RAKESH KHANDELWAL HUF, KOTA V. INCOME TAX OFFICER, KOTA

ITA 139/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5271 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 02-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JHA CIT DHK
• Keywords: Depreciation
• Section: 143(3); 250

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES B, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA -@ ITA NO. 139/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2012-13 RAKESH KHANDELWAL HUF, 31-D, NEW COLONY, GUMANPURA, KOTA. CUKE VS. I.T.O., WARD-1(1), KOTA. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: AAEHR 0858 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI ROHIT GUPTA (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJENDRA JHA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/03/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 17/05/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A), KOTA DATED 05/10/2017 FOR THE A.Y. 2012-13 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE DERIVES INCOME FROM TRADING OF GRAIN ITEM & BARDANA, COMMISSION AGENT AND BROKERAGE (ADATIYAS) AND COMMODITY DERIVATIVE TRANSACTION. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 03/02/2015 OF I.T.O., WARD 1(1), KOTA, COMPUTING THE TOTAL INCOME OF THE ASSESSEE AS UNDER: ITA 139/JP/2018_ RAKESH KHANDELWAL HUF VS. ITO 2 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED ALL THE ADDITIONS, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. 4. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM THE RECORD WE FOUND THAT DURING THE YEAR UNDER CONSIDERATION, THE SALE OF THE ASSESSEE HAS INCREASED FROM RS. 13.80 CRORES TO RS. 31.32 CRORES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD SHOWN G.P. RATE OF 3.79% AGAINST THE G.P. OF 4.09% FOR THE EARLIER YEAR. LOOKING TO THE 250 TIMES INCREASE IN THE TURNOVER, WE FOUND THAT THE MARGINAL DECREASE IN THE G.P. IS REASONABLE IN SO FAR AS AGAINST THE G.P. OF RS.56.47 LACS IN THE IMMEDIATE PRECEDING YEAR, THE ASSESSEE HAD SHOWN G.P. OF RS. 1.18 CRORES DURING THE YEAR UNDER CONSIDERATION. THE FIRST GRIEVANCE OF THE ASSESSEE RELATES TO DISALLOWANCE OF BARDANA EXPENSES OF RS. 8,57,096/-, IN THIS REGARD THE A.O. OBSERVED THAT THE ASSESSEE HAD SHOWN THESE EXPENDITURE IN ITS TRADING ACCOUNT BUT ITA 139/JP/2018_ RAKESH KHANDELWAL HUF VS. ITO 3 ON ENQUIRY FROM THE SELLER, THEY HAVE STATED THAT THE BILLS WERE NOT ISSUED IN THE NAME OF ASSESSEE BUT IN THE NAME OF HIS SISTER CONCERN. FROM THE RECORD WE FOUND THAT THE ASSESSEE HAS ALLEGED TO INCUR BARDANA EXPENDITURE WHICH IS NECESSARILY REQUIRED TO BE INCURRED LOOKING TO THE NATURE OF TRADE. EVEN THE PAYMENT FOR THIS PURCHASE WAS GIVEN BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUE FROM ITS OWN BANK ACCOUNT. HOWEVER, MERELY ON THE PLEA THAT THE BILL WAS ISSUED IN THE NAME OF SISTER CONCERN, THE A.O. HAS DISALLOWED THE SAME. BEFORE DISALLOWING THE SAME, THE A.O. IS REQUIRED TO FIND OUT IF SUCH EXPENDITURE HAVE ALSO BEEN CLAIMED BY THE SISTER CONCERN IN ITS BOOKS OF ACCOUNT THEN THE ACTION OF THE A.O. IS CORRECT, BUT IF THE EXPENDITURE IS NOT CLAIMED BY THE SISTER CONCERN, THEN THE DISALLOWANCE CANNOT BE MADE MERELY ON THE PLEA THAT THE BILLS WERE ISSUED IN THE NAME OF SISTER CONCERN WHEN PAYMENT FOR THE SAME WAS ACKNOWLEDGED BY THE SUPPLIER FROM ASSESSEES BANK ACCOUNT. IN ALL FAIRNESS, WE RESTORE THE MATTER BACK TO THE FILE OF THE A.O. FOR VERIFYING THE FACT OF ACTUAL DEBITING THE EXPENSES BY THE SISTER CONCERN OR BY THE ASSESSEE AND FOR DECIDING THE SAME AFRESH IN TERMS OF OUR ABOVE DIRECTION. 5. THE NEXT GRIEVANCE OF THE ASSESSEE RELATES TO DISALLOWANCE OF DALALI EXPENSES OF RS. 1.00 LAC, FREIGHT EXPENSES OF RS. 1.00 LAC AND HAMMALI EXPENSES OF RS. 1.00 LACS. THE A.O. HAS STATED THAT THE ASSESSEE INCURRED ITA 139/JP/2018_ RAKESH KHANDELWAL HUF VS. ITO 4 THESE EXPENSES IN CASH AND THERE WERE SELF-MADE VOUCHERS. ON THE OTHER HAND, THE CONTENTION OF THE LD AR OF THE ASSESSEE WAS THAT THE EXPENDITURE WAS INCURRED FOR THE PURPOSE OF BUSINESS AND SINCE THE PAYMENT WAS NOT EXCEEDING RS. 20,000/-, NO DISALLOWANCE CAN BE MADE MERELY ON THE PLEA THAT THE EXPENDITURE WAS INCURRED IN CASH. KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES VIS A VIS NATURE OF ASSESSEES BUSINESS, WE DIRECT THE A.O. TO RESTRICT THE DISALLOWANCE TO THE EXTENT OF RS. 50,000/- IN EACH HEAD. WE DIRECT ACCORDINGLY. 6. THE ASSESSEE IS ALSO AGGRIEVED FOR DISALLOWANCE OF RS. 8,973/- ON ACCOUNT OF VEHICLE RUNNING EXPENSES AND DEPRECIATION. THE A.O. HAS DISALLOWED 20% OF SUCH EXPENDITURE. KEEPING IN VIEW THE NATURE OF ASSESSEES BUSINESS AND USE OF VEHICLE FOR THE PURPOSE OF BUSINESS, WE RESTRICT THE DISALLOWANCE TO THE EXTENT OF 10%. WE DIRECT ACCORDINGLY. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH MAY, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 17 TH MAY, 2019 ITA 139/JP/2018_ RAKESH KHANDELWAL HUF VS. ITO 5 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI RAKESH KHANDELWAL HUF, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD-1(1), KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 139/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR