The ITO, Ward-5(2), Ahmedabad V. Om Air Travels Pvt.Ltd., Ahmedabad

ITA 1384/AHD/2010

• Counselvise Citation: 138420514 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 30-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: N C AMIN
• Keywords: Corroborative evidences

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH .. , !' !' !' !', , , , #$ #.%.&'( , %) * % ' % ' % ' % ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND A.K. GARODIA, ACCOUNTANT MEMBER) ITA NO.1384/AHD/2010 [ASSTT.YEAR : 2006-07] ITO, WARD-5(2) AHMEDABAD. /VS. OM AIR TRAVELS PVT. LTD. SARITA DARSHAN APARTMENTS OPP: JAIN HIND PRESS, ASHRAM ROAD AHMEDABAD. PAN : AAACO 3719 K ( (( (,- ,- ,- ,- / APPELLANT) ( (( (./,- ./,- ./,- ./,- / RESPONDENT) * 0 1 %/ REVENUE BY : SHRI SAMIR TEKRIWAL 34 0 1 %/ ASSESSEE BY : SHRI N.C. AMIN 5 0 46)/ DATE OF HEARING : 18 TH NOVEMBER, 2011 7&8 0 46)/ DATE OF PRONOUNCEMENT : 2 ND DECEMBER, 2011 %9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL OF THE REVENUE FOR THE A.Y.2006-2007 IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XI, AHMEDABAD DATED 10.03.2010. 2. THE GROUND NO.1 OF THE REVENUES APPEAL READS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.8,65,794/- MADE UNDER SECTION 40(A)( IA) OF THE ACT. 3. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO WHILE THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE GO NE THROUGH THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE CIT(A) HAS PASSED WELL REASONED ORDER ON THE ISSUE. WE FIND THAT AN AMOUNT OF RS.8 ,65,794/- WAS BY WAY OF ITA NO.1384/AHD/2010 -2- DISCOUNT GIVEN BY THE ASSESSEE TO DIRECT/WALK-IN-CU STOMERS AND THEREFORE COULD NOT BE TREATED AS BROKERAGE OR COMMISSION AND THERE FORE THE PROVISIONS OF SECTION 194H DOES NOT APPLY. THE COMMISSION AND DI SCOUNT RECEIVED BY THE ASSESSEE FROM THE AIRLINES IS PASSED ON TO THE CUST OMER DIRECTLY BY WAY OF DISCOUNT AND THEREFORE COULD NOT BE TERMED AS COMMI SSION. IN THESE CIRCUMSTANCES, THE CIT(A) HAS RIGHTLY CONCLUDED THA T NO TDS WAS REQUIRED TO BE MADE IN TERMS OF PROVISIONS OF SECTION 194H OF T HE ACT AND ACCORDINGLY, THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED AND GROUND NO.1 OF THE APPEAL OF THE REVENUE IS REJECTED. 5. GROUND NO.2 AND 3 OF THE REVENUES APPEAL READ A S UNDER: 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.1,13,880/- MADE ON ACCOUNT OF AD VERTISEMENT EXPENSES. 6. THE LEARNED DR SUBMITTED THAT NO VOUCHERS OR SUP PORTING EVIDENCES WAS PRODUCED BY THE ASSESSEE WITH REGARD TO THE ADVERTI SEMENT AND RENOVATION EXPENSES CLAIMED BY THE ASSESSEE. HE SUBMITTED THA T THE ASSESSEE HAS ONLY SUBMITTED THE COPY OF THE LEDGER ACCOUNT AND THEREF ORE THE AO WAS JUSTIFIED IN MAKING DISALLOWANCE AT 50% OF THE EXPENSES CLAIMED BY THE ASSESSEE. HE SUBMITTED THAT THE CIT(A) HAS RESTRICTED THE DISALL OWANCE TO 10% AS AGAINST 50% DISALLOWANCE MADE BY THE AO BY OBSERVING THAT T HE EXPENSES WERE NOT PERSONAL IN NATURE. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE PAYMENTS WERE MADE THROUGH CHEQUES AND THEREFORE THE DISALLOWANCE RESTRICTED TO 10% BY THE CIT(A) OF THE TOTAL EXPENSES CLAIMED BY THE ASSESSE E UNDER THE HEAD ADVERTISEMENT AND RENOVATION EXPENSES WAS JUSTIFI ED. HE SUBMITTED THAT THE DISALLOWANCE MADE AT 50% OF THE EXPENSES CLAIME D UNDER THIS HEAD WAS EXCESSIVE. ITA NO.1384/AHD/2010 -3- 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND T HAT THE AO HAS RECORDED THE FINDING THAT THE ASSESSEE HAS ONLY FIL ED COPY OF THE LEDGER ACCOUNTS WITH REGARD TO CLAIM OF ADVERTISEMENT AND RENOVATIO N EXPENSES AND NO SUPPORTING EVIDENCES HAVE BEEN FILED. THIS FINDING OF THE AO COULD NOT BE CONTROVERTED BY THE ASSESSEE BEFORE THE CIT(A) OR B EFORE US. WE HAVE GONE THROUGH THE COPY OF THE ADVERTISEMENT AND RENOVATIO N EXPENSES ACCOUNT AS APPEARED IN THE LEDGER ACCOUNT OF THE ASSESSEE, COP Y OF WHICH HAS BEEN FILED IN THE COMPILATION BEFORE US. THE PAYMENTS HAVE BEEN MADE BY THE ASSESSEE THROUGH CHEQUES. HOWEVER, IN THE ABSENCE OF ANY SU PPORTING EVIDENCES, WE ARE OF THE VIEW THAT IT SHALL BE JUSTIFIED TO RESTRICT THE DISALLOWANCE OUT OF ADVERTISEMENT EXPENSES AND THE RENOVATION EXPENSES TO 20% OF THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE AS AGAINST 10% DISALLOWANCE UPHELD BY THE CIT(A). ACCORDINGLY, GROUND NO.2 AND 3 OF THE REVE NUES APPEALS ARE PARTLY ALLOWED. 9. IN THE RESULT, THE REVENUES APPEAL IS PARTLY AL LOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( #.%.&'( /A.K. GARODIA) %) * /ACCOUNTANT MEMBER ( .. /G.C. GUPTA ) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD