SHRI PREM CHAND GUPTA, JHALAWAR V. INCOME TAX OFFICER, JHALAWAR

ITA 1032/JPR/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6159 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 26-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA JCIT DR DHK
• Assessee Lawyers: ANAND SHARMA
• Keywords: Business expenditure
• Section: 37(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 1032/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2012-13 SHRI PREM CHAND GUPTA M/S. BAJRANG TRADING COMPANY GRAIN MERCHANT & COMMISSION AGENT 1, NAI AABADI, ASNAWAR, JHALAWAR CUKE VS. THE ITO JHALWARA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABEPG 0237 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI ANAND SHARMA, CA JKTLO DH VKSJ LS@ REVENUE BY:SMT. SEEMA MEENA, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/05/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24 /05/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A), KOTA DATED 05-10-2017 FOR THE ASSESSMENT Y EAR 2012-13 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DISALLOWING THE CLAIM O F RS. 3,43,760/-, THE SAME MAY BE ALLOWED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DISALLOWING EXPENSES OF RS. 1,37,325/- OF BARDANA USED IN DISPATCHING THE GOODS DEALT IN THE SAME MAY BE ALLOWED. ITA NO.1032/JP/2017 SHRI PREM C HAND GUPTA VS ITO, JHALAWAR 2 2.1 APROPOS GROUND NO. 1 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- I HAVE GONE THROUGH ASSESSEE'S SUBMISSIONS AND AOS FINDINGS. ON THE FACTS INVOLVED, THE APPELLANT HAS NOT BEEN ABLE TO PRODUCE EVIDENCES DESPITE ADEQUATE OPPORTUNITY GIVEN BY THE AO IN THIS REGARD. DESPITE THE REQUIREMENTS OF GIVING CONFIRMATIONS, THE ASSES SEE GAVE ONLY SOME PHONE NUMBERS TO THE AO THUS NOT FULFILLING HIS ONUS REGARDING THE CLAIM. HE HAS NOT BEEN ABLE TO PROVE THE BASIS OF ANY SUBSEQUENT DOCUMENTS BEING ADMISSIBLE IN THE APPELLATE PROCEEDINGS AS COVERED U/R 46A AS WELL. UNDER THE CIRCUMSTANCES, I AM IN AGREEMENT WITH THE AO AS REGARDS DISALLOWANCE OF THE CLAIM OF RS. 3,43,760/- CLAIMED TO BE PERTAINING TO SHORTAGES, DISCOUNTS ET C. FOR PRODUCE SOLD TO NON-DEALERS. THE DISALLOWANCE MADE BY THE AO IS ACCORDINGLY UPHELD. THIS GROUND O F APPEAL IS TREATED AS DISMISSED. 2.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE TRIED TO OBTAIN THE CONFIRMATIONS FROM THE RESPECTIVE DEALERS AS TO THE DISALLOWANCE MADE BY THE AO. HOWE VER, THE ASSESSEE VIDE HIS LETTER DATED 16-06-2014 SUBMITTED THE ADDR ESSES AND MOBILE NUMBERS OF MAJOR DEALERS. THE LD.AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE HAD SUBMITTED THE CONFIRMATION F ROM 07 DEALERS INVOLVING AMOUNT OF RS. 2,49,660/-. THE LD.AR OF TH E ASSESSEE FURTHER SUBMITTED THAT THE AO HAD NOT MADE EFFORTS TO COLLE CT THE INFORMATIONS ITA NO.1032/JP/2017 SHRI PREM C HAND GUPTA VS ITO, JHALAWAR 3 FROM THE PARTIES FOR WHICH THE ASSESSEE HAD PROVIDE D THE ADDRESSES AND MOBILE NOS. THUS THE LOWER AUTHORITIES HAVE CONFIRM ED THE ADDITION TO THE TUNE OF RS. 3,43,760/- AND THE BOOKS OF ACCOUNT WER E TAX AUDITED U/S 44AB OF THE ACT. HENCE, THE LD.AR OF THE ASSESSEE P RAYED FOR DELETION OF ADDITION SUSTAINED BY THE LD. CIT(A). 2.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF THE LOWER AUTHORITIES. 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE TH AT THE ASSESSEE DEALS IN AGRICULTURAL PRODUCE ON WHOLESALE BASIS. THE AO DUR ING THE COURSE OF ASSESSMENT PROCEEDING NOTED THAT THE ASSESSEE HAD S OLD THE GOODS TO THE DEALERS OTHER THAN PLANTS DEBITED THE CLAIM OF RS. 3,43,760/- FOR WHICH THE ASSESSEE COULD NOT PRODUCE THE EVIDENCES BEFORE THE AO AS REQUIRED DURING THE COURSE OF ASSESSMENT PROCEEDING. HENCE, THE AO MADE THE ADDITION OF RS. 3,43,760/- WHICH IN FIRST APPEAL H AS BEEN CONFIRMED BY THE LD. CIT(A). THE LD.AR OF THE ASSESSEE SUBMITTED THAT SOME CONFIRMATIONS OF THE PARTIES AMOUNTING TO RS. 2,49 ,660/-WERE SUBMITTED BEFORE THE LD. CIT(A) BUT THEY WERE NOT CONSIDERED. IT IS FURTHER NOTED THAT LD. CIT(A) HAS NOT TAKEN INTO CONSIDERATION THE CON FIRMATIONS OF THE PARTIES PRODUCED BY THE ASSESSEE FOR THE REASON THA T ASSESSEE HAS NOT ITA NO.1032/JP/2017 SHRI PREM C HAND GUPTA VS ITO, JHALAWAR 4 BEEN ABLE TO PRODUCE THE BASIS OF ANY SUBSEQUENT DO CUMENTS BEING ADMISSIBLE IN THE APPELLATE PROCEEDINGS AS COVERED U/R 46A AS WELL. THE LD. CIT(A) THUS CONFIRMED THE DISALLOWANCE OF THE C LAIM OF RS. 3,43,760/- PERTAINING TO SHORTAGES, DISCOUNTS ETC. FOR PRODUCE SOLD TO NON-PLANT DEALERS. IN VIEW OF THE ABOVE FACTS, CIRCUMSTANCES OF THE CASE AND THE SUBMISSIONS OF THE LD.AR OF THE ASSESSEE, IT WILL B E REASONABLE IN THE INTEREST OF EQUITY AND JUSTICE TO SUSTAIN THE ADDI TION OF RS. 1,71,880/- I.E. 50% OF DISALLOWANCE OF RS. 3,43,760/-. THUS GROUND NO. 1 OF THE ASSESSEE IS PARTLY ALLOWED. 3.1 APROPOS GROUND NO. 2 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- I HAVE GONE THROUGH ASSESSEE'S SUBMISSION AND AOS FINDINGS. THE ITAT MUMBAI BENCH H IN THE CASE OF AMITABH BACHCHAN CORPN. LTD VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-13, MUMBAI 56 TAXMANN.COM 77 (MUMBAI-TRIB) HELD. SECTION 37(1) OF THE INCOME-TAX ACT, 1961 BUSINESS EXPENDITURE ALLOWABILITY OF (RAW MATERIA L DISCARDED) ASSESSMENT YEAR 1999-2000 ASSESSEE COMPANY WAS ENGAGED IN BUSINESS OF PRODUCING FILMS, TV SERIALS AND AUDIO TAPES - IT CLAIMED DEDUCTION O N ACCOUNT OF RAW MATERIAL DISCARDED BUT IT COULD N OT FURNISH ANY RELEVANT DETAILS TO SATISFACTION OF ASSESSING OFFICER WHETHER DISALLOWANCE MADE BY ASSESSING OFFICER OF SAID DEDUCTION WAS TO BE CONFIRMED HELD YES. ITA NO.1032/JP/2017 SHRI PREM C HAND GUPTA VS ITO, JHALAWAR 5 THE SUBMISSION MADE BY THE APPELLANT ARE NEITHER DOCUMENTED NOR SATISFACTORY. THE PURCHASE O F BARDANA WHEN HE HAS OWN STOCK FOR SALE IS NOT UNDERSTAND ABLE IN THE ABSENCE OF PURCHASE BILLS. T HE ENTIRE EXPLANATION IS AT BEST THEORETICAL AND THE EXPENSES OF RS. 1,37,325/- IS THEREFORE, RIGHTLY DISALLOWED BY THE AO. THIS GROUND OF APPEAL IS TREA TED AS DISMISSED. 3.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LOWER AUTHORITIES HAVE ERRED IN SUSTAINING THE ADDITION OF RS. 1,37,325/- AS THE ASSESSEE PURCHASES GOODS IN LOOSE FROM FARMERS AND THE SAME IS DISPATCHED TO THE PARTY BY PACKING MATERIA LS I.E. BARDANA. THE LD.AR OF THE ASSESSEE FURTHER SUBMITTED THAT SOMETI MES THE ASSESSEE PURCHASES 2 ND HAND BARDANA FROM THE MARKET FOR WHICH BILLS AND I NVOICES ARE NOT AVAILABLE. IT ALSO NOTED THAT ASSESSEE HAD SUBMITTED ITS TRADING ACCOUNT BEFORE THE LD. CIT(A) SHOWING THAT THE ASSE SSEE HAD SOLD AGRICULTURE PRODUCE DURING THE YEAR UNDER CONSIDERA TION. 3.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF THE LOWER AUTHORITIES. 3.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED THAT THE ASSESSEE DEALS IN SALES OF AGRICULTURAL PRODUCE WHICH IS PURCHASED FROM THE FA RMERS. THE ASSESSEE WILL DISPATCH THE AGRICULTURAL PRODUCE TO THE PARTY IN THE BARDANA. ITA NO.1032/JP/2017 SHRI PREM C HAND GUPTA VS ITO, JHALAWAR 6 HOWEVER, THE ASSESSEE HAS NOT PRODUCED THE BILLS BE FORE THE LOWER AUTHORITIES FOR PURCHASE OF BARDANA AMOUNTING TO RS . 1,37,325/- WHICH WAS SUSTAINED BY THE LD. CIT(A). IN VIEW OF THE SUB MISSIONS OF THE ASSESSEE AND THE BUSINESS FIELD OF THE ASSESSEE, IT WILL BE IN THE INTEREST AND EQUITY AND JUSTICE TO REDUCE THE ADDITION TO TH E EXTENT OF RS. 68,663/- I.E. 50% OF RS. 1,37,325/-. THUS GROUND NO. 2 OF TH E ASSESSEE IS PARTLY ALLOWED. 5.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24-05-2018 . SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24 /05/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI PREM CHAND GUPTA, JHALAWAR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, JHALAWAR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.1032/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR