The ITO,Vapi Ward-4, Nani Daman V. Shri Ritesh Ramesh Contractor, Nani Daman

ITA 1134/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1128 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure; Tax effect
• Section: 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD ,.., BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.1134/AHD/2013 (REVENUE) AND CO NO.215/AHD/2013 AY 2009-10 (ASSESSEE) ( / ASSESSMENT YEAR : 2009- 10) THE INCOME TAX OFFICER VAPI-WARD-4, DAMAN / VS. SHRI RITESH RAMESH CONTRACTOR 535/14, NEAR SAI KRIPA-1 NR.OLD POLICE QUARTER KATHIRLA, NANI DAMAN % ./ ./ PAN/GIR NO. : AFRPC 0242 G ( %( / APPELLANT ) .. ( )*%( / RESPONDENT AND CROSS OBJECTOR ) %(+ / APPELLANT BY : SHRI SANJAY KUMAR, SR.DR )*%(,+ / RESPONDENT BY : NONE -, / DATE OF HEARING 08/07/2016 ./0, / DATE OF PRONOUNCEMENT 14/07/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VALSAD, DAT ED 18/011/2013 FOR THE ASSESSMENT YEAR (AY)2009-10 AND THE ASSESSE E IS IN CROSS OBJECTION THEREOF. ITA NO.1134/AHD/2013(BY REVENUE) AND CO NO.215/AHD/2013 (BY ASSESSEE) ITO VS. SHRI RITESH RAMESH CONTRACTOR ASST.YEAR 2009-10 - 2 - 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- 2.1. ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED IN THE BUSINESS OF RUNNING AUTOMOBILE SHOP BY NAME SHEETAL AUTO. A SSESSEE FILED HIS RETURN OF INCOME FOR AY 2009-10 ON 12/10/2009 DECLA RING TOTAL INCOME OF 2,94,520/-. THE CASE WAS SELECTED FOR SCRUTINY. TH E ASSESSING OFFICER (AO) NOTED THAT ASSESSEE WAS ISSUED VARIOUS NOTICES U/S.143(2) AND 142(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') WHICH REMAINED UNCOMPLIED BY THE ASSESSEE. H E THEREFORE FRAMED ASSESSMENT U/S.144 OF THE ACT VIDE ORDER DATED 16/1 2/2011 AND DETERMINED THE TOTAL INCOME AT RS.32,83,800/-. AGG RIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.C IT(A), WHO VIDE ORDER DATED 18/01/2013 (IN APPEAL NO.CIT(A)/VLS/47/11-1 2) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GR OUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, A ND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF 25,51,907/- MADE ON ACCOUNT OF UN-EXPLAINED CASH DEPOSITS IN BANK AND N OT CONSIDERED THE FACT THAT THE ASSESSEE COULD NOT FURNISH THE MATERI AL EVIDENCES REGARDING CASH DEPOSIT OF IN HIS FAVOUR DURING THE COURSE OF ASSESSMENT PROCEEDING. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, A ND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON A CCOUNT OF DISALLOWANCE CREDITORS OF 41,050/- AND DID NOT CONSIDER THE FACT THAT ITA NO.1134/AHD/2013(BY REVENUE) AND CO NO.215/AHD/2013 (BY ASSESSEE) ITO VS. SHRI RITESH RAMESH CONTRACTOR ASST.YEAR 2009-10 - 3 - THE ASSESSEE COULD NOT FURNISH THE MATERIAL EVIDENC ES IN HIS FAVOUR DURING THE COURSE OF ASSESSMENT PROCEEDING. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF 1,50,794/- MADE ON ACCOUNT OF REFUND ON COMMISSION AND DID NOT CONSIDE R THE FACT THAT THE ASSESSEE COULD NOT FURNISH THE MATERIAL EVIDENCES I N HIS FAVOUR DURING THE COURSE OF ASSESSMENT PROCEEDING. 2.2. IN CROSS OBJECTION, THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS:- (1) ITO HAS ERRED IN LAW AND ON FACTS TO ADD ON AMOUNT OF RS.1,95,694/- DISALLOWING 50% OF BUSINESS EXPENSES CLAIMED OF RS.3,91,388/- AS STATED IN PARA (3) OF ASSESSMENT O RDER DT:16/12/2011ON ADHOC AND PRESUMPTIVE BASIS. LEARNED CIT (APPEALS) HAS ALSO ERRED IN LAW AND ON FACTS TO CONFIRM ITO'S ACTION. (2) APPELLANT WAS SUFFERING FROM SPINAL PAIN SINC E DT.10/07/2013 TO DT.30/11/2013 AND WAS UNDER MEDICAL TREATMENT. APPE LLANT WAS ADVISED COMPLETE BED REST UP TO DT.30/11/2013. THEREFORE DE LAY IN FILING CROSS APPEAL IN ITA NO. 1134/AHD/2013 FILED BY ITO ON DT. 23/04/2013 AND INTIMATION OF FILING APPEAL BY THE DEPARTMENT DT. 2 2-6-2013 AND C.O. TO BE FILED COULD NOT BE FILED WITHIN STIPULATED TIME. FILING OF C.O. DELAYED IS PRAYED TO BE CONDONED. 1 MEDICAL CERTIFICATE SHALL BE PRODUCED ON THE DATE OF HEARING OF APPEAL AND C.O. 3. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT APPLICATION HAS BEEN FILED THOU GH THE NOTICE OF HEARING WAS SERVED UPON ASSESSEE. WE THEREFORE PRO CEED TO DISPOSE OF THE REVENUES APPEAL EX-PARTE QUA THE ASSESSEE. ITA NO.1134/AHD/2013(BY REVENUE) AND CO NO.215/AHD/2013 (BY ASSESSEE) ITO VS. SHRI RITESH RAMESH CONTRACTOR ASST.YEAR 2009-10 - 4 - 4. BEFORE US, AT THE OUTSET, THE LD. SR.D.R. FAIRL Y ADMITTED THAT THE TAX EFFECT ON THE IMPUGNED ADDITIONS RAISED IN REVENUE S APPEAL IS LESS THAN THE LIMIT PRESCRIBED BY THE CBDT CIRCULAR OF 10/12/ 2015 BEARING NO. 21 OF 2015 AND THEREFORE THE APPEAL BE DECIDED ACCORDI NGLY. 4.1. WITH RESPECT TO ASSESSEES CROSS OBJECTION, LD .SR.DR SUPPORTED THE ORDERS OF AO & LD.CIT(A). 5. WE HAVE HEARD THE LD.SR.DR AND PERUSED THE MATER IALS AVAILABLE ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED B Y THE REVENUE, WE FIND THAT REVENUE IS AGGRIEVED BY THE ORDER OF LD. CIT(A) IN RESPECT OF THE RELIEF GIVEN BY HIM. AS PER THE ANNOUNCEMENT OF CENTRAL BOARD OF DIRECT TAXES (CBDT) DATED 10/12/2015 (CIRCULAR NO. 21 OF 2015), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF G IVEN BY LD. CIT(A) BEFORE THE INCOME TAX TRIBUNAL UNLESS THE TAX EFFEC T, EXCLUDING INTEREST EXCEEDS RS. 10 LACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS. IN THE PRES ENT CASE, SINCE IT IS AN UNDISPUTED FACT THAT ON THE ADDITIONS WHICH ARE IN DISPUTE, THE TAX EFFECT IS LESS THAN RS. 10 LACS AND IN THE ABSENCE OF ANY MAT ERIAL ON RECORD BY THE REVENUE TO DEMONSTRATE THAT THE ISSUE IN THE PRESEN T APPEAL IS COVERED BY EXEMPTIONS SPECIFIED IN CLAUSE (8) OF THE AFORESAID CBDT CIRCULAR, WE ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INSTRUCTIONS OF THE AFORESAID CBDT CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEAL OF ITA NO.1134/AHD/2013(BY REVENUE) AND CO NO.215/AHD/2013 (BY ASSESSEE) ITO VS. SHRI RITESH RAMESH CONTRACTOR ASST.YEAR 2009-10 - 5 - THE DEPARTMENT AND THEREFORE THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. IN SUCH CIRCUMSTANCES, W E DISMISS THE APPEAL OF REVENUE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CASE. HOWEVER, IN CASE THERE IS ANY ERROR IN THE COMPUTAT ION OF THE TAX EFFECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT C IRCULAR IS NOT APPLICABLE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVIVAL OF THE APPEAL. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 7. NOW WE TAKE UP ASSESSEES CROSS OBJECTION NO.215 /AHD/2013 FOR AY 2009-10. 7.1. THE REGISTRY HAS INFORMED THAT THE CROSS OBJEC TION HAS BEEN FILED LATE BY 144 DAYS. BEFORE US, THERE IS NO APPLICATI ON FILED BY THE ASSESSEE FOR CONDONATION OF DELAY. HOWEVER, IN THE GROUNDS OF APPEAL, WE FIND THAT ASSESSEE HAS SUBMITTED THAT THE DELAY WAS ON A CCOUNT OF MEDICAL TREATMENT AS HE WAS ADVISED COMPLETE BED-REST. CON SIDERING THE AFORESAID REASONS, WE CONDONE THE DELAY IN FILING T HE CROSS OBJECTION AND ADMIT THE CROSS OBJECTION AND TAKE UP THE GROUNDS O N MERITS. 8. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTICED THAT ASSESSEE HAD CLAIMED EXPENSES OF RS.3,91,388/-. IN THE ABSENCE OF ANY DETAILS OF THE EXPENSES OR THE COPY OF THE BILLS/VO UCHERS, LEDGERS, ETC. AO ITA NO.1134/AHD/2013(BY REVENUE) AND CO NO.215/AHD/2013 (BY ASSESSEE) ITO VS. SHRI RITESH RAMESH CONTRACTOR ASST.YEAR 2009-10 - 6 - CONCLUDED THAT THE EXPENSES REMAINED UNVERIFIABLE A ND HE ACCORDINGLY DISALLOWED 50% OF THE EXPENSES AMOUNTING TO RS.1,95 ,694/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEF ORE THE LD.CIT(A), WHO UPHELD THE ORDER OF AO BY HOLDING AS UNDER:- 6.3. DECISION : I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS OF THE AO IN THE ASSESSMENT ORDER AS WELL AS THE CO NTENTION RAISED BY THE AR OF THE APPELLANT IN THE WRITTEN SUBMISSIO N. I AM IN AGREEMENT WITH THE AO THAT THE LD.AR FAILED TO SUBM IT DETAILS REGARDING VARIOUS EXPENDITURE. THE ACCOUNT OF THE APPELLANT WAS NOT STATUTORILY AUDITED AND IN THE ABSENCE OF BILLS /VOUCHERS, ETC. THE BOOK RESULT CANNOT BE ACCEPTED. SINCE THE APPELLAN T FAILED TO SUBSTANTIATE THE EXPENSES WITH NECESSARY DOCUMENTAR Y EVIDENCES, THE AO IS WITHIN HIS RIGHT TO MAKE SUCH ADHOC DISAL LOWANCES. THIS GROUND OF APPEAL IS DISMISSED. 9. WE HAVE HEARD THE LD.SR.DR, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. WE FIND THAT BEFORE THE AO ASSESSEE HAD NOT FURNISHED ANY DETAIL S OF THE EXPENSES AND THE ASSESSMENT WAS FRAMED BY THE AO U/S.144 OF THE ACT. WE ALSO FIND THAT THE LD.CIT(A) WHILE UPHOLDING THE ADDITION HAS NOTED THAT THE ACCOUNTS OF THE ASSESSEE WAS NOT STATUTORILY AUDITE D NOR HE HAD FURNISHED ANY VOUCHERS/BILLS, ETC. IN SUPPORT OF THE EXPENSES AND THEREFORE ASSESSEE HAD FAILED TO SUBSTANTIATE THE EXPENSES WITH NECESS ARY DOCUMENTARY EVIDENCES. IN SUCH A SITUATION AND IN THE ABSENCE OF ANY MATERIAL TO CONTROVERT THE FINDING OF AO AND LD.CIT(A), WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A). THUS TH IS GROUND OF ASSESSEES ITA NO.1134/AHD/2013(BY REVENUE) AND CO NO.215/AHD/2013 (BY ASSESSEE) ITO VS. SHRI RITESH RAMESH CONTRACTOR ASST.YEAR 2009-10 - 7 - CROSS OBJECTION IS DISMISSED AND THE CROSS OBJECTIO N OF ASSESSEE IS DISMISSED. 10. IN THE COMBINED RESULT, REVENUES APPEAL AND AS SESSEES CROSS OBJECTION ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 14 /0 7 /2016 SD/- SD/- .. () () ( S.S. GODARA ) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 14/ 07 /2016 4..,.../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )*%( / THE RESPONDENT. 3. 567 8 / CONCERNED CIT 4. 8 ( ) / THE CIT(A)-VALSAD 5. 9:) 67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <=- / GUARD FILE. / BY ORDER, *9 ) //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 8.7.16 (DICTATION-PAD 9- P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.7.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.14.7.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14.7.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER