Manohar Lal Bansal, Barmer V. ITO, Jaisalmer

ITA 121/JODH/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6237 (ITAT-JODHPUR)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 13-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHOK KHANNA
• Keywords: Business expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH (SMC), JODHPUR BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 121/JODH/2018 (ASSESSMENT YEAR-2014-15 MANOHAR LAL BANSAL, AGARWAL MOHALLA, BARMER. VS INCOME TAX OFFICER, JAISALMER. (APPELLANT) (RESPONDENT) PAN: AAVPB 9549 A ASSESSEE BY SHRI GAUTAM CHAND VAID (CA) REVENUE BY SHRI ASHOK KHANNA JCIT DR DATE OF HEARING 23/05/2018 DATE OF PRONOUNCEMENT 25/05/2018 O R D E R PER: R.C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-2, JODHPUR DATED 13/12/2016 FOR THE A.Y. 2014-15 IN THE MATTER OF ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED T O AS THE ACT, FOR SHORT]. THE GROUNDS RAISED BY THE ASSESSEE IN A PPEAL ARE REPRODUCED AS UNDER: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT (A) ERRED IN SUSTAINING THE AD HOC ADDITION MADE BY LD. AO FOR 1,50,000/- OUT OF TANKER EXPENSES AMOUNTING TO 53,51,379/- CLA IMED BY ASSESSEE DESPITE THE FACT THAT THE EXPENDITURE ARE FULLY VER IFIABLE. THE 2 ITA 121/JODH/2018 MANOHAR LAL BANSAL VS. ITO DISALLOWANCE MADE BY LD. AO AND SUSTAINED BY LD. CI T(A) MAY KINDLY BE DELETED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT(A) ERRED IN SUSTAINING DISALLOWANCE MADE BY LD. AO FOR 1,48, 272/- BEING 15% OF MARUTI CAR EXPENSES 55,980/-, GENERATOR EXPENSES 2 ,10,530/-, PETROL EXPENSES 1,46,025/-, PUMP EXPENSES 2,48,000/- AND S ALES PROMOTION EXPENSES 3,27,950/-. THE DISALLOWANCE MADE BY LD. A O AND SUSTAINED BY LD. CIT(A) MAY KINDLY BE DELETED. 3. THE APPELLANT CRAVE LIBERTY TO ADD, AMEND, ALTER , MODIFY, OR DELETE ANY OF THE GROUND OF APPEAL ON OR BEFORE ITS HEARING BE FORE YOUR HONOR AND ALL THE GROUND ARE WITHOUT PREJUDICE TO EACH OTHER. 4. THE APPELLANT PRAYED FOR THE JUSTICE. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS CARRYING BU SINESS OF RUNNING PETROL PUMP. THE ASSESSMENT WAS FRAMED BY T HE ASSESSING OFFICER ASSESSING TOTAL INCOME AT RS. 10, 85,150/- AS AGAINST RETURNED INCOME OF RS. 7,13,480/- MAKING FO LLOWING ADDITION/DISALLOWANCES: DISALLOWANCE ON ACCOUNT OF EXCESS SHORTAGE RS. 73, 394/- DISALLOWANCE OUT OF TANKER EXPENSES RS. 1,50,00 0/- DISALLOWANCE OF 15% OF MISC. EXP. RS. 1,48,272/ - TOTAL RS. 3,71,666/-. THE LD. CIT(A) DELETED THE DISALLOWANCE ON ACCOUNT OF EXCESS SHORTAGE AND SUSTAINED ADDITION OUT OF TANKER EXPEN SES AND 15% OF MISC. EXPENSES. 3 ITA 121/JODH/2018 MANOHAR LAL BANSAL VS. ITO 3. FROM THE RECORD I FOUND THAT THE ASSESSING OFFIC ER HAS MADE AD HOC DISALLOWANCE OF RS. 1.50 LACS OUT OF TA NKER EXPENSES BY OBSERVING THAT ALL EXPENSES OF TANKER A RE MADE IN CASH, WHICH ARE NOT VERIFIABLE. 4. IT WAS ARGUED BY THE LD AUTHORIZED REPRESENTATIV E OF THE ASSESSEE THAT THE TANKER EXPENSES DURING THE YEAR U NDER CONSIDERATION IS RS. 53,51,379/- WHICH IS LOWER THA N THE EXPENSES CLAIMED AND ALLOWED FOR A.Y. 2013-14 AMOUN TING TO RS. 55,00,389/-. IT MAY PERTINENT TO MENTION THAT A SSESSMENT FOR A.Y. 2013-14 WAS ALSO FRAMED U/S 143(3). 5. I FOUND THAT SUBSTANTIAL PORTION OF THE EXPENDIT URE IS OF DIESEL EXPENSES, WHICH HAS NO IMPACT ON THE TOTAL I NCOME AS SAME HAS NOT BEEN PAID TO OUTSIDER BUT FROM THE ASS ESSEES OWN PETROL PUMP AND SAME HAS BEEN RECOGNIZED AS REVENUE FOR PETROL PUMP. WHEN ALL VOUCHERS ARE AVAILABLE AND PR ODUCED BEFORE A.O. MERELY BECAUSE EXPENSES HAS BEEN INCURR ED IN CASH SAME CANNOT BE DISALLOWED, PARTICULARLY WHEN THE QU ANTUM OF EXPENSES CANNOT BE CONSIDERED AS UNREASONABLE. IF D IESEL EXPENSES EXCLUDED FROM TANKER EXPENSES DISALLOWANCE OF RS. 1,50,000/- WOULD BE SUBSTANTIAL PORTION OF TOTAL EX PENDITURE. 4 ITA 121/JODH/2018 MANOHAR LAL BANSAL VS. ITO THUS, KEEPING IN VIEW THE TOTALITY OF FACTS AND CIR CUMSTANCES VIS A VIS FINDING RECORDED BY THE LOWER AUTHORITIES, I CONFIRM THE DISALLOWANCE TO THE EXTENT OF RS. 25,000/-. 6. THE ASSESSING OFFICER HAS ALSO DISALLOWED 15% OF THE MISC. EXPENSES, WHICH WORKED OUT OF RS. 1,48,272/-. FROM THE RECORD, I FOUND THAT THE GENUINE BUSINESS EXPENDITURE INCUR RED BY THE ASSESSEE HAS BEEN DISALLOWED ON THE FINDING THAT SA ME HAS BEEN INCURRED IN CASH. SIMILAR DISALLOWANCE MADE IN THE A.Y. 2013-14 FOR RS. 1,50,000/- WERE RESTRICTED BY THE LD. CIT(A ) TO RS. 50,000/- AGAINST WHICH REVENUE IS NOT IN APPEAL BEF ORE THE ITAT. KEEPING IN VIEW THE TOTALITY OF FACTS AND CIR CUMSTANCES, I RESTRICT THE DISALLOWANCE TO THE EXTENT OF RS. 50,0 00/-. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 25/05/2018. SD/- [R.C. SHARMA] ACCOUNTANT MEMBER DATED : 25/05/2018 *RANJAN COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5 ITA 121/JODH/2018 MANOHAR LAL BANSAL VS. ITO 5. THE DR 6. GUARD FILE (ITA NO. 121/JODH/2018) ASSISTANT REGISTRAR JODHPUR BENCH