M/s Rewa Refinery Pvt. Ltd., Gwalior V. I.T.O., Shivpuri

ITA 108/AGR/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0672 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 1 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-05-2013
• Assessment Year: misc
• Appeal Filed On: 15-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 108/AGRA/2013 ASSTT. YEAR : 2007-08 M/S. REWA REFINERY PVT. LTD., VS. INCOME-TAX OFF ICER, SABOO BHAWAN, LOHIYA BAZAR, SHIVPURI. GWALIOR (PAN: AADCR2023G). (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 28.05.2013 DATE OF PRONOUNCEMENT OF ORDER : 31.05.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A), GWALIOR DATED 22.01.2013 FOR THE ASSESSMENT YEAR 20 07-08, CHALLENGING THE DISALLOWANCE OF RS.1,00,000/- OUT OF ADMINISTRATIVE AND SELLING EXPENSES. 2. THE ASSESSEE FILED RETURN OF INCOME SHOWING NIL INCOME. THE ASSESSEE COMPANY IS ENGAGED IN REPROCESSING OF BURNT/USED OI L AND LUBRICANT. THIS IS FIRST YEAR OF COMMENCEMENT OF PRODUCTION AND THE COMMERCI AL PRODUCTION STARTED FROM 12.09.2006. THE ASSESSEE HAS MADE SALES OF RS.19,67 ,592/- AND HAS SHOWN NET LOSS OF RS.28,70,981/-. THE AO ON EXAMINATION OF EXPENSE S FOUND THAT THE ASSESSEE HAS ITA NO. 108/AGRA/2013 2 INCURRED ADMINISTRATIVE AND OTHER EXPENSES, THE DET AILS OF WHICH ARE NOTED AT PAGE 2 OF THE ASSESSMENT ORDER. THE SAME WERE BIFURCATED I NTO TOTAL EXPENSES IN A SUM OF RS.2,70,115/- AND PAID IN CASH RS.1,25,317/-. THE A O NOTED THAT VOUCHERS FOR CASH EXPENSES WERE NOT PRODUCED AND FOR OTHER EXPENSES V OUCHERS WERE NOT FOUND PROPER. THE PAYMENT FOR PURCHASE OF DRUMS IN A SUM OF RS.23,450/- WAS FOUND TO BE CAPITAL IN NATURE. THE AO, THEREFORE, DISALLOWED RS.1,50,000/- OUT OF ADMINISTRATIVE/SELLING EXPENSES OF RS.7,24,644/- DE BITED IN THE PROFIT AND LOSS ACCOUNT. THE ADDITION OF RS.1,50,000/- WAS ACCORDIN GLY MADE. THE ASSESSEE CHALLENGED THE ADDITION OF RS.1,50,000/- BEFORE THE LD. CIT(A) AND THE LD. CIT(A) CONSIDERING THE WRITTEN SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION OF RS.50,000/- AND RESTRICTED THE DISALLOWANCE TO RS.1 ,00,000/-. THE LD. CIT(A), HOWEVER, HAS NOT GIVEN ANY REASONS FOR SUSTAINING T HE PART OF THE ADDITION. 3. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR AND ON PERUSAL OF THE FINDINGS OF THE AUTHORITIES BELOW, WE ARE OF THE VI EW THAT THE ADDITION OF RS.1,00,000/- SUSTAINED BY THE LD. CIT(A) IS WHOLLY UNJUSTIFIED. THE ASSESSEE IS A COMPANY AND IS A LEGAL PERSON. THE AO MADE DISALLOW ANCE OF RS.1,50,000/- OUT OF ADMINISTRATIVE/SELLING EXPENSES OF RS.7,24,644/- WI THOUT GIVING ANY PLAUSIBLE REASONS. THE TOTAL EXPENSES NOTED AT PAGE 2 OF THE ASSESSMENT ORDER IN A SUM OF RS.2,70,115/- HAS NOT BEEN ADVERSELY COMMENTED UPON BY THE AO. THE AO MERELY FOUND THAT SOME OF THE VOUCHERS ARE NOT PROPER WITH OUT GIVING DETAILS OF THE SAME. ITA NO. 108/AGRA/2013 3 FURTHER, NO REASONS HAVE BEEN GIVEN HOW THE COST OF THE DRUMS WOULD BE CAPITAL IN NATURE. FURTHER, THE AO HAS NOT GIVEN ANY SPECIFIC DETAILS AS TO WHICH OF THE VOUCHERS WERE NOT PRODUCED BEFORE HIM IN RESPECT OF CASH PAYMENTS. THE LD. CIT(A) WITHOUT GIVING ANY REASONS RESTRICTED THE DI SALLOWANCE TO RS.1,00,000/-. IT, THEREFORE, APPEARS THAT SINCE IT IS A CASE OF HEAVY LOSS, THEREFORE, THE AUTHORITIES BELOW WITHOUT ANY REASONS FOR THE SAKE OF MAKING AD DITION, MADE ADDITION OF RS.1,50,000/- AND RESTRICTED TO RS.1,00,000/- BY TH E LD. CIT(A). ADHOC ADDITIONS WITHOUT GIVING ANY SPECIFIC REASONS ARE NOT PERMISS IBLE. CONSIDERING THE ABOVE DISCUSSION, WE FIND IT APPROPRIATE TO DELETE THE AD DITION OF RS.1,00,000/- AS WELL. THE ORDERS OF THE AUTHORITIES BELOW ARE, ACCORDINGL Y SET ASIDE AND THE ADDITION OF RS.1,00,000/- IS DELETED. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY