The ACIT, Circle-4, Surat V. Shiva Industrial Security Agency Pvt.Ltd., Surat

ITA 1132/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0283 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-09-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 23-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO. 1132/AHD/2013 / ASSESSMENT YEAR : 2004-05 ACIT, CIRCLE-4, SURAT VS M/S. SHIVA INDUSTRIAL SECURITY AGENCY PVT LTD, R.S. NO.71, SAMEER COMPLEX, NAVSARJAN SOCIETY, PANDESARA, SURAT PAN: AAFCS 3845 P / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI PRASOON KABRA, SR DR ASSESSEE BY : NONE / DATE OF HEARING : 07/09/2016 / DATE OF PRONOUNCEMENT: 18/10/2016 / O R D E R PER R.P. TOLANI, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, SURAT DATE D 15.02.2013 FOR ASSESSMENT YEAR 2004-05. 2. FOLLOWING GROUNDS ARE RAISED:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.47, 47,188/- MADE BY THE A.O. ON ACCOUNT OF IN-GENUINE SALARY EXPENSES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN APPRECIATING THE FACT FOUND BY THE AO AND IGNORED EVIDENCES COLLECTED BY THE AO FOR MAKING ADDITION OF RS.47,47 ,188/-. 3. NONE APPEARED FOR THE ASSESSEE DESPITE SERVICE O F THE NOTICE; THEREFORE, THIS APPEAL IS DECIDED EX-PARTE QUA ASSESSEE. 4. LD. DEPARTMENTAL REPRESENTATIVE CONTENDS THAT TH IS IS SECOND ROUND OF THE PROCEEDINGS INASMUCH AS IN THE FIRST ROUND T HE ITAT HAD GIVEN ITA NO. 1132/AHD/2013 ACIT VS. SHIVA INDUSTRIAL SECURITY AGENCY PVT LTD AY : 2004-05 2 DIRECTIONS, WHICH, ACCORDING TO THE AO, WERE NOT PR OPERLY COMPLIED WITH. THE ORDER OF THE LD. AO IS RELIED ON. 5. THE LD. CIT(A), IN HIS ORDER AT PARAGRAPH NO.5, HAS REPRODUCED THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE TO THE EF FECT THAT THE ITAT HAD SET ASIDE THE MATTER WITH OBSERVATIONS THAT THE ASSESSE E HAD CORRELATED THE EXPENSES WITH INCOME. THE ONLY QUESTION WHICH REMA INED TO BE VERIFIED WAS FOR QUANTIFICATION OF THE INCOME AND EXPENDITUR E. THUS, THE FACT OF THE ACCOUNTING ENTRIES WAS ACCEPTED BY THE ITAT. BESIDE S, THE ASSESSEE HAD GIVEN DETAILED BREAK-UP OF THE RELEVANT TRANSACTION S WHICH IS REPRODUCED FROM PAGE NOS. 7 TO 10 OF THE CIT(A)S ORDER. THE LD. CIT(A), IN CONSIDERATION OF THE ENTIRETY OF FACTS AND CIRCUMST ANCES, HELD THAT AS PER DIRECTION GIVEN BY ITAT IN ASSESSEES CASE, THE INC OME OF RS.58,57,239/- AND EXPENDITURE OF RS.47,47,188/- WAS QUITE VERIFIABLE AND CORRELATED; THEREFORE, THE CORRESPONDING EXPENSES WERE ALLOWABLE BY FOLLOW ING OBSERVATIONS:- 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE IN THE LIGHT OF OBSERVATIONS/DIRECTION OF HONBLE ITAT. HONBLE IT AT, WHILE DISCUSSING THE FACTS, HAS ACKNOWLEDGED THE INCOME OF RS.58,57,239/ - CREDITED TO THE ACCOUNT OF ASSESSEE COMPANY AND CORRESPONDING EXPENDITURE O F RS.47,47,188/- DEBITED TO ITS ACCOUNT BY TRANSFERRING THE SAME FRO M SISA. THERE IS NO DOUBT ABOUT THE QUANTIFICATION OF AFORESAID INCOME AND EX PENDITURE. IT HAS ALSO BEEN OBSERVED BY HON'BLE ITAT THAT THE ASSESSEE HAS CO-R ELATED THE EXPENSES WITH THE INCOME. THE ONLY DOUBT WHICH HAS BEEN RAISED BY HON'BLE ITAT IS THAT WHETHER THE FACTS RELATED TO QUANTIFICATION OF AFOR ESAID INCOME AND EXPENDITURE WERE BEFORE THE AO OR NOT THAT NEEDS VE RIFICATION. IT WAS ALSO DECIDED BY HON'BLE ITAT THAT IF THE FACTS ARE VERIF IED AND FOUND CORRECT THAT THE ASSESSEE HAS CREDITED INCOME OF RS. 58,57,239/- AND DEBITED THE CORRESPONDING EXPENDITURE OF RS. 47,47,188/- BY TRA NSFERRING THE SAME FROM SISTER CONCERN, AO WILL ALLOW THE CLAIM OF ASSESSEE . HOWEVER, THE RELEVANT DETAILS, SUPPORTED WITH DOCUMENTARY EVIDENCE WERE F ILED BY ASSESSEE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS, BUT THE A O REFUSED TO ACCEPT THE CONTENTION OF ASSESSEE ON THE GROUNDS THAT THE ASSE SSEE HAS NOT PRODUCED THE COPY OF CONTRACT, COPY OF WORK ORDERS OR SIGNATURES ARE DIFFERENT ON THE SALARY REGISTER ETC. IN MY OPINION, THE OBJECTIONS RAISED BY AO ARE NOT TENABLE. THE APPELLANT HAS FURNISHED THE LEDGER ACCOUNT OF THE A SSESSEE COMPANY IN THE BOOKS OF THE PROPRIETORSHIP CONCERN NAMELY SHIVA IN DUSTRIAL SECURITY AGENCY (SISA) WHEREIN ALL THE RELEVANT ENTRIES IN RESPECT OF RECEIPTS OF ITA NO. 1132/AHD/2013 ACIT VS. SHIVA INDUSTRIAL SECURITY AGENCY PVT LTD AY : 2004-05 3 RS.58,57,239/- AND EXPENDITURE OF RS.47,47,188/- AR E REFLECTED. THE APPELLANT HAS ALSO FILED THE COPIES OF WORK ORDERS GIVEN BY R IL AGAINST WHICH PAYMENTS HAVE BEEN MADE. SIMILARLY, THE COPIES OF BANK STATE MENTS FILED BY APPELLANT REFLECT THE PAYMENTS RECEIVED AND EXPENDITURE INCUR RED THROUGH CHEQUES ON DIFFERENT DATES. ADDITIONALLY, THE APPELLANT HAS AL SO SUBMITTED THE COPIES OF SALARY REGISTER AND BILLS TO JUSTIFY THAT THE EXPEN SES CLAIMED ARE GENUINE AND IN PERFECT ORDER. IN THE LIGHT OF ALL THESE EVIDENC E, THERE IS NO DOUBT IN HOLDING THAT THE EXPENSES OF RS. 47,47,188/- CLAIMED BY APP ELLANT ARE GENUINE AND ALLOWABLE EXPENDITURE. THE OBJECTIONS RAISED BY AO ARE INSIGNIFICANT AND GENERAL AND DO NOT AFFECT THE MERIT OF CLAIMING THE EXPENDITURE BY APPELLANT. IN VIEW OF THESE FACTS, I HOLD THAT AS PER THE DIRE CTIONS GIVEN BY HONBLE ITAT IN THE CASE OF APPELLANT, THE INCOME OF RS.58,57,23 9/- AND EXPENDITURE OF RS.47,47,188/- ARE VERIFIABLE AND CO-RELATED THEREF ORE THE EXPENSES CLAIMED BY APPELLANT ARE ALLOWABLE EXPENSES. I, THEREFORE, DE LETE THE ADDITION MADE BY AO AND ALLOW THE APPEAL. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE DETAILE D ORDER OF THE LD. CIT(A). IN OUR CONSIDERED VIEW, THE ITAT, IN PRINC IPLE, HAS ACCEPTED THAT THE CREDIT OF RS.58,57,239/- IN THE ASSESSEE COMPAN Y AND CORRESPONDING EXPENDITURE OF RS.47,47,188/- DEBITED TO ITS ACCOUN T BY TRANSFERRING THE SAME FROM SHIVA INDUSTRIAL SECURITY AGENCY (SISA) WHICH IS NOT DISPUTED. THE ISSUE WAS SET ASIDE BY THE ITAT FOR LIMITED PURPOSE S OF VERIFICATION OF THE INCOME AND EXPENSES. THE LD. AO, HOWEVER, RE-EXAMIN ED THE WHOLE ISSUE AND HELD AGAINST THE ASSESSEE. THE ASSESSEE HAS GI VEN DETAILED EXPLANATION AND RECONCILIATION WHICH IS VERIFIED BY LD. CIT(A) AND HELD THAT THE ITAT DIRECTION HAS BEEN DULY COMPLIED WITH. IN VIEW OF THE DETAILED FACTUAL FINDING RENDERED BY LD. CIT(A), WE SEE NO INFIRMITY IN HIS ORDER WHICH IS UPHELD AND THE APPEAL OF THE REVENUE IS ACCORDINGLY DISMISSED. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 18 TH OCTOBER, 2016 AT AHMEDABAD. SD/- SD/- (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (R.P. TOLANI) JUDICIAL MEMBER AHMEDABAD; DATED 18/10/2016 *BIJU T. ITA NO. 1132/AHD/2013 ACIT VS. SHIVA INDUSTRIAL SECURITY AGENCY PVT LTD AY : 2004-05 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD