M/S BANSIWALA IRON & STEEL ROLLING MILLS, JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3, JAIPUR

ITA 1094/JPR/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5399 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 24-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DEVANG GARGIEYA ITP
• Section: 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES, B JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1094/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2014-15 M/S BANSIWALA IRON & STEEL ROLLING MILLS, SANSAR CHAND LINK ROAD, JAIPUR CUKE VS. THE DCIT, CIRCLE-03, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADFB2375A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. DEVANG GARGIEYA (ITP) JKTLO DH VKSJ LS @ REVENUE BY : MS. CHANCHAL MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 28/09/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 07/10/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)- 01, JAIPUR DATED 08.08.2018 WHEREIN THE ASSESSEE HA S TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE, IN PARTLY CONFIRMING THE ORDER OF THE AO, SUSTAININ G LUMP SUM ADDITION OF RS. 75,000/- AS AGAINST THE ADDITION OF RS. 1,50 ,000/- MADE BY THE AO, OUT OF VARIOUS EXPENSES I.E. REPAIRS AND MAINTE NANCE STATIONERY TRAVELLING ADVERTISING AND TELEPHONE. THE DISALLOWA NCE SO MADE AND CONFIRMED BY THE LD. CIT(A), BEING TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS AND HENCE KINDLY BE DELETED IN FULL. 2. THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL AS O N THE FACTS OF THE CASE, IN CONFIRMING THE ORDER OF THE AO, DISALLOWIN G EMPLOYEES CONTRIBUTION TO ESI RS. 3636/- THOUGH THE SAME HAS BEEN PAID WITHIN ITA NO. 1094/JP/2018 M/S BANSIWALA IRON & STEEL ROLLING MILLS, JAIPUR V S. DCIT, JAIPUR 2 THE SAME FINANCIAL YEAR AND BEFORE THE ROI FILLING AND IS ALLOWABLE AS HELD BY VARIOUS COURTS. THE DISALLOWANCE SO MADE AN D CONFIRMED BY THE LD. CIT(A), BEING TOTALLY CONTRARY TO THE PROVI SIONS OF LAW AND FACTS AND HENCE KINDLY BE DELETED IN FULL. 2. GROUND NO. 1 OF ASSESSEES APPEAL RELATES TO SUS TENANCE OF DISALLOWANCE OF RS. 75,000/- AS AGAINST THE ADDITIO N OF RS. 1,50,000/- MADE BY THE AO OUT OF VARIOUS EXPENSES CLAIMED BY THE AS SESSEE IN ITS PROFIT AND LOSS ACCOUNT. IN THIS REGARD, THE LD. AR SUBMITTED THAT THE EXPENSES WERE FULLY SUPPORTED BY VOUCHERS AND THE PAYMENTS HAVE B EEN MADE THROUGH CHEQUES. IT WAS SUBMITTED THAT THE EXPENSES WERE WH OLLY AND EXCLUSIVELY INCURRED FOR BUSINESS PURPOSES AND BY NO STRETCH OF IMAGINATION, THE EXPENSES CAN BE HELD AS PERSONAL IN NATURE. IT WAS FURTHER SUBMITTED THAT NO SUCH DISALLOWANCE WAS MADE IN THE EARLIER YEARS AND BASIS MERE ALLEGATION AND SUSPICION, DISALLOWANCE HAS BEEN MADE DURING TH E IMPUGNED ASSESSMENT YEAR. IT WAS FURTHER SUBMITTED THAT NO SPECIFIC FIN DING HAS BEEN RECORDED BY THE ASSESSING OFFICER AND IT IS CLEARLY IN NATURE O F AD-HOC DISALLOWANCE. IT WAS FURTHER SUBMITTED THAT LOOKING TO A HUGE TURNOVER O F ASSESSEE, CLAIM OF EXPENDITURE IS OTHERWISE VERY MEAGER. IT WAS ACCORD INGLY SUBMITTED THAT DISALLOWANCE SO SUSTAINED BY THE LD. CIT(A) MAY BE DELETED. 3. REGARDING GROUND NO. 2, IT WAS SUBMITTED THAT A N AMOUNT OF RS. 3,636/- ON ACCOUNT OF EMPLOYEES CONTRIBUTION T O ESI HAS BEEN DISALLOWED BY THE ASSESSING OFFICER WHICH HAS BEEN SUSTAINED B Y THE LD. CIT(A). IT WAS SUBMITTED THAT THE AMOUNT WAS PAID WITH A DELAY OF ONE DAY ONLY AND WELL BEFORE THE DUE DATE OF FILING OF THE RETURN U/S 139 OF THE ACT. IT WAS SUBMITTED THAT THE ISSUE IS NOW NO MORE RES-INTEGRA IN AS MUCH AS THE SAME IS COVERED BY THE DECISION OF HONBLE RAJASTHAN HIG H COURT IN CASE OF CIT VS. SBBJ (2014) 363 ITR 70 (RAJ) AND CIT VS. JAIPUR VID YUT VITRAN NIGAM LTD. ITA NO. 1094/JP/2018 M/S BANSIWALA IRON & STEEL ROLLING MILLS, JAIPUR V S. DCIT, JAIPUR 3 (2014) 363 ITR 307 (RAJ). IT WAS ACCORDINGLY SUBMIT TED THAT THE DISALLOWANCE SO MADE MAY KINDLY BE DELETED. 4. PER CONTRA, THE LD. DR SUBMITTED THAT ON EXAMINA TION OF BOOKS OF ACCOUNTS, THE ASSESSING OFFICER OBSERVED THAT THE E XPENSES WERE NOT SUPPORTED BY PROPER BILLS, SOME OF THE EXPENSES WER E CLAIMED WITH HANDMADE SLIPS/BILLS AND SOME OF THE PAYMENTS WERE MADE IN CASH. FURTHER NO PHONE REGISTER HAS BEEN MAINTAINED. THEREFORE, T HE PROBABILITY OF PERSONAL USE AND NON-BUSINESS USE OF THESE EXPENSES CANNOT BE RULED OUT AND EXPENSES CANNOT BE HELD TO BE INCURRED EXCLUSIV ELY FOR BUSINESS PURPOSES. THE AO ACCORDINGLY DISALLOWED A NOMINAL SUM OF RS. 1,50,000/- OUT OF RS. 14,76,034/- WHICH HAS BEEN FURTHER RESTR ICTED BY THE LD. CIT(A) TO RS. 75,000/- AND NO FURTHER RELIEF SHOULD BE ALLOWE D TO THE ASSESSEE. REGARDING DISALLOWANCE OF EMPLOYEES CONTRIBUTION T O ESI, THE LD. DR RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD CIT(A) HAS GIVEN A SPECIFIC FINDING THAT NUMBER OF PAYMENTS HAVE BEEN MADE IN CASH TO N AVRANG OIL COMPANY, AJMER FOR WHICH NO JUSTIFICATION HAS BEEN FURNISHED BY THE ASSESSEE. EVEN BEFORE US, THE SAID FINDINGS OF LD CIT(A) REMAIN UN CONTROVERTED. WHERE THE ASSESSEE CLAIMS CERTAIN EXPENDITURE, THE ONUS IS ON THE ASSESSEE TO SUBSTANTIATE THE SAME WITH PROPER DOCUMENTATION THA T THE SAME HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR PURPOSES OF BUS INESS AND IN THE INSTANCE CASE, WHERE THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE SAME, IT HAS TO SUFFER THE NECESSARY CONSEQUENCE OF DISALLOWANCE OF THE SA ID EXPENDITURE AND THE REVENUE IS LEFT WITH NO OPTION BUT TO DISALLOW THE SAME. THEREFORE, TO THE EXTENT OF PAYMENT MADE IN CASH TO NAVRANG OIL COMPA NY, AJMER, THE DISALLOWANCE IS UPHELD AND THE REMAINING ADDITION S USTAINED BY THE LD CIT(A) ITA NO. 1094/JP/2018 M/S BANSIWALA IRON & STEEL ROLLING MILLS, JAIPUR V S. DCIT, JAIPUR 4 IS HEREBY DELETED IN ABSENCE OF ANY SPECIFIC FINDIN GS. IN THE RESULT, THE GROUND IS PARTLY ALLOWED. 6. REGARDING ESI CONTRIBUTION WHERE THE SAME HAS B EEN DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME, THE ISS UE IS NO MORE RES INTEGRA AND COVERED BY THE DECISIONS OF THE HONBLE RAJASTH AN HIGH COURT IN DECISIONS CITED BY THE LD AR AND THE DISALLOWANCE S O MADE IS HEREBY DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISPOS ED OFF WITH ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 07/10/2020. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07/10/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S BANSIWALA IRON & STEEL ROLLING M ILLS, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE-03, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1094/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR