M/s Merlins, Kolkata V. A.C.I.T.,Cilcle-31, Kolkata

ITA 108/KOL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 5059 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 22-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.108/KOL/2019 ( / ASSESSMENT YEAR: 2012-13) M/S MERLINS 22, PRINCE ANWAR SHAH ROAD, KOLKATA-700033. VS. ACIT, CIRCLE-31, KOLKATA ./ ./PAN/GIR NO.: AATFM 9672 P (APPELLANT) .. (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SMT. RANU BISWAS, ADDL. CIT / DATE OF HEARING : 31/10/2019 /DATE OF PRONOUNCEMENT : 22/11/2019 / O R D E R PER BENCH: THE CAPTIONED APPEAL FILED BY THE ASSESSEE , PE RTAINING TO ASSESSMENT YEAR 2012-13, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-9, KOLKATA IN APPEAL NO. 71/CIT(A)-9/CIR-3 1/2015-16/KOL, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 19/03/2015. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD . DEPARTMENTAL REPRESENTATIVE(DR), WAS PRESENT FOR THE APPELLANT R EVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DIS POSED OF EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON M ERITS IN TERMS OF RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, RULES, 1963. M/S MERLINS ITA NO.108/KOL/2019 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 2 22 2 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCES MADE BY THE LD. ASSESS ING OFFICER ON ESTIMATE A SUM OF RS. 50,000/- IN RESPECT OF MAINTENANCE OF COMPUTER WHICH IS BAD IN LAW AND ON FACTS. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE LD. ASSESSI NG OFFICER OF 100% OF CONSULTANCY CHARGES ON ESTIMATE AMOUNTING TO RS. 2, 50,000/- WHICH IS BAD IN LAW. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE LD. ASSESSI NG OFFICER ON ESTIMATE ON LUMP SUM AMOUNT OF RS. 3,00,000/- IN RESPECT OF CONVEYANCE CHARGES, MISCELLANEOUS CHARGES AND SALARY WHICH IS BAD IN LA W AND ON FACTS. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY AND /OR SUBMIT FURTHER OR MORE GROUND(S) OF APPEAL EITHER BEFORE OR AT ANY TIME DURING THE HEAR ING OF THE APPEAL. 4. WE NOTE THAT THE ASSESSING OFFICER HAS MADE TH E DISALLOWANCE ON VARIOUS HEADS ON AD HOC BASIS WHICH IS NOT ALLOWED UNDER TH E ACT AS THE ASSESSEE HAS SUBMITTED THE DETAILS AND DOCUMENTS DURING THE ASSE SSMENT STAGE. MOREOVER, THE ASSESSMENT WAS FRAMED BY ASSESSING OFFICER U/S 143( 3) OF THE ACT. WE NOTE THAT THE AO COULD HAVE VENTURED INTO ESTIMATION ONLY AFT ER REJECTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE U/S 145(3) AND THEREAFTER BY BEST JUDGMENT ASSESSMENT U/S 144 OF THE ACT. HERE IN THIS CASE, THE AO HAS N OT PASSED ANY ORDER U/S 144 OF THE ACT. THE AO THUS WITHOUT REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE HAS GONE FOR ESTIMATION ON SUSPICION AND CONJECTURES TH AT THE ASSESSEE MAY BE INFLATING ITS EXPENSES. WHILE SCRUTINIZING THE EXPE NDITURE IF THE EXPENSES CLAIMED ARE NOT HAVING ANY NEXUS TO THE BUSINESS OF THE ASS ESSEE OR IF THERE IS DEFICIENCY IN THE VOUCHERS OR THERE IS NO BILLS SUPPORTING THE IN CURRENCE OF AN EXPENDITURE, AT THE MOST EXPENSES TO THE EXTENT THAT ARE NOT SUPPORTED BY THE VOUCHERS CAN BE HELD TO BE NON-GENUINE AND CAN BE DISALLOWED BY THE AO; AND ITEM-WISE THE AO COULD HAVE DISALLOWED THE EXPENDITURE RATHER THAN GOING F OR AD HOC DISALLOWANCE OF PERCENTAGE BASIS OF THE EXPENSES CLAIMED BY THE ASS ESSEE WHICH ACTION OF THE AO IS ARBITRARY IN NATURE AND CANNOT BE SUSTAINED. M/S MERLINS ITA NO.108/KOL/2019 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 3 33 3 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 22.11 .2019 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 22 /11/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. M/S MERLINS 2. ACIT, CIRCLE-31, KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES