The Dy.Commissioner of Income Tax Circle-2(1)(1), Ahmedabad V. M/s. Indian Research Manifastation Labs Pvt. Ltd., Ahmedabad

ITA 1179/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6122 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 05-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reassessment proceedings
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 1179/AHD/2016 (ASSESSMENT YEAR: 2006-07) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 2(1)(1), AHMEDABAD V/S M/S. INDIAN RESEARCH MANIFASTAION LABS PVT. LTD. IRM HOUSE, C.G. ROAD, NAVRANGPURA, AHMEDABAD-390009 (APPELLANT) (RESPONDENT) PAN: AAACI3678M APPELLANT BY : SHRI KEYUR PATEL, SR. D.R . RESPONDENT BY : SMT. URVASHI SHODHAN, A.R. ( )/ ORDER DATE OF HEARING : 07 -02-201 8 DATE OF PRONOUNCEMENT : 12-02-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-7, AHMEDABAD DATED 08.02.2016 PERTAINING TO A.Y. 2006- 07. ITA NO. 1179 /AHD/2016 . A.Y. 2006-07 2 2. THE SOLE SUBSTANTIVE GRIEVANCE OF THE REVENUE READS AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RES TRICTING THE DISALLOWANCE TO RS. 16,16,740/- IN RESPECT OF PETROL & DIESEL EXPEN SES AND DELETING THE BALANCE OF RS. 36,76,837/-, WITHOUT PROPERLY APPREC IATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD. 3. BRIEFLY STATED THE FACTS OF THE CARE THAT THE ORIGI NAL ASSESSMENT WAS FRAMED U/S. 143(3) OF THE ACT VIDE ORDER DATED 31.12.2008 AT A TOTAL INCOME OF RS. 2.23 CRORES AGAINST RETURNED INCOME OF RS. 66.92 LACS. T HE MATTER TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNAL IN ITA NO. 150 & 1033/AHD /2010 SET ASIDE THE ISSUE IN RESPECT OF DISALLOWANCE OF RS. 16,16,740/- TOWARDS PETROL AND DIESEL EXPENSES WHICH WAS INITIALLY DISALLOWED @ 20% BY TH E A.O. AND THE DISALLOWANCE WAS REDUCED TO 10% BY THE FIRST APPELL ATE AUTHORITY. 4. IN THE SECOND ROUND OF LITIGATION, THE A.O. ONCE AG AIN DISALLOWED 20% OF THE EXPENDITURE AND THE FIRST APPELLATE AUTHORITY ONCE AGAIN REDUCED THE SAME TO 10%. THE RELEVANT FINDING OF THE LD. CIT(A) READ AS UNDER:- 6.2.1 IT IS SEEN FROM THE ORIGINAL ASSESSMENT ORD ER THAT THE AO HAD CALLED FOR ONE MONTH'S BILLS AND VOUCHERS FOR VERIFICATION WHI CH HAD NOT BEEN PRODUCED BY THE APPELLANT AND HENCE HAD MADE THE DISALLOWANCE O F 20%. THIS FACT HAS BEEN NOTED BY THE HON'BLE ITAT AS WELL IN ITS ORDER. IT IS SEEN THAT DURING RE-ASSESSMENT PROCEEDINGS, THE AO HAS SOUGHT BILLS AND VOUCHERS F OR THE ENTIRE YEAR FOR VERIFICATION. THE ISSUE WAS OF SAMPLE VERIFICATION OF ONE MONTH'S BILLS AND VOUCHERS WHICH WAS COMPLIED WITH BY THE APPELLANT D URING REASSESSMENT PROCEEDINGS. MOREOVER, PRODUCTION OF THE WHOLE YEAR 'S BILLS AND VOUCHERS WOULD ACTUALLY BE EXTREMELY VOLUMINOUS AND WILL NOT SERVE ANY PURPOSE, BECAUSE ALL THE BILLS AND VOUCHERS ARE SELF-MADE. FURTHER, THIRD-PA RTY EVIDENCES AS CALLED FOR BY THE AO WERE ALSO PRODUCED BY THE APPELLANT DURING R E-ASSESSMENT PROCEEDINGS AND ALSO DURING THE APPELLATE PROCEEDINGS. MOREOVER , IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT NOTED ANY, SPE CIFIC DEFECT IN THE BILLS AND VOUCHERS PRODUCED AND THE DISALLOWANCE OF 20% IS PU RELY AN AD-HOC DISALLOWANCE ITA NO. 1179 /AHD/2016 . A.Y. 2006-07 3 ON ESTIMATE BASIS. NOTWITHSTANDING THESE FACTS, THE NATURE OF THESE EXPENSES CLAIMED ARE SUCH THAT THE POSSIBILITY OF THEM BEING INCURRED FOR NON BUSINESS PURPOSE IS QUITE POSSIBLE AND CANNOT BE RULED OUT. THEREFORE, IN VIEW OF THE TOTALITY OF FACTS, I AM OF THE VIEW THAT 10% DISALL OWANCE IN RESPECT OF PETROL AND DIESEL EXPENSES WOULD MEET THE END OF JUSTICE AND H ENCE DISALLOWANCE OF RS.16,16,740/- IS CONFIRMED. THE APPELLANT WILL GET RELIEF OF RS.36,76,837/-. GROUND OF APPEAL NO 2 IS PARTLY ALLOWED. 5. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW INCLUDING THE ORDERS IN THE FIRST ROUND OF LITIGATI ON. WE FIND THAT THE FIRST APPELLATE AUTHORITY HAS GIVEN THE FINDING WHICH IS IN LINE WITH THE DIRECTIONS OF THE TRIBUNAL AND AFTER VERIFYING THE NECESSARY DETA ILS AS DIRECTED BY THE TRIBUNAL IN THE FIRST ROUND OF LITIGATION. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 12 - 02- 20 18 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 12 /02/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD