ITO,Ward-8(3), Kolkata, Kolkata V. M/s. Preeti Vanijya(P)Ltd, Kolkata

ITA 1173/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78396 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 09-08-2012
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU CITSR
• Assessee Lawyers: J M THARD
• Keywords: Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SRI P.K.BANSAL, AM & HONBLE SRI GEORGE MATHAN, JM] ITA NO.1173/KOL/2012 ASSESSMENT YEAR : 2006-07 ( APPELLANT ) - (RESPONDENT) I.T.O., WARD-8(3), M/S.PREETI VANIJYA PVT.LTD. KOLKATA -VERSUS- KOLKATA (PAN : AABCP 4937 F) FOR THE APPELLANT: SHRI DAVID Z.CHAWNGTHU, ADDL.CIT,SR.DR FOR THE RESPONDENT: SHRI J.M.THARD, ADVOCATE DATE OF HEARING : 25.07.2014 DATE OF PRONOUNCEMENT : 25.07.2014. / ORDER PER SHRI P.K.BANSAL, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-VIII, KOLKATA DATED 21.05.2012 FOR A.YR.2006-07 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS :- 1. FOR THAT THE LD. CIT(APPEAL) IS ERRED IN LAW A S WELL AS FACTS IN ALLOWING RS.3,00,000/- ON ACCOUNT OF SALARY PAID DISALLOWED IN THE ASSESSMENT OUT OF TOTAL AMOUNT OF RS.3,16,835/-. 2. FOR THAT THE LD. CIT(APPEAL) IS ERRED IN LAW AS WELL AS FACTS IN ALLOWING RS.4,17,602/ ON ACCOUNT OF LEGAL AND PROFESSIONAL EXPENSES RELAT ED TO AGRICULTURAL ACTIVITIES. 3. FOR THAT THE LD.CIT(APPEAL) IS ERRED IN LAW AS W ELL AS FACTS IN VIOLATING THE PROVISIONS OF RULE 46A(3) BY ALLOWING RS.20,24,200/ - ON ACCOUNT OF UNSUPPORTED LIABILITY BOGUS AND UNRELATED LIABILITY BOOKED AS F RESH EVIDENCE FURNISHED BY THE ASSESSEE WAS ADMIRED OUT GRANTS OF OPPORTUNITY TO T HE A.O. 4. FOR THAT THE LD. CIT(APPEAL) IS ERRED IN LAW AS WELL AS FACTS IN VIOLATING THE PROVISIONS OF RULE 46A(3) BY ALLOWING RS.28,198/- O N ACCOUNT OF AUDITORS FEES AS FRESH EVIDENCE FURNISHED BY THE ASSESSEE WAS ADMIRED WITH OUT GRANTS OF OPPORTUNITY TO THE A.O. 2. SO FAR AS GROUND NO.1 IS CONCERNED AFTER HEARIN G THE RIVAL SUBMISSIONS, WE NOTED THAT THE AO DISALLOWED A SUM OF RS.3,00,000/- TO THE EMPLOYEES THAT THE ASSESSEE HAS NOT DEDUCTED PROFESSIONAL FEES PRESUMI NG THAT EMPLOYEES ARE POSTED AT MUMBAI WHILE EMPLOYEES WERE POSTED AT DELHI AS NO P ROFESSIONAL TAX IS LEVIABLE AT DELHI. WHEN THE MATTER WENT BEFORE LD. CIT(A) THE L D. CIT(A) AFTER VERIFYING THE ITA NO.1173/KOL/2012 M/S.PR EETI VANIJYA PVT.LTD. A.YR.2006-07 2 REPORT DELETED THE DISALLOWANCE. IN OUR OPINION, NO N PAYMENT OF PROFESSIONAL TAX CANNOT BE THE BASIS FOR DISALLOWING THE EXPENDITURE . ONCE THE EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS THE BUSINESS EXIGENCY REQUIRED THE ASSESSEE TO INCUR SUCH EXPENSES AND THE EXPENDITURE IS NEITHER PERSONAL NOR CAPITAL EXPENDITURE WHICH HAS BEEN ALLOWED. WE THEREFORE DISMISS GROUND NO.1 TAKEN BY THE REVENUE. 3. IN RESPECT OF GROUND NO.2 TAKEN BY THE REVENUE, WE NOTED THAT AFTER HEARING THE RIVAL SUBMISSIONS THE AO DISALLOWED PART OF THE LEGAL EXPENSES. THE ASSESSEE HAS INCURRED LEGAL AND PROFESSIONAL EXPENSES OF RS.7,36 ,064/- OUT OF WHICH A SUM OF RS.4,51,377/ WAS INCURRED FOR INCOME TAX, AMALGAMAT ION MATTER AND OTHER COURT RECOVERY MATTERS. WHILE A SUM OF RS.2,84,687/- HAS BEEN INCURRED FOR LAND DEVELOPMENT MATTERS. THE ASSESSEE HAS GIVEN DETAILS IN RESPECT OF THE EXPENSES SO INCURRED. THE LD. CIT(A), IN OUR OPINION, WAS FAIR ENOUGH TO ALLOW A SUM OF RS.4,17,602/- OUT OF THE AFORESAID LEGAL EXPENSES D ISALLOWED BY THE AO AS THESE EXPENSES WERE REVENUE EXPENDITURE AND INCURRED FOR THE PURPOSE OF THE BUSINESS. THEREFORE, IN OUR OPINION, GROUND NO.2 TAKEN BY THE REVENUE DOES NOT HAVE ANY MERIT. WE DISMISS THE SAME. 4. SO FAR AS GROUND NOS.3 AND 4 ARE CONCERNED AFTER HEARING THE RIVAL SUBMISSIONS WE NOTED THAT IN THIS CASE ON THIS GROUND THE REVEN UE HAS TAKEN A PLEA THAT THE LD.CIT(A) HAD VIOLATED RULE 46A(3) OF THE ACT AS FR ESH EVIDENCES FURNISHED BY THE ASSESSEE WERE ADMITTED BY THE LD. CIT(A) WITHOUT GI VING AN OPPORTUNITY TO THE AO. EVEN THOUGH THE LD. DR BEFORE US VEHEMENTLY CONTEND ED THAT HE RELIED ON THE ORDER OF AO BUT COULD NOT PRODUCE TO OUR KNOWLEDGE WHAT FRES H EVIDENCES WERE FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT(A) ON THE BASIS OF WHICH THE LD. CIT(A) HAS ALLOWED RELIEF TO THE ASSESSEE. WE HAVE DEALT WITH THE MATT ER OF THE LD. CIT(A) AND WE DO NOT FIND ANY FRESH EVIDENCE SUBMITTED BY THE ASSESSEE. IN RESPECT OF BOTH THESE GROUNDS WE, THEREFORE, ARE OF THE OPINION THAT BOTH THESE G ROUNDS HAVE NO LEGS TO STAND IN THE EYES OF LAW. AS THE ASSESSEE HAS NOT FURNISHED FRES H EVIDENCES THERE IS NO VIOLATION OF RULE 46A. ITA NO.1173/KOL/2012 M/S.PR EETI VANIJYA PVT.LTD. A.YR.2006-07 3 5. IN THE RESULT THE APPEAL OF THE REVENUE STANDS D ISMISSED. ORDER PRONOUNCED IN THE COURT ON 25.07.2014. SD/- SD/- [GEORGE MATHAN ] [P.K.BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 25.07.2014. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. M/S.PREETI VANIJYA PVT.LTD., 5F, EVEREST, 46/C, CHO WRINGHEE ROAD, KOLKATA- 700071. 2 I.T.O., WD-8(3), KOLKATA 3 . CIT KOLKATA 4 . CIT(A)- VIII, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES