Hi Choice Processors Pvt.Ltd., Surat V. The Addl.CIT.,Range-1, Surat

ITA 1334/AHD/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1985 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-01-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 28-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER) ITA NO.1334/AHD/2010 [ASSTT. YEAR : 2007-2008] HI CHOICE PROCESSORS P. LTD. 264, GIDC, SACHIN SURAT. VS. ACIT, RANGE-1 SURAT. (APPELLANT) (RESPONDENT) ASSESSEE BY : WRITTEN SUBMISSION REVENUE BY : SHRI K. MADHUSUDAN O R D E R PER BENCH: THIS APPEAL HAS BEEN FILED AT THE BEHEST OF THE ASS ESSEE, WHICH HAS EMANATED FROM THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, SURAT DATED 19.03.2010. THE GROUNDS RAISED ARE HER EBY DECIDED AS FOLLOWS: 2. GROUND NO.1 READS AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LD.CIT(A)HAS ERRED IN CONFIRMING T HE ACTION OF THE AO IN MAKING DISALLOWANCE OF RS.1,19,759/- BEING EM PLOYEES CONTRIBUTION TOWARDS PF/ESI. 3. THE FACTS IN BRIEF AS EMERGED FROM THE CORRESPON DING ASSESSMENT ORDER PASSED UNDER SECTION 143(3) DATED 30.11.2009 WERE T HAT THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF DYEING AND PRINTING O F CLOTH ON JOB WORK BASIS. IT WAS NOTICED BY THE AO THAT THE ASSESSEE-COMPANY HAS NOT DEPOSITED THE EMPLOYEES CONTRIBUTION TOWARDS PF AND ESI WITHIN T HE PRESCRIBED DUE DATE. THE AO HAS REFERRED THE DUE DATE AS ALSO THE DATE O F PAYMENT AND THEN ALLEGED THAT THERE WAS A DELAY IN DEPOSITING THE AMOUNT WIT H THE GOVERNMENT. THE ADDITION OF RS.1,19,759/- WAS MADE WHICH WAS CONFIR MED BY THE LEARNED CIT(A). 4. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES AS ALSO THE WRITTEN SUBMISSION FILED BEFORE US, THE ADMITTED FACTUAL PO SITION IS THAT IN RESPECT OF THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. A.Y.2007-2 008 ALL THE PAYMENTS HAVE ITA NO.1334/AHD/2010 -2- BEEN MADE BEFORE THE DUE DATE OF FILING OF THE RETU RN. ALL THE PAYMENTS HAVE IN FACT BEEN MADE WITHIN THE FINANCIAL YEAR 2006-2007 AND THE ONLY ONE PAYMENT OF PF WAS MADE IN APRIL 2007, WHICH WAS ALSO BEFORE THE DUE DATE OF FILING OF THE RETURN. FURTHER, IT IS ALSO MENTIONED THAT THE DELAY WAS CAUSED BECAUSE OF THE FLOOD IN THE CITY OF SURAT DUE TO WHICH THE BAN K AND OTHER FINANCIAL ACTIVITY REMAINED CLOSED FOR FEW DAYS WHICH HAS CAUSED THE D ELAY IN DEPOSITING THE AMOUNT IN THE GOVERNMENT EXCHEQUER. NOW THIS ISSUE IS DIRECTLY COVERED BY FEW DECISIONS VIZ. CIT VS.P.M. ELECTRONICS LTD., 22 0 CTR 635 (DEL), CIT VS. AMI INFORMATION TECH LTD., 318 ITR 123 AND CIT VS. SABRI ENTERPRISE, 298 ITR 1241 (KAR). THE LATEST DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VINAY CEMENT LTD., 213 CTR 268 ALSO FAVO URS THE ASSESSEES CONTENTION. FOLLOWING THESE DECISIONS AND CONSIDER ING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE HEREBY DIRECT TO ALLOW THE CL AIM AND ACCORDINGLY THIS GROUND IS HEREBY ALLOWED. 5. GROUND NO.2 READS AS UNDER: 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS ON THE SUBJECT, THE LD.CIT(A)HAS ERRED IN CONFIRMING THE A CTION OF THE AO IN MAKING DISALLOWANCE OF RS.41,962/- BEING 10% OF COO LY & CARTAGE EXPENSES AND REPAIR & MAINTENANCE EXPENSES. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF SEVERAL EXPENSES VIZ. COOLIE , CARTAGE EXPENSES, REPAIRS AND GENERAL EXPENSES. IT HAS ALSO BEEN NOTED BY THE AO THAT MOST OF THE PAYMENTS WERE MADE IN CASH. IT HAS ALSO BEEN NOTED THAT SUP PORTING BILLS WERE NOT AVAILABLE. IN THE ABSENCE OF COGENT EVIDENCES AND DETAILS, THE AO HAS MENTIONED THAT IT WAS NOT POSSIBLE FOR HIM TO VERIF Y THE CORRECTNESS OF THE EXPENSES HENCE DECIDED TO DISALLOW 10% OF THE EXPEN SES WHICH ACCORDING TO HIM WAS FAIR AND REASONABLE. ACCORDINGLY, THE ADDI TION OF RS.41,962/- WAS MADE AND THAT ADDITION WAS CONFIRMED BY THE CIT(A). ITA NO.1334/AHD/2010 -3- 7. ON HEARING THE SUBMISSIONS OF BOTH SIDES, WE FIN D NO FALLACY IN THE ACTION OF THE AO AS ALSO THE VIEW TAKEN BY THE LEAR NED CIT(A). THE ONUS WAS ON THE ASSESSEE TO PLACE ON RECORD THE REQUISITE DE TAILS ALONG WITH EVIDENCES, HOWEVER, THE ALLEGATION IS THAT THE ASSESSEE HAS FA ILED TO PRODUCE SUCH DETAILS. IN THE ABSENCE OF COGENT MATERIAL, THE AO HAD NO OP TION BUT TO TAKE THE RECOURSE OF ESTIMATION FOR DISALLOWANCE. MOREOVER, IT HAS ALSO NOT BEEN PLACED BEFORE US THAT THE AD HOC DISALLOWANCE OF 10% WAS NOT FAIR AND REASONABLE. THUS, THE TOTALITY OF THE CIRCUMSTANCES WARRANTS TO CONFIRM THE DISALLOWANCE. THIS GROUND OF THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN OPEN COURT ON 11 TH FEBRUARY, 2011. SD/- SD/- (G.D. AGARWAL) VICE-PRESIDENT (MUKUL KR. SHRAWAT) JUDICIAL MEMBER PLACE : AHMEDABAD DATE : 11-02-2011 COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD