SUNIL HEALTHCARE LTD., Alwar V. ACIT, Alwar

ITA 1099/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2188 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 13-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 1099/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2012-13 SUNIL HEALTH CARE LTD. 17-18, OLD INDUSTRIAL AREA ALWAR CUKE VS. THE A.C.I.T., CIRCLE-1, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCS9198Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A.VERMA LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 06/04/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 10/04/2017 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A) ALWAR DATED 04.11.2016 FOR A.Y. 2012-13. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE AS UNDER:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADHOC DISALLOWANCE OUT OF FOLLOWING EXPENSES:- LEGAL & PROFESSIONAL CHARGES RS. 70,000/- ITA NO.1099/JP/2016 SUNIL HEALTH CARE LTD. VS. A.C.I.T.,CIRCLE-1, ALWAR 2 SALES PROMOTION EXPENSES RS. 50,000/- 2. THE LD. AO HAS ERRED ON FACTS AND IN LAW IN CONF IRMING DISALLOWANCE OF RS. 1,48,476/- (42,731 + 1,05,745) U/S 36(1) (VA) R.W.S 2(24)(X) ON ACCOUNT OF DELAYED PAYMENTS OF EMPLOYEE S CONTRIBUTION TOWARDS ESI & PF IGNORING THAT THE SAME IS DEPOSITE D BEFORE THE END OF THE YEAR AND THE ISSUE IS COVERED BY THE DECISION O F RAJASTHAN HIGH COURT IN CASE OF CIT VS. STATE BANK OF BIKANER & JA IPUR 363 ITR 70,CIT VS. JAIPUR VIDYUT VITRAN NIGAM LTD. 363 ITR 307 AND CIT VS. UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LTD. 366 ITR 163. 2. REGARDING GROUND NO. 1, THE BRIEF FACTS OF THE C ASE ARE THAT THE ASSESSEE HAS DEBITED A SUM OF RS. 23,47,751/- IN TH E YEAR UNDER CONSIDERATION UNDER THE HEAD LEGAL AND PROFESSIONA L CHARGES IN COMPARISON TO LAST YEARS CHARGES OF RS. 23,54,398/ -. THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF LEGAL AND PROFESSIONAL CHARGES ALONG WITH VOUCHERS FOR VERIFICATION INDICATING THE PURPOSE AN D THE BUSINESS EXIGENCY. IN RESPONSE, THE ASSESSEE PRODUCED THE DA TE-WISE DETAILS OF LEGAL & PROFESSIONAL CHARGES AS ADMITTED BY THE ASS ESSING OFFICER. AT THE SAME TIME, ASSESSING OFFICER HELD THAT THERE WE RE CERTAIN PAYMENTS THROUGH SELF-MADE VOUCHERS AND IT WAS FAIR AND JUST TO MAKE A ITA NO.1099/JP/2016 SUNIL HEALTH CARE LTD. VS. A.C.I.T.,CIRCLE-1, ALWAR 3 DISALLOWANCE OF RS. 70,000/- IN THIS REGARD. ON SIM ILAR BASIS, THE AO HAS DISALLOWED RS. 50,000/- OUT OF RS. 24,15,534/- INCU RRED THE ASSESSEE UNDER THE HEAD SALE PROMOTION STATING THAT THOUGH THE ASSESSEE HAS PRODUCED DATE-WISE DETAILS OF SALES PROMOTION, HOWE VER, THERE ARE CERTAIN PAYMENTS WHICH WERE MADE IN CASH OR THROUGH SELF-MADE VOUCHERS AND IT WAS FAIR & JUST TO MAKE A DISALLOWA NCE OF RS. 50,000/- ON THIS ACCOUNT. 2.1. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATT ER IN APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE IS M AINTAINING DAY TO DAY BOOKS OF ACCOUNT AND THE EXPENSES ARE BOOKED ON THE BASIS OF BILLS/VOUCHERS AND OTHER SUPPORTING PAPERS WHICH AR E DULY CHECKED AND APPROVED BY THE COMPETENT OFFICERS/EXECUTIVES.THE E XPENSES UNDER THIS HEAD ARE MAINLY RELATED TO LEGAL & PROFESSIONAL FEE S PAID TO VARIOUS PROFESSIONALS, LEGAL EXPERTS, CERTIFICATION FEES ET C. WHICH ARE PROPERLY VOUCHED. THE COMPLETE DETAILS OF LEGAL & PROFESSIO NAL CHARGES WERE SUBMITTED TO THE A.O AND ALL BILLS/VOUCHERS ETC. SU PPORTING THE EXPENSES WERE PRODUCED FOR VERIFICATION AS ALSO STATED BY TH E A.O IN HIS ASSESSMENT ORDER AT PAGE NO. 2. THE DETAILS OF THE EXPENSES ARE ENCLOSED HEREWITH AT P.B. 01-15. THE EXPENSES IN TH E LEDGER ACCOUNT SHOWS THE NATURE OF EXPENSE AND ARE PROPERLY SUPPOR TED. THE ASSESSEE ITA NO.1099/JP/2016 SUNIL HEALTH CARE LTD. VS. A.C.I.T.,CIRCLE-1, ALWAR 4 HAS ALSO DEDUCTED TDS WHEREVER APPLICABLE. THE A.O HAS NOT POINTED OUT ANY SPECIFIC EXPENSE ITEM WHICH IS NOT SUPPORTE D OR IN WHICH THE ASSESSEE HAS BOOKED EXCESS EXPENSE. THE A.O. HAS M ADE AD-HOC DISALLOWANCE WITHOUT ANY BASIS BUT ONLY ON THE DOUB TS AND SURMISES. ON SIMILAR BASIS, THE ASSESSEE HAS CONTESTED THE DISAL LOWANCE OF SALES PROMOTION EXPENSES BEFORE THE LD CIT(A). 2.2. THE LD. DR. IS HEARD WHO HAS RELIED ON THE ORD ERS OF THE LOWER AUTHORITIES. 2.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSU ED THE MATERIAL AVAILABLE ON RECORD. IN THE ASSESSMENT ORDER, THE AO HAS STATED THAT THE ASSESSEE HAS PRODUCED DATA-WISE DETAILS OF LEGA L & PROFESSIONAL CHARGES AND SALES PROMOTION EXPENSES AND ON PERUSAL OF THOSE DETAILS SUBMITTED BY THE ASSESSEE, THE AO HAS DISALLOWED RS . 70,000/- UNDER THE HEAD LEGAL & PROFESSIONAL AND RS. 50,000/- UNDE R THE HEAD SALES PROMOTION EXPENSES. NO SPECIFIC EXPENSES HAVE BEE N HIGHLIGHTED BY THE ASSESSING OFFICER WHICH HAS NOT BEEN INCURRED B Y THE ASSESSEE FOR THE PURPOSES OF BUSINESS OR WHICH HAS BEEN WRONGLY CLAIMED BY THE ASSESSEE. IT IS A CLEAR CASE OF AN ADHOC DISALLOWA NCE WHICH CANNOT BE SUSTAINED IN THE EYES OF LAW. IN THE RESULT, GROUN D NO. 1 OF THE ASSESSEE IS ALLOWED. ITA NO.1099/JP/2016 SUNIL HEALTH CARE LTD. VS. A.C.I.T.,CIRCLE-1, ALWAR 5 3. REGARDING GROUND NO. 2, IT IS ADMITTED POSITION THAT PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS ESI AND EMPLOYEES P ROVIDENT FUND HAS BEEN DEPOSITED BEFORE THE END OF THE FINANCIAL YEAR . IN LIGHT THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR AND OTHERS, THE GROUND TAKEN BY TH E ASSESSEE IS ALLOWED. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/04/2017 . SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 10/04/2017. * GANESH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SUNIL HEALTH CARE LTD., ALWAR 2. IZR;FKHZ@ THE RESPONDENT- THE A.C.I.T., CIRCLE-1, ALWAR 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. 1099/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR