The ACIT, 2(1), Bhopal V. M/s M.P.State Tourism Development Corporation Ltd., Bhopal

ITA 113/IND/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59437 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 17-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Assessee Lawyers: R C BAHETI
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 113/IND/2011 A.Y. 2007-084 ASSTT. COMMISSIONER OF INCOME TAX 2(1) BHOPAL ... APPELLANT VS M.P. STATE TOURISM DEVELOPMENT CORPORATION LIMITED, BHOPAL PAN AABCM-0086A ... RESPONDENT APPELLANT BY : SHRI KESHAV SAXENA RESPONDENT BY : SHRI R.C. BAHETI DATE OF HEARING : 02.2.2012 DATE OF PRONOUNCEMENT : 02.2.2012 O R D E R PER JOGINDER SINGH THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 15.2.2011 PASSED BY LEARNED COMMISSIONER OF INCOME TAX 2 (APPEALS), BHOPAL, ON THE GROUND THAT THE LD. FIRST APPELLATE AUTHORITY ERRED IN ALLOWING RELIEF OF RS. 1,26,38,0 00/- OUT OF THE TOTAL DISALLOWANCE OF RS. 1,31,50,000/- MADE ON ACC OUNT OF PUBLICITY, PROMOTION AND FESTIVAL EXPENSES DUE TO N ON- MAINTENANCE OF PROPER VOUCHERS. 2. DURING HEARING, SHRI KESHAV SAXENA, THE LEARNED CIT DR STRONGLY DEFENDED THE ASSESSMENT ORDER BY SUBMITTIN G THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WITHOU T EXAMINING THE VOUCHERS REACHED TO A CONCLUSION AND THERE IS NO QUESTION OF CONSIDERATION OF PAST YEARS AS EACH YEAR IS INDEPENDENT. OUR ATTENTION WAS INVITED TO PAGES 52 TO 66 OF THE PAPER BOOK BY SUBMITTING THAT JUST ON THE LAST DAY OF FINANCIAL YEAR I.E. 31 ST MARCH, 2007 ABOUT RS. 6 CRORES WERE EXPENDED WITHIN ONE DAY AND FOR THAT ALSO NO VOUCHERS WERE P RODUCED BY THE ASSESSEE. IT WAS SPECIFICALLY POINTED OUT THAT THE VOUCHERS WERE NEITHER PRODUCED BEFORE THE ASSESSING OFFICER NOR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AN D BEFORE THE TRIBUNAL. ON THE OTHER HAND, THE LEARNED COUN SEL FOR THE ASSESSEE, SHRI R.C. BAHETI, CONTENDED THAT THE VOUC HERS WERE 3 DULY PRODUCED AND SINCE THE AMOUNT WAS RECEIVED FRO M THE GOVERNMENT, THE SAME WAS UTILISED. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. THE FACTS, IN BRIEF , ARE THAT THE ASSESSEE IS STATE GOVERNMENT UNDERTAKING, LOOKING A FTER TOURISM, BOARDING AND LODGING ETC. IN THE STATE. TH E ASSESSEE DECLARED NIL INCOME IN ITS RETURN FILED ON 8.11.200 7 AFTER ADJUSTING THE BUSINESS LOSSES OF RS.59,05,915/- AND UNABSORBED DEPRECIATION OF RS.1,37,95,039/-. DURING ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE LD. A SSESSING OFFICER THAT THE EXPENDITURE INCURRED BY THE ASSESS EE ON PUBLICITY, PROMOTION, FESTIVALS, DISCOUNT AND COMMI SSION, REPAIR AND MAINTENANCE WAS NOT SUPPORTED BY VOUCHERS. IN VIEW OF THE NON-VERIFIABILITY OF THE EXPENSES DEBITED UNDER VARIOUS HEADS, THE LD. ASSESSING OFFICER MADE PARTIAL DISAL LOWANCES WHICH ARE SUMMARISED AS UNDER: 4 EXPENDITURE HEAD TOTAL EXPENSES (RS.) DISALLOWANCE MADE (RS.) PUBLICITY, PROMOTION & FESTIVAL 11,01,18,286 1,00,0 0,000 DISCOUNT & COMMISSION 1,98,64,406 20,00,000 REPAIRS & MAINTENANCE TRANSPORT 64,14,076 6,00,00 0 REPAIRS & MAINTT.-OTHERS 42,50,418 5,00,000 REPAIRS & MAINTT.-GARDEN 5,15,027 50,000 TOTAL: 1,31,50,000 THE LD. ASSESSING OFFICER MADE PART DISALLOWANCES O UT OF THE ABOVE EXPENSES AND ASSESSED THE INCOME OF THE ASSES SEE AS HAS BEEN DETAILED IN THE ASSESSMENT ORDER. THE AGGR IEVED ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WH O VIDE IMPUGNED ORDER HELD AS UNDER: I HAVE CONSIDERED THE FACTS OF THE CASE AND THE REASONING GIVEN BY THE A.O. IN THE ASSESSMENT ORDER. THE DISALLOWANCE OF RS.1,00,00,000/- OUT OF PUBLICITY, PROMOTION & FESTIVAL EXPENSES AND RS.6,00,000/- OUT OF REPAIRS & MAINTENANCE TRANSPORT APPEARS TO BE UNJUSTIFIED AND WITHOUT ANY COGENT REASON. NO SUCH DISALLOWANCE WAS MADE BY THE A.O. OUT OF THE ABOVE EXPENSES IN THE PAST AND THE A.O. HAS NOT BROUGHT ANY MATERIAL ON RECORD TO WARRANT SUCH ADDITIONS IN THE CASE OF THE APPELLANT FOR THE CURRENT YEAR. THE DISALLOWANCE OF RS.1,00,00,000/- AND RS.6,00,000/- ARE THEREFORE DELETED. HOWEVER, OUT OF DISCOUNT & COMMISSION EXPENSES SHOWN AT RS.1,98,64,406/- AMOUNT TOTALLING TO RS.11,10,133/- HAS BEEN PAID TO AUTORICKSHAWS. DURING A.Y. 2006-07 THE COMMISSION PAID TO AUTORICKSHAWS WAS RS.7,59,716/- OUT OF WHICH DISALLOWANCE OF RS.3,50,000/- WAS MADE. THE ASSESSEE IS NOT IN APPEAL FOR THAT YEAR. THEREFORE, OUT OF DISALLOWANC E OF RS.20,00,000/- I FIND IT JUSTIFIED TO MAINTAIN T HE DISALLOWANCE OF RS.5,11,500/- BEING DUE TO NON- MAINTENANCE OF PROPER VOUCHERS FOR COMMISSION 5 PAID TO AUTORICKSHAWS. THE APPELLANT WILL GET TOTAL RELIEF OF RS.1,26,38,500/- (1,00,00,000/- + 14,88,5 00 + 6,00,000 + 5,00,000 + 50,000) OUT OF TOTAL DISALLOWANCE OF RS.1,31,50,000/-. GROUND NO.3 IS THEREFORE PARTLY ALLOWED. 4. IF THE FINDING ARRIVED AT IN THE IMPUGNED ORDER IS ANALYSED WITH THE FACTS OF THE PRESENT APPEAL AND MORE SPECI FICALLY THE FINDING IN THE ASSESSMENT ORDER THAT THE DISALLOWAN CES WERE MADE DUE TO ABSENCE OF SUPPORTED DOCUMENTS, WE FIND THAT SO FAR AS THE DISALLOWANCES MADE OUT OF PUBLICITY, PRO MOTION & FESTIVAL EXPENSES ARE CONCERNED, THERE IS NO FINDIN G IN THE IMPUGNED ORDER THAT EITHER SUCH SUPPORTING BILLS OR VOUCHERS WERE FURNISHED BY THE ASSESSEE OR THE SAME WERE EXA MINED BY THE LD. CIT(A). IN THE ABSENCE OF SUCH FINDING/SUPP ORTING EVIDENCES, WE FIND NO JUSTIFICATION IN GRANTING REL IEF TO THE ASSESSEE, THEREFORE, THE ASSESSEE IS DIRECTED TO AP PROACH THE LD. ASSESSING OFFICER TO SUBSTANTIATE ITS CLAIM WIT H SUPPORTING BILLS/VOUCHERS ETC., IF ANY, FOR WHICH DUE OPPORTUN ITY OF BEING HEARD TO BE PROVIDED TO THE ASSESSEE, CONSEQUENTLY, THE ISSUES OF PUBLICITY, PROMOTION & FESTIVAL EXPENSES ARE REM ANDED BACK 6 TO THE FILE OF THE LD. ASSESSING OFFICER AND TO THI S EXTENT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PU RPOSES. 5. SO FAR AS DISCOUNT & COMMISSION, REPAIRS AND MAINTENANCE OF TRANSPORT, OTHERS AND GARDEN ETC. AR E CONCERNED, WE FIND THAT PART DELETION BY THE LD. CI T(A) IS JUSTIFIED AND REASONABLE. THEREFORE, ON THESE ISSUE S, WE UPHELD THE STAND OF THE LD. CIT(A). FINALLY, THE APPEAL OF THE REVENUE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESE NCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 2.2.2012. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2.2.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE