M/s. Asian Industries., Ahmedabad V. ITO ,Ward-3(2)(2), Ahmedabad

ITA 1236/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2775 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 14-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NK GOEL
• Assessee Lawyers: ASHISH B KHANDHAR
• Section: 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I KUL BHARAT , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M/S. ASIAN INDUSTRIES, 58, DEVRAJ INDUSTRIAL PARK, PIPLAJ, AHMEDABAD - 382405 PAN: AAUFA5753E (APPELLANT) VS THE IT O , WARD - 3 ( 2)(2 ) , AHMEDABAD - 3800015 (RESPONDENT) REVENUE BY : S H RI N.K. GOEL , SR. D . R. ASSESSEE BY: SHRI ASHISH B. KHANDHAR , A.R. DATE OF HEARING : 27 - 0 2 - 2 020 DATE OF PRONOUNCEMENT : 28 - 02 - 2 020 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - TH IS ASSESSEE S APPEAL FOR A.Y. 2014 - 15 , ARI SES FROM ORDER OF THE CIT(A) - 3, AHMEDABAD DATED 21 - 03 - 2 018 , IN PROCEEDINGS UNDER SECTION 1 4 3(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS FILED AGAINST THE DECISION OF LD. CIT(A) IN SUSTAINING THE ADDITION OF RS. 2 , 16 , 390/ - BEING 15% OF PRELIMINARY EXPENSES ON ADHOC BASIS. I T A NO . 1236 / A HD/20 18 A SS ESSMENT YEAR 2014 - 15 I.T.A NO. 1236 /AHD/20 18 A.Y. 2014 - 15 PAGE NO M/S. ASIAN INDUSTRIES VS. IT O 2 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLARING INCOME OF RS. 1 , 01 , 561/ - WAS FILED ON 30TH SEP, 2014. THE CASE WAS SUBJECT T O SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 31 ST AUGUST, 2015. DURING THE COURSE OF ASSESSMENT, ON VERIFICATION, THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS CLAIMED WRITE OFF PRELIMINARY EXPENSES OF RS. 14 , 42 , 602/ - . L O OKING TO THE NATURE OF EXPENSES, T HE ASSESSING OFFICER HAS DISALLOWED 15% OF SUCH EXPENSES TO THE AMOUNT OF RS. 2 , 16 , 390/ - AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS BROUGHT TO THE NOTICE THAT THESE PRELIMINARY EXPENSES WERE NOT INCURRED DURING THE YEAR UNDER CONSIDERATION AND THE SA ME WERE INCURRED DURING THE F.Y. 2 012 - 13, THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED TO MAKE DISALLOWANCE OUT OF THE OPENING BALANCES OF PRELIMINARY EXPENSES. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 6. WE HAVE HEARD T HE RIVAL CONTENTION AND PERUSED THE MATERIAL ON RECORD. DURING THE YEAR , THE ASSESSEE HAS CLAIMED WRITE OFF PRELIMINARY EXPENSES OF R S. 1 4 , 42 , 602/ - . THE ASSESSING OFFICER HAS MADE ADHOC DISALLOWANCES OF 15% ON SUCH EXPENSES TO THE AMOUNT OF RS. 2 , 16 , 390/ - STATING THAT THESE EXPENSES WERE OF UNVERIFIABLE IN NATURE. THE LD. COUNSEL HAS CLAIMED THAT NO PRELIMINARY EXPENSES WAS INCURRED DURING THE YEAR AND I.T.A NO. 1236 /AHD/20 18 A.Y. 2014 - 15 PAGE NO M/S. ASIAN INDUSTRIES VS. IT O 3 ASSESSING OFFICER HAS INCORRECTLY MADE DISALLOWANCES OUT OF THE OPENING BALANCE OF THE PRELIMINARY EXPEN SES. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES, WE RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER TO VERIFY/EXAMINE WHETHER THESE PRELIMINARY EXPENSES INCURRED DURING THE YEAR OR IT P ERTAINED TO THE EARLIER YEARS . IF THE PRELIMINARY EXPENSES ARE NOT INCURRED DURING THE YEAR, THEN, NO DISALLOWANCE OF SUCH EXPENSES TO BE MADE. THEREFORE, THIS APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OURT ON 28 - 02 - 20 20 SD/ - SD/ - ( KUL BHARAT ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 28 /02 /2020 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,