Mahaveer Urvarak Bhandar, V. ITO,

ITA 127/LKW/2011

• Counselvise Citation: 12723714 RSA 2011
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 16-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V V SINGH
• Assessee Lawyers: J J MEHROTRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE HONBLE SHRI H.L. KARWA AND HONBLE SHRI N.K. SAINI ITA NO.127/LKW/2011 ASSESSMENT YEAR:2005-06 MAHAVEER URVARAK BHANDAR BACHHARAWAN, RAEIBAREILI V. ITO RAEBAREILY PAN:AAHFM8640F (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. J.J. MEHROTRA, C.A. RESPONDENT BY: SHRI. V. V. SINGH, D.R. O R D E R PER H. L. KARWA: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-II, LUCKNOW DATED 29.12.2010 RELATING TO ASSESSMENT YEAR 2005-06. THE ONLY GROUND RAISED BY THE ASSESSEE IN THIS APPEAL READS AS UNDER:- 1. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF ` 60,007 OUT OF FREIGHT, CARTAGE AND LABOUR CHARGES. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM IS CARRYING ON BUSINESS OF PURCHASE AND SALE OF FERTILIZER AND CEMENT ON WHOLESALE BASIS. THE DETAILED BOOKS OF ACCOUNT HAVE BEEN MAINTAINED WHEREIN ALL THE INCOMINGS AND OUTGOINGS WERE CORRECTLY RECORDED. THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE BEEN SUBJECTED TO AUDIT UNDER SECTION 44AB OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) ALSO. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER ON A NUMBER OF OCCASIONS AND WERE DULY EXAMINED BY HIM. THE ASSESSING OFFICER MADE AN ADDITION OF ` 60,007 UNDER THE HEAD CARTAGE AND LABOUR CHARGES. UNDER THIS HEAD, THE ASSESSEE HAS CLAIMED TOTAL EXPENSES AT ` 6,00,068.50. THE ASSESSING OFFICER OBSERVED THAT THE EXPENSES CLAIMED UNDER THIS HEAD WERE NOT COMPLETELY VOUCHED AND THAT MANY OF THE VOUCHERS WERE NOT HAVING SIGNATURES AND DETAILS OF EXPENSES FOR WHICH SUCH AMOUNT CLAIMED HAVE BEEN SPENT. CONSIDERING THE :-2-: ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER DISALLOWED 10% WHICH COMES TO ` 60,007 UNDER THE ABOVE HEAD. 3. ON APPEAL, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI. J.J. MEHROTRA, C.A. APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY ARGUED THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ENTIRE EXPENSES ON ACCOUNT OF FREIGHT, CARTAGE AND LABOUR CHARGES HAVE BEEN INCURRED IN THE COURSE OF CARRYING ON THE BUSINESS BY THE ASSESSEE FOR THE PURPOSES THEREOF AND ARE DULY RECORDED IN DAY-TO-DAY MAINTAINED BOOKS OF ACCOUNT AND, THEREFORE, THERE IS NO JUSTIFICATION IN CONFIRMING THE DISALLOWANCE UNDER THIS HEAD. ALTERNATIVELY IT WAS ALSO SUBMITTED BY SHRI. J. J. MEHROTRA, C.A. APPEARING ON BEHALF OF THE ASSESSEE THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) IS ON HIGHER SIDE. IT IS TRUE THAT THE EXPENSES CLAIMED UNDER THE HEAD FREIGHT, CARTAGE AND LABOUR CHARGES AMOUNTING TO ` 6,00,068.50 WERE NOT COMPLETELY VOUCHED. FURTHERMORE, MANY OF THE VOUCHERS WERE NOT HAVING SIGNATURES AND DETAILS OF THE EXPENSES FOR WHICH SUCH AMOUNT CLAIMED HAD BEEN SPENT. IN OUR VIEW, SOME DISALLOWANCE IS REQUIRED TO BE MADE UNDER THIS HEAD. AT THE SAME TIME, WE ALSO FEEL THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) IS ON HIGHER SIDE. THUS, KEEPING IN VIEW THE OVERALL FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE HOLD THAT THE DISALLOWANCE OF 5% OF THE EXPENSES CLAIMED UNDER THIS HEAD WILL MEET THE ENDS OF JUSTICE. ACCORDINGLY, THIS GROUND OF APPEAL STANDS ALLOWED PARTLY. 5. IN THE RESULT, APPEAL IS ALLOWED PARTLY. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11.7.2011. SD/- SD/- [ N. K. SAINI] [H. L. KARWA] ACCOUNTANT MEMBER VICE PRESIDENT DATED:11.7.2011 JJ:1107 :-3-: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR