M/s Wonderland Amusements Park Private Limited, Jalandhar V. The Joint Commissioner of Income Tax, Jalandhar

ITA 12/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0565 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.12(ASR)/2015 ASSESSMENT YEAR:2009-10 PAN: AADCM3296J M/S. WONDERLAND AMUSEMENT PARK PVT. LTD. VS. ADDL. C.I.T. G.T.ROAD, JALANDHAR. RANGE-3, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH.SANDEEP VIJH, CA RESPONDENT BY: SH.BHAWANI SHANKER, DR DATE OF HEARING: 27/06/2016 DATE OF PRONOUNCEMENT: 11/07/2016 ORDER PER A.D. JAIN, JM: THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2009-10, AGAINST THE ACTION OF THE LD. CIT(A) IN SUSTAINING THE DISALLOWANCE OF RS.1,77,662/- @ 20% OF THE STAFF WELFARE EXPENSES, OUT OF TOTAL DISALLOWANCE OF RS.3,51,345/- OUT OF EXPENSES CLAIM ED UNDER FOUR HEADS INCLUDING STAFF WELFARE EXPENSES. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE COM PANY, WHICH IS RUNNING AN AMUSEMENT PARK UNDER THE NAME AND STYLE OF M/S. WONDERLAND AMUSEMENT PARKAS PVT. LTD., FILED ITS RE TURN OF INCOME ON ITA NO.12(ASR)/2015 A.Y. 2009-10 2 29..09.2010 DECLARING AN INCOME OF RS.33,17,970/-. HOWEVER, THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 29.11.2011 AT AN ASSESSED INCOME OF RS.36,69, 320/-. WHILE COMPLETING THE ASSESSMENT, THE AO MADE AN ADDITION OF RS.3,51,545/- TO THE RETURNED INCOME OF THE ASSESSEE ON ACCOUNT OF D ISALLOWANCE OUT OF TELEPHONE AND POSTAGE EXPENSES, SALE PROMOTION EXPE NSES, STAFF WELFARE EXPENSES AND PACKING MATERIAL EXPENSES. THE AO MADE THE DISALLOWANCE AS HE NOTICED THAT SOME OF THE VOUCHERS IN RESPECT OF THE ABOVE MENTIONED EXPENSES WERE EITHER SELF MADE, OR NOT PR OPERLY VOUCHED. 3. ON APPEAL, THE LD. CIT(A) CONFIRMED THE DISALLOW ANCE. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT THE DISALLOWANCE IS UNSUSTAINABLE, BEING BASED ON THE OBSERVATION MADE THAT SOME OF THE VOUCHERS PERTAINING TO THE EXPENSE S WERE SELF MADE OR NOT PROPERLY VOUCHED, WITHOUT ANY INSTANCE HAVING B EEN POINTED OUT FOR THE DISALLOWANCE; AND THAT THE CASE IS THAT OF A CO MPANY WHERE COMPLETE BILLS/VOUCHERS WERE MAINTAINED AND THAT BESIDES STA TUTORY AUDIT, EVEN AUDIT UNDER SECTION 44AB OF THE ACT WAS CARRIED OU T AND THE REPORT WITH REGARD TO WHICH WAS FILED BEFORE THE AO. 5. THE AO MADE THE DISALLOWANCE BY OBSERVING THAT S OME OF THE VOUCHERS REGARDING EXPENSES WERE EITHER SELF MADE OR NOT PROPERLY ITA NO.12(ASR)/2015 A.Y. 2009-10 3 VOUCHED. THE LD. CIT(A) CONFIRMED THE DISALLOWANCE BY OBSERVING AS FOLLOWS: HOWEVER, I FEEL THAT THERE MAY BE SOME EXPENSES W HICH ARE OF PERSONAL IN NATURE EMBEDDED IN STAFF WELFARE EXPENS ES. I AM OF THE OPINION THAT ASSESSING OFFICER IS JUSTIFIED IN MAKI NG DISALLOWANCE @ 20% OUT OF THESE EXPENSES. 6. HENCE, OBVIOUSLY, THE ORDER PASSED BY THE LD. CI T(A) IS IN OBLIVION TO THESE FACTS AS CANVASSED, I.E., THE CASE OF THE COMPANY WHERE COMPLETE DETAILS/VOUCHERS HAVE BEEN MAINTAINED; AND THAT NO SINGLE INSTANCE JUSTIFYING THE DISALLOWANCE WAS POINTED OUT BY THE AO, OR EVEN BY THE LD. CIT(A). HEREIN, BESIDES STATUTORY AUDIT, AUDIT UNDE R SECTION 44AB OF THE ACT WAS CARRIED OUT AND THE REPORT WITH REGARD THER ETO WAS SUBMITTED BEFORE THE AO. 7. THEN, SIMILAR DISALLOWANCE STANDS DELETED BY THE TRIBUNAL IN THE CASES OF M/S. NATASHA ELECTRONICS, THE STRAWBOARD MANUFACTURING CO. LTD. AND RAJINDER MOHINDRU IN ITA NOS.191 & 107 (ASR)/2001 & 1999, DATED 07.04.2005. 6. FURTHER, THE LD. CIT(A) HAS CONFIRMED THE DISALL OWANCE ON MERE ASSUMPTIONS AND PRESUMPTIONS, WHEN HE EMPLOYED THE EXPRESSION MAY BE IN THE AFORE-QUOTED RELEVANT PORTION OF THE IMP UGNED ORDER. THUS, THE ORDER UNDER APPEAL IS BASED, IN THE FACE OF THE AFO RE-DISCUSSED FACTS, MERELY ON SURMISES AND CONJECTURES, WHICH IS UNSUST AINABLE IN LAW. ITA NO.12(ASR)/2015 A.Y. 2009-10 4 7. IN VIEW OF THE ABOVE, THE GRIEVANCE OF THE ASSES SEE IS ACCEPTED AND AS SUCH, THE ORDER OF THE LD. CIT(A) IS REVERSED. 8. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/07/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 11/07/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. WONDERLAND AMUSEMENT PARK PVT. LT D. 2. THE ADDL. CIT, R-3, JALANDHAR 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.