RISCHICHEM DISTRIBUTORS P.LTD, MUMBAI V. DCIT 3(3), MUMBAI

ITA 1171/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3528 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 26-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO. 1171/MUM/2015 (ASSESSMENT YEAR : 2011-12) RISHICHEM DISTRIBUTORS PRIVATE LIMITED, B-104/105, CITI POINT, J.B.NAGAR, NEXT TO HOTEL KOHINOOR CONTINENTAL, ANDHERI KURLA ROAD, ANDHERI(E), MUMBAI 400 059 PAN: AAACR 7573G ..... APPELLANT VS. THE DCIT 3(3), MUMBAI. .... RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI A.K.KARDAM DATE OF HEARING : 21/07/2016 DATE OF PRONOUNCEMENT : 17/08/2016 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAIN ING TO ASSESSMENT YEAR 2011-12 IS DIRECTED AGAINST AN ORD ER PASSED BY CIT(A)- 7 MUMBAI DATED 19/12/2014, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 05/03/2014. 2. THE SOLITARY ISSUE IN THIS APPEAL ARISES FROM THE ACTION OF THE CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OF FICER IN MAKING 2 ITA NO. 1171/MUM/2015 (ASSESSMENT YEAR : 2011-12) ADDITION OF RS.5,47,387/- OUT OF TRANSPORTATION CHA RGES ON AN ADHOC BASIS. 3. IN BRIEF, RELEVANT FACTS ARE THAT THE APPELLANT IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND IS, INTER-ALIA, ENGAGED IN THE BUSINESS OF TRADING IN C HEMICALS PRODUCTS AND INDENTING AGENT. IN THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD CLAIMED AN EXPE NDITURE OF RS.10,94,775/- ON TRANSPORTATION CHARGES ON SALES. AFTER CONSIDERING THE DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSIN G OFFICER OBSERVED THAT IT WAS NOT POSSIBLE TO ASCERTAIN WHETHER THE E XPENDITURE CLAIMED IS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. ACCORDINGLY, HE DISALLOWED 50% OF SUCH EXPENSES, WH ICH CAME TO A SUM OF RS.5,47,387/- THE CIT(A) HAS ALSO AFFIRMED THE ADDITION, AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. BEFORE US, PAPER BOOK HAS BEEN FILED ON BEHALF OF THE ASSESSEE WHICH CONTAIN WRITTEN SUBMISSION TO THE CIT(A). IT IS POINTED OUT THAT NO SPECIFIC INFIRMITY WAS POINTED OUT BY THE ASSESSING OFFICER FOR MAKING THE IMPUGNED ADDITION AND FURTHER THAT EVEN IN OTHE R ASSESSMENT YEARS WHERE SCRUTINY ASSESSMENT HAS BEEN DONE UNDER SECTI ON 143(3) OF THE ACT, NO SUCH ADHOC DISALLOWANCE HAS BEEN MADE OUT OF TRANSPORTATION CHARGES. IT IS ALSO EMERGING THAT COMPLETE DET AILS OF THE EXPENDITURE, PARTY WISE WAS FURNISHED, A COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGE 22, SUCH DETAILS ALSO REFLECT THE PE RMANENT ACCOUNT NUMBER OF THE RECIPIENTS; AND, THUS AS PER THE APP ELLANT THERE IS NO JUSTIFICATION FOR MAKING THE IMPUGNED ADHOC ADDITIO N. 3 ITA NO. 1171/MUM/2015 (ASSESSMENT YEAR : 2011-12) 5. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HAS MERELY PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BE LOW. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IT IS QUITE CLEAR FROM THE ORDERS OF THE AUTHORITIES BELOW THAT THE IMPUGNED DISALLOWANCE HAS BEEN MADE PURELY ON AN ADHOC BASIS WITHOUT POINTING OUT ANY SPECIFIC DEFECT IN THE CLAIM OF TR ANSPORTATION EXPENSES. IT HAS BEEN POINTED OUT THAT THE BOOKS OF ACCOUNT O F THE ASSESSEE ARE SUBJECT TO AUDIT AND THE COMPLETE DETAILS OF THE EX PENSES ARE ON RECORD. WE FIND THAT EVEN IN THE SCRUTINY ASSESSMENTS MADE FOR ASSESSMENT YEARS 2010-11 AND 2013-14 ON 18/2/2013 AND 15/1/201 6 RESPECTIVELY, NO SUCH ADHOC DISALLOWANCES HAVE BEEN MADE. IN OUR CONSIDERED OPINION, THERE IS NO JUSTIFICATION FOR THE IMPUGNED DISALLOWANCE AS IT IS BASED ON MERE CONJECTURES AND SURMISES. ACCORDINGL Y, THE SAME IS HEREBY DIRECTED TO BE DELETED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 17/08/2016 SD/- SD/- (AMARJIT SINGH) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 17/08/2016 VM , SR. PS 4 ITA NO. 1171/MUM/2015 (ASSESSMENT YEAR : 2011-12) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI