING SO, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ASSESSEE HAS NOT FURNI SHED THE DETAILS OF TRUCK, NO OF VEHICLES, BILLS ETC. IN RES PECT OF THESE EXPENSES. 14. THE LEARNED DR SUBMITTED THAT THE EXPENSES ON D IESEL WERE NOT VOUCHED, AND THEREFORE DISALLOWED BY THE AO. THE A SSESSEE HAS SUBMITTED THAT THE CIT(A) HAS TAKEN A REALISTIC VIE W AND HAS RESTRICTED THE DISALLOWANCE TO 20% OF THE TOTAL DIESEL EXPENSE S. THE AR HAS RELIED ON THE ORDER OF THE CIT(A). 15. WE HAVE CONSIDERED SUBMISSIONS OF THE LEARNED D R AND PERUSED THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSE SSEE. WE FIND THAT WITHOUT INCURRING DIESEL EXPENSES, VEHICLE COULD NO T HAVE PLIED DURING THE RELEVANT PERIOD. IT IS NOT DISPUTED THAT THE V EHICLE WAS UTILISED FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE AS WELL AS FOR LET OUT THE SAME TO THE MOTHER DAIRY. HOWEVER, SINCE THE DIESE L EXPENSES WERE NOT VOUCHED, THE ACTION OF THE CIT(A) IN RESTRICTIN G THE DISALLOWANCE OUT OF THE DISALLOWANCE TO 20% THEREOF IS QUITE REA SONABLE, AND IS ITA NO.1027/AHD/2010 -7 ACCORDINGLY CONFIRMED. THE GROUND NO.4 AND 4.1 OF THE REVENUES APPEAL IS DISMISSED. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %& %& %& %& / TEJ RAM MEENA) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD