Sibram Pradhan, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-4, Surendranagar

ITA 1327/RJT/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49997 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 10-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: DR ADHIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) I.T.A. NO.1327/RJT/2010 (ASSESSMENT YEAR 2007-08) SIBRAM PRADHAN VS ITO, WD.4 C/O VAMAN PRESTRESSING CO PVT LTD SURENDRANAGAR NR. DIGSAR RAILWAY STATION VILL : GODAWARI TAL : MULI, DIST : SURENDRANAGAR PAN : AKFPP0921J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DR ADHIA RESPONDENT BY : SHRI AVINASH KUMAR O R D E R PER AL GEHLOT, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 08- 11-2010 PASSED BY THE COMMISSIONER OF INCOME-TAX(AP PEALS)-XV, AHMEDABAD FOR THE ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED IN THE APPEAL ARE IN RESPECT OF ADDITION OF RS.60,000 ON ACCOUNT OF CONTRACT LABOUR EXPENSES, RS.10,000 O UT OF KITCHEN EXPENSES AND RS.16,000 OUT OF TRAVELING EXPENSES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF LABOUR CONTRACT. ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF RS.1,54,920. ON VERIFICATION OF CONTRACT ACCOUNT, THE ASSESSING OFFICER NOTICED THAT KITCHEN EXPENSES HAD BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT BY SELF MADE VOUCHERS. THE ASSESSING OFFICER ASKED THE ASS ESSEE WHY A LUMP SUM AMOUNT OF RS.10,000 SHOULD NOT BE DISALLOWED. AFTE R CONSIDERING ASSESSEES SUBMISSIONS, THE ASSESSING OFFICER DISALLOWED RS.10 ,000 OUT OF KITCHEN EXPENSES. SIMILARLY, IT WAS NOTICED THAT THE ASSES SEE HAS ACCOUNTED FOR LABOUR ITA NO.1327/RJT/2010 2 EXPENSES. ON VERIFICATION THE ASSESSING OFFICER FO UND SOME OF THE ENTRIES WITHOUT SIGNATURE OF THE CONCERNED PERSONS AND WITHOUT FULL PARTICULARS AND ADDRESSES IN THE WAGE REGISTER. THE ASSESSING OFFICER ASKED THE ASSESSEE WHY A LUMP SUM AMOUNT OF RS.60,000 SHOULD NOT BE DISALLOWED. AFTE R CONSIDERING ASSESSEES SUBMISSION THE ASSESSING OFFICER DISALLOWED RS.60,0 00. SIMILARLY, THE ASSESSING OFFICER ALSO DISALLOWED RS.16,000 OUT OF TRAVELING EXPENSES OF RS.80,400 CONSIDERING PERSONAL ELEMENT OF EXPENDITURE. THE D ISALLOWANCE MADE BY THE ASSESSING OFFICER HAS BEEN CONFIRMED BY THE CIT(A). 4. THE LD.AR DID NOT PRESS THE GROUND RELATING TO D ISALLOWANCE OF RS.10,000 OUT OF KITCHEN EXPENSES. IN RESPECT OF DISALLOWANC E OF RS.16,000 OUT OF TOTAL TRAVELLING EXPENSES OF RS.80,400 OF WHICH CALCULATI ON COMES TO 20% THE LD.AR SUBMITTED THAT THE DISALLOWANCE IS ON HIGHER SIDE. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF REVENUE AUTHORITIES AND SU BMITTED THAT THE EXPENSES CLAIMED BY THE ASSESSEE WERE SUPPORTED ONLY BY SELF MADE VOUCHERS. THEREFORE, FOR WANT OF VERIFICATION THE DISALLOWANCES WERE RIG HTLY MADE. 5. I HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES, RECORD PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT THE ASSESSE E DID NOT REJECT THE BOOKS OF ACCOUNT, HOWEVER, HE MADE THE DISALLOWANCE OUT OF L ABOUR AND KITCHEN EXPENSES ONLY ON ACCOUNT THAT THE EXPENDITURES WERE EITHER S ELF PREPARED VOUCHERS OR CERTAIN PARTICULARS WERE NOT VERIFIABLE. RS.16,000 WERE DISALLOWED ON ACCOUNT OF PERSONAL USE OUT OF TRAVELLING EXPENSES. THERE IS NO DISPUTE THAT THE TRAVELLING EXPENSES CONTAINED SOME PERSONAL ELEMENT. THE ASSE SSING OFFICER DISALLOWED 20% WHICH I FIND ON HIGHER SIDE. IT WILL BE FAIR A ND REASONABLE, IF ONLY 10% OF THE TOTAL EXPENDITURE IS DISALLOWED. IN OTHER WORDS, T HE ASSESSEE GOT RELIEF OF RS.8,000 ON ACCOUNT OF DISALLOWANCE OF TRAVELLING E XPENSES AND BALANCE RS.8000 IS SUSTAINED IN ADDITION TO RS.10,000 OUT OF KITCHE N EXPENSES WHICH IS NOT PRESSED. IN THE LIGHT OF ABOVE DISCUSSION I DO NOT FIND SUBSTANCE IN SUSTAINING ADDITION OF RS.60,000 OUT OF CONTRACT LABOUR EXPENS ES. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS MERELY ON THE GROUND TH AT CERTAIN SPECIFIC DETAILS ITA NO.1327/RJT/2010 3 REGARDING COMPLETE ADDRESS AND SIGNATURE OF SOME OF THE PARTIES WERE NOT FOUND IN WAGE REGISTER. THE WAGE EXPENSE CLAIMED BY THE ASSESSEE IS SUPPORTED BY THE WAGE REGISTER. I, THEREFORE, DELETE THE SAID A DDITION OF RS.60,000. HOWEVER, THE ADDITION OF RS. 8,000/- OUT OF TRAVELING EXPENS ES AND RS./10,000/- ON ACCOUNT OF KITCHEN EXPENSES, TOTAL ADDITION OF RS.18,000/- IS CONFIRMED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08-04-2011. SD/- (A.L. GEHLOT) ACCOUNTANT MEMBER RAJKOT, DT : 08 TH APRIL, 2011 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-XVI, AHMEDABAD 4. THE CIT-V, AHMEDABAD 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT