Mahendra Kumar Kaushik(Decd) L/H Amit Kumar, Kolkata V. ITO, Ward-37(2), Kolkata, Kolkata

ITA 1045/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100140 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 13-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MD GHAYS UDDIN JCITSRDR
• Assessee Lawyers: S P CHAUDHARY
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1045 / KOL / 2012 ASSESSMENT YEAR :2007-08 MAHENDRA KUMAR KAUSHIK (DECEASED), L/H AMIT KUMAR M/S MAA DURGA AGENCY, 56, LOWER RANGE, BECK BGAN, KOLKATA 700 019 [ PAN NO.APOPK 1774 L ] V/S . INCOME TAX OFFICER, WARD-37(2), 18, RABINDRA SARANI, KOLKATA 700 001 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI S.P. CHAUDHARY, ADVOCATE /BY RESPONDENT MD. GHAYS UDDIN, JCIT-SR-DR /DATE OF HEARING 03-11-2015 /DATE OF PRONOUNCEMENT 27-11-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-XXIV, KOLKATA IN APPEAL NO.732 /CIT(A)-XXIV/37(2)/09- 10 DATED 28.03.2012. ASSESSMENT WAS FRAMED BY ITO W ARD-37(2), KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 30.12.2009 FOR ASSESSMENT YEAR 2007-08. 2. SEVERAL GROUNDS RAISED BY ASSESSEE IN THIS APPE AL ARE RELATING TO THE DISALLOWANCE OF EXPENSES ON ESTIMATE BASIS BY THE A O ON THE GROUND THAT ITA NO.1045/KOL/2012 A.Y. 2007-08 MAHENDRA KR. KAUSHIK (DECD) V. ITO WD-37(2) KOL. PAGE 2 ASSESSEE FAILED TO FURNISH SUPPORTING/RELIABLE EVID ENCE IN SUPPORT OF THOSE EXPENSES. THE DETAILS OF SUCH EXPENSES ARE SUBMITTE D AS UNDER : A) ON ACCOUNT OF TOUR EXPENSES@20% RS. 88,238/- B) ON ACCOUNT OF STAFF WELFARE @20% RS. 1,18,497/- C) ON ACCOUNT OF TRAVELING EXPENSES@20% RS.1,44,800 /- D) ON ACCOUNT OF SALES PROMOTION@20% RS.1,18,497/- E) ON ACCOUNT OF PAPER ROLL@2% RS. 89,051/- F) ON ACCOUNT OF SOFT WIRE TRAINING@20% RS. 60, 000/- G) ON ACCOUNT OF SOFTWARE MAINTENANCE@5% RS.1,07,19 9/- BESIDES THE ABOVE, THE AO ALSO DISALLOWED THE FOLLO WING EXPENSES : H) ON ACCOUNT OF DEPRECIATION (ACTUAL) RS.1,85,700 /- I) ON ACCOUNT OF CONNECTIVITY CHARGES(ACTUAL) RS.3, 59,144/- AS REGARDS THE DEPRECIATION CLAIMED .BY ASSESSEE FO R AN AMOUNT OF 1,85,700/- THE ASSESSING OFFICER DISALLOWED THE SAM E BY OBSERVING THAT ASSESSEE COULD NOT RECONCILE THE DEPRECIATION AGAIN ST THE PURCHASE OF NEW COMPUTERS DURING THE YEAR 2006-07. SIMILARLY, REGAR DING THE DISALLOWANCE OF THE TELEPHONE CHARGES, THE AO FOUND THAT THE ASSESS EE IS SHOWING/ CLAIMING THE CONNECTIVITY CHARGES AND TELEPHONE EXPENSES SIM ULTANEOUSLY IN THE BOOKS OF ACCOUNTS. THEREFORE THE AO DISALLOWED THE TELEPH ONE EXPENSES. ALL THE DISALLOWANCES WERE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO HAS REDUCED THE EXPENSES ON ESTIMATION BASIS BY GIVING SOME REL IEF TO ASSESSEE AND IN SOME CASES THE AO ORDER WAS UPHELD, THE DETAILS OF THE SAME IS GIVEN AS UNDER : A) ON ACCOUNT OF TOUR EXPENSES@10% (PARTLY RELIEF) RS. 44,119/- B) ON ACCOUNT OF STAFF WELFARE @10%(PARTLY RELIEF) RS. 59,249/- C) ON ACCOUNT OF TRAVELING EXPENSES@10%(PARTLY RELI EF) RS. 72,400/- D) ON ACCOUNT OF SALES PROMOTION@10%(PARTLY RELIEF) RS. 59,249/- E) ON ACCOUNT OF PAPER ROLL@2% (UPHELD) RS. 89, 051/- F) ON ACCOUNT OF SOFTWARE TRAINING@10%(PARTLY RELIE F) RS. 30,000/- G) ON ACCOUNT OF SOFTWARE MAINTENANCE@5%(UPHELD) RS .1,07,199/- IN THE FOLLOWING CASES THE ORDER OF THE AO WAS UPHE LD : A) ON ACCOUNT OF DEPRECIATION (UPHELD) RS.1,85,700 /- B) ON ACCOUNT OF CONNECTIVITY CHARGES(UPHELD) RS.3, 59,144/- ITA NO.1045/KOL/2012 A.Y. 2007-08 MAHENDRA KR. KAUSHIK (DECD) V. ITO WD-37(2) KOL. PAGE 3 3. AGGRIEVED, ASSESSEE PREFERRED SECOND APPEAL BEFO RE US ON THE FOLLOWING GROUNDS OF APPEAL:- 1. FOR THAT ON THE FACTS OF THE CASE, THE ORDER PA SSED BY THE LD. C.I.T.(A) IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 2. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN NOT ALLOWING THE ADDITION MADE BY THE A.O ON ESTIMATE B ASIS RS.44,119/- ON ACCOUNT OF TOUR EXPENSES WHICH IS COMPLETELY ARBITR ARY, UNJUSTIFIED AND ILLEGAL. 3. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN NOT ALLOWING THE ADDITION MADE BY THE AO ON ESTIMATE BA SIS RS.59,249/- ON ACCOUNT OF STAFF WELFARE WHICH IS COMPLETELY ARBITR ARY, UNJUSTIFIED AND ILLEGAL. 4. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN NOT ALLOWING THE ADDITION MADE BY THE AO ON ESTIMATE BA SIS RS.72,400/- ON ACCOUNT OF TRAVELLING EXPENSES WHICH IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 5. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN CONFIRMING THE ADDITION MADE BY THE AO ON ACCOUNT O F DEPRECIATION AMOUNTING TO RS.1,85,700/- NEW COMPUTERS WHICH IS C OMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 6. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN NOT ALLOWING THE ADDITION MADE BY THE AO ON ESTIMATE BA SIS RS.59,249/- ON ACCOUNT OF SALES PROMOTION WHICH IS COMPLETELY ARBI TRARY, UNJUSTIFIED AND ILLEGAL. 7. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN CONFIRMING THE ADDITION MADE BY THE AO ON ACCOUNT O F CONNECTIVITY CHARGES AMOUNTING TO RS.3,59,144/- WHICH IS COMPLET ELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 8. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN CONFIRMING THE ADDITION MADE BY THE AO ON PAPER ROL L CONSUMPTION AMOUNTING TO RS.89,051/- WHICH IS COMPLETELY ARBITR ARY, UNJUSTIFIED AND ILLEGAL. 9. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN NOT ALLOWING THE ADDITION MADE BY THE AO ON ESTIMATE BA SIS OF RS.30,000/- ON ACCOUNT OF SOFTWARE EXPENSES WHICH IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. ITA NO.1045/KOL/2012 A.Y. 2007-08 MAHENDRA KR. KAUSHIK (DECD) V. ITO WD-37(2) KOL. PAGE 4 10. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT( A) WAS WRONG IN CONFIRMING THE ADDITION MADE BY THE AO ON SOFTWARE MAINTENANCE AMOUNTING TO RS.1,07,199/- WHICH IS COMPLETELY ARBI TRARY, UNJUSTIFIED AND ILLEGAL. 11. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT( A) WAS WRONG IN HOLDING THAT NO SPECIFIC OPPORTUNITY IS REQUIRED TO BE GIVEN IN CHARGING INTEREST U/S 234B, ACCORDING TO HIM CHARGING OF INT EREST IS CONSEQUENTIAL. SHRI S.P. CHAWDHARY, LD. AUTHORIZED REPRESENTATIVE APPEARING ON BEHALF OF ASSESSEE AND MD. GHAYAS UDDIN, LD. DEPARTMENTAL REP RESENTATIVE APPEARING ON BEHALF OF REVENUE. 4. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. LD. DR VEHEMENTLY RE LIED ON THE ORDERS OF AUTHORITIES BELOW. LD. AR SUBMITTED THE PAPER BOOK RUNNING PAGES FROM PAGES 1 TO 107. LD. AR SUBMITTED THAT AO HAS DISALLOWED T HE EXPENSES ON THE ESTIMATE BASIS WHICH IS NOT ACCEPTABLE AS PER THE P ROVISIONS OF I.T. ACT AND CLAIMED THAT ALL THE EXPENSES WERE INCURRED ONLY IN CONNECTION WITH BUSINESS. THE CIT(A) HAS ALSO REDUCED THE DISALLOWANCE MADE B Y THE AO ON THE BASIS OF ESTIMATES WITHOUT BRINGING ANY FACTUAL FINDING A BOUT THE EXPENSES. FROM THE AFORESAID DISCUSSION, WE FIND THAT AO HAS DISALLOWE D THE EXPENSES AS STATED ABOVE UNDER THE HEADING A TO G, ON ESTIMATED BASIS AND HE HAS NOT BROUGHT ANYTHING CONCRETE FOR MAKING THE DISALLOWANCES. THE REASON FOR THE DISALLOWANCE WAS MENTIONED THAT THE ASSESSEE FAILED TO PRODUCE RELIABLE VOUCHER AND PRODUCED ONLY SELF MADE LEDGER AND VOUC HER. HOWEVER WE FIND THAT IT WAS THE DUTY OF THE ASSESSEE TO MAINTAIN TH E SUFFICIENT RECORD TO JUSTIFY THE GENUINENESS OF THE EXPENSES. IN VIEW OF THE ABO VE WE DIRECT THE AO TO RESTRICT THE DISALLOWANCE TO THE TUNE OF 5% (1% IN CASE OF PAPER ROLL) OF ALL THE EXPENSES INCLUDING THE CONNECTIVITY EXPENSES EXCEPT THE EXPENSES CLAIMED IN THE FORM OF DEPRECIATION. REGARDING THE DISALLOWANC E OF DEPRECIATION EXPENSES, WE FIND FROM THE AUDITED FINANCIAL STATEM ENT THAT THE ASSESSEE HAS PURCHASED THE COMPUTERS FOR A VALUE OF RS. 2,52,30, 721/- AND CLAIMED THE DEPRECIATION THEREON. WE FIND FROM THE ORDER OF THE LOWER AUTHORITIES THAT THE ITA NO.1045/KOL/2012 A.Y. 2007-08 MAHENDRA KR. KAUSHIK (DECD) V. ITO WD-37(2) KOL. PAGE 5 DISALLOWANCE WAS MADE AND CONFIRMED DUE TO NON PROD UCTION OF THE BILL FOR THE PURCHASE OF THE COMPUTER. BEFORE US THE LD. AR HAS NOT PRODUCED ANYTHING TO CONTROVERT THE FINDINGS OF THE LOWER AUTHORITIES. T HEREFORE WE ARE INCLINED NOT TO INTERFERE IN THE ORDER OF CIT(A). 5. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 27/ 11/2015 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 27 /1 1 /2015 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-MAHENDRA KR. KAUSHIM (DECD), M/S MAA DUR GA AGENCY, 56, LOWER RANGE, BECK BAGAN, KOLKATA 700 019 2. /RESPONDENT- ITO WD-37(2), 18, RABINDRA SARANI, KOL KATA-700 001 3. * +, - - . / CONCERNED CIT KOLKATA 4. - - .- / CIT (A) KOLKATA 5. 012 33+,, - +, , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ - , /TRUE COPY/ / - +, ,