Sewasons Enterprise Ltd., Gandhidham V. The Income tax Officer,Ward-8(1), Ahmedabad

ITA 1148/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0976 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: P B PARMAR
• Keywords: Rejection of books of accounts; Question of law; Corroborative evidences

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.1148/AHD/2013 / ASSTT. YEAR: 2009-2010 M/S.SEWASONS ENTERPRISES LTD. PLOT NO.356, GOKUL PARK WARD 12-B, TAGORE ROAD GANDHIDHAM PAN : AADCS 0042 C VS THE ITO, WARD-8(1) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI P.B. PARMAR REVENUE BY : SHRI DINESH SINGH, SR.DR / DATE OF HEARING : 31/06/2016 / DATE OF PRONOUNCEMENT: 01/08/2016 $%/ O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST T HE ORDER OF THE LD.CIT(A)-XIV DATED 28.2.2013 PASSED FOR THE ASSTT. YEAR 2009-10. 2. THE GROUNDS TAKEN BY THE ASSESSEE ARE NOT IN CON SONANCE WITH THE RULE 8 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 196 3 - THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. IN BRIEF, THE GRIEVAN CE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN REJECTING THE BOOKS OF ACCOUNTS AND DISALLOWANCE OF RS.3,48,870/- OUT O F TRIP EXPENDITURE AND RS.48,858/- OUT OF TRAVELLING EXPENDITURE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-CO MPANY AT THE RELEVANT TIME WAS ENGAGED IN TRANSPORTATION BUSINESS. IT HA S FILED ITS RETURN OF INCOME ELECTRONICALLY ON 12.9.2009 DECLARING TOTAL INCOME AT RS.14,92,970/-. THE ITA NO.1148/AHD/2013 2 ASSESSEE-COMPANY HAS SHOWN OPERATING TURNOVER OF RS .3,38,42,788/-. THE LD.AO HAS EXAMINED THE DETAILS OF EXPENDITURE DEBIT ED BY THE ASSESSEE. ON THE BASIS OF TEST-CHECK, HE VERIFIED THE EXPENDITUR E TO THE EXTENT OF RS.9,01,330/- DEBITED UNDER THE HEAD TRIP EXPENDITU RE AND DIESEL EXPENDITURE. THE AO FOUND DISCREPANCY OF RS.79,788/-. THESE ARE THE EXPENDITURE WHICH WERE NOT SUPPORTED BY ANY EVIDENCE. ACCORDING TO T HE AO, IN TERMS OF PERCENTAGE, DISCREPANCY COMES TO 8.85% OVER THE TOT AL SUCH EXPENDITURE. ACCORDINGLY, THE AO HAS DISALLOWED A SUM OF RS.17,3 9,100/-. 4. ON APPEAL, THE LD.CIT(A) HAS OBSERVED THAT AS FA R AS PURCHASE OF DIESEL IS CONCERNED, THERE COULD NOT BE ANY INFLATION AND THE EVIDENCE IS BEING MAINTAINED BY THE ASSESSEE. THEREFORE, OUT OF THE DIESEL EXPENDITURE, DISALLOWANCE MADE BY THE AO HAS BEEN DELETED BY THE LD.CIT(A). THE LD.CIT(A) CONFIRMED THE DISALLOWANCE AT THE RATE OF 10% OUT OF THE TRIP EXPENDITURE. THESE EXPENDITURE ARE IN THE SHAPE OF RTO EXPENSES, TOLL EXPENSES, UNLOADING EXPENSES, DRIVER BHATHA ETC. IN THIS WAY, THE LD.CIT(A) HAS CONFIRMED THE ADDITION OF RS.3,48,870/- WHICH I S BEING IMPUGNED BY THE ASSESSEE IN GROUND NO.2 BEFORE THE TRIBUNAL. 5. THE ASSESSEE HAD DEBITED A SUM OF RS.1,84,103/- UNDER THE HEAD TRAVELLING EXPENSES. ON VERIFICATION OF RECORD, TH E LD.AO FOUND A SUM OF RS.48,858/- WAS DEBITED BY THE ASSESSEE WITH REGARD TO GOA TRIP, WHICH WAS UNDERTAKEN IN JULY, 2008. THE ASSESSEE COULD NOT P RODUCE ANY SUPPORTING EVIDENCE. MOREOVER, THE ASSESSEE HAS NO BUSINESS C ONNECTION WITH GOA. THE LD.AO HAS DISALLOWED THE CLAIM OF THE ASSESSEE TO T HIS EXTENT. ON APPEAL, THE LD.CIT(A) CONFIRMED THE DISALLOWANCE. ITA NO.1148/AHD/2013 3 6. BEFORE ME, THE LD.COUNSEL FOR THE ASSESSEE SUBMI TTED THAT NATURE OF EXPENDITURE UNDER THE HEAD TRIP EXPENSES IS OF SUCH THAT THE ASSESSEE COULD NOT MAINTAIN COMPLETE RECORD. IT IS QUITE DIFFICULT FO R THE DRIVERS TO KEEP THE RECEIPTS OF TOLL EXPENSES, LOADING AND UNLOADING EX PENSES WHERE THE LABOURERS WERE HIRED AT OUTSTATION PLACES. THEREFORE, DISALL OWANCE TO THE EXTENT OF 10% IS ON HIGHER SIDE. HE FURTHER CONTENDED THAT IN TH E ASSTT.YEAR 2007-08, THE TRIP AND DIESEL EXPENDITURE WAS RS.1,25,09,666/- AN D THE TRIBUNAL HAS CONFIRMED THE ADDITION OF RS.1,00,000/-. WITH REGARD TO THE DISALLOWANCE OF RS.48,858/- IS C ONCERNED, ON THE STRENGTH OF THE HONBLE GUJARAT HIGH COURT DECISION IN THE CASE OF SAYAJI IRON & ENGG. CO. VS. CIT, 253 ITR 749 (GUJ), HE CONTENDE D THAT THERE CANNOT BE ANY PERSONAL ELEMENT IN ANY OF THE EXPENDITURE INCU RRED BY A COMPANY, AND THEREFORE, NO DISALLOWANCE COULD BE MADE. 7. THE LD.DR, ON THE OTHER HAND, CONTENDED THAT IN THIS YEAR, TOTAL EXPENDITURE DEBITED BY THE ASSESSEE UNDER DIESEL AN D TRIP EXPENDITURE WAS OF RS.1.93 CRORES I.E. ALMOST 30% MORE. THE LD.CIT(A) HAS ALREADY DELETED THE DISALLOWANCE OUT OF THE DIESEL EXPENDITURE. THE A SSESSEE COULD EASILY MAINTAIN THE RECORD FOR TOLL TAXES, FINE PAID TO TH E RTO ETC. AS FAR AS ANY AMOUNT INCURRED BY THE ASSESSEE IN VIOLATION TO EXPLANATION-I TO SECTION 37, THEN, SUCH AMOUNT CANNOT BE CLAIMED AS DEDUCTION. THUS, THIS PLEA OF THE ASSESSEE CANNOT BE ENTERTAINED. WITH REGARD TO SECOND DISALLOWANCE, HE CONTENDED T HAT THE EXPENDITURE WAS NOT INCURRED FOR THE PURPOSE OF BUSINESS. 8. I HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GON E THROUGH THE RECORD CAREFULLY. AS FAR AS REJECTION OF THE BOOKS OF ACC OUNTS IS CONCERNED, THIS ITA NO.1148/AHD/2013 4 ASPECT HAS NOT BEEN SERIOUSLY DISPUTED BY THE ASSES SEE BEFORE ME. MORE SO, THE AO POINTED OUT SPECIFIC DEFECTS IN THE DETAILS MAINTAINED BY THE ASSESSEE WHICH HAD PREVENTED HIM TO DEDUCE THE TRUE INCOME O F THE ASSESSEE. THUS, THE AO HAS REJECTED THE BOOKS OF ACCOUNTS. AS FAR AS QUANTIFICATION OF DISALLOWANCE IS CONCER NED, THE AO HAS QUANTIFIED THE DISALLOWANCE AT 9% AFTER POINTING OU T SPECIFIC DEFECTS IN THE DETAILS MAINTAINED BY THE ASSESSEE OF THE EXPENDITU RE CLAIMED. THE LD.CIT(A) HAS EXAMINED THE ISSUE, AND THEREAFTER OBSERVED THA T OUT OF TRIP EXPENDITURE, THE ADDITION IS TO BE MADE TO THE EXTENT OF 10%. ON DUE CONSIDERATION OF THE MATERIAL ON RECORD, INCLUDING THE ARGUMENTS OF THE ASSESSEE THAT IN EARLIER ASSESSMENT YEAR, A LUMPSUM DISALLOWANCE AT RS.1,00,000/- WAS CONFIRMED BY THE TRIBUNAL, I AM OF THE VIEW THAT QUANTIFICATION OF DISALLOWANCE DOES NOT INVOLVE ANY QUESTION OF LAW. IT IS DEPENDENT UPON THE FACTS AND CIRCUMSTANCES IN A PARTICULAR YEAR. THE REVENUE AUTHORITIES HAVE QUANTIFIED THE DISALLOWANCE AT RS.3,48,870/- ON AN ANALYSIS OF THE DETAILS OF THE EXPENDITURE PRODUCED BY THE ASSESSEE. ONCE AN ESTIMATED OPINIO N IS BEING TAKEN BY AN AUTHORITY, THEN, THAT OPINION OUGHT NOT TO BE INTER VENED BY THE HIGHER APPELLATE AUTHORITY UNLESS IT IS DEMONSTRATED THAT SUCH OPINI ON IS BASED ON CONSIDERATION OF IRRELEVANT MATERIAL. NO SUCH FACTS HAVE BEEN BR OUGHT TO MY NOTICE. THEREFORE, I DO NOT SEE ANY JUSTIFICATION FOR INTER FERING IN THE ORDER OF THE LD.CIT(A) AS FAR AS CONFIRMATION OF DISALLOWANCE OF RS.3,48,870/- IS CONCERNED. WITH REGARD TO SECOND DISALLOWANCE, THE ARGUMENT O F THE ASSESSEE IS THAT IN CASE OF A COMPANY, THERE CAN BE NO PERSONAL ELEMENT IN ANY OF THE EXPENDITURE INCURRED. THE QUESTION IS WHETHER THE EXPENDITURE WAS INCURRED FOR THE BUSINESS PURPOSE OF THE COMPANY. IF NOT, T HEN, IT COULD NOT BE ALLOWED. ITA NO.1148/AHD/2013 5 IN THE CASE OF SAYAJI IRON & ENGG. CO. (SUPRA) DISA LLOWANCE WAS MADE OUT OF THE TELEPHONE EXPENDITURE UNDER THE BELIEF THAT SUC H FACILITY MIGHT HAVE BEEN USED BY THE EMPLOYEES OF THE COMPANY FOR PERSONAL P URPOSE. HERE IN THE PRESENT CASE, THE LD.AO HAS BROUGHT ON RECORD THAT NO BUSINESS VISIT WAS REQUIRED TO BE UNDERTAKEN AT GOA, AND THEREFORE, T HE EXPENDITURE CANNOT BE DEBITED IN THE ACCOUNTS OF THE ASSESSEE. I DO NOT FIND ANY MERIT IN THIS GROUND. IT IS REJECTED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE COURT ON 1 ST AUGUST, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/08/2016