AMBAR FOODS P. LTD, MUMBAI V. ITO WD 4(1)(3), MUMBAI

ITA 1399/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8188 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 16-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN V P
• Keywords: Additional evidence; Corroborative evidences

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - I BENCH. . . , , . . BEFORE S/SH.H.L.KARWA,PRESIDENT AN D RAJENDRA,ACCOUNTANT MEMBER ./ ITA 1399/MUM/2011 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2007-08 M/S.AMBAR FOODS PRIVATE LIMITED 7 CHURCHGATE MANSION,A ROAD CHURCHGATE,MUMBAI-20 PAN: AAACA8899C ! V/S. ITO WARD 4(1)(3) MATRU MANDIR, MUMBAI-400034 ( #$ / APPELLANT) ( %&#$ / RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI ASGHAR ZAIN V.P. ! ' () / DATE OF HEARING : 16-1 0 -2014 *+' ' () /DATE OF PRONOUNCEMENT : 16 -1 0 -201 4 ! ! ! ! , 1961 ' '' ' 254(1) (,( (,( (,( (,( -. -. -. -. ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM- -/ -/ -/ -/ , ! ! ! ! : CHALLENGING THE ORDER DATED 16.11.2010 OF CIT(A)-9, MUMBAI THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1)THE LEARNED ASSESSING OFFICER ERRED IN MAKING TH E ADDITION OF RS. 14,31,299/-BY DISALLOWING SALARY EXPENSES CLAIMED BY THE ASSESSEE AND THE CIT (A) ERRED IN CONFIRMING THE SAME. 2)THE ASSESSEE WAS NOT ABLE TO PROVIDE THE DETAILS CALLED FOR DUE TO UNAVOIDABLE CIRCUMSTANCES AND HENCE THE ADDITIONAL EVIDENCE MAY BE ADMITTED. 3) THE LEARNED ASSESSING OFFICER HAS NOT VERIFIED T HE ADDRESSES OF THE EMPLOYEES TO WHOM SALARY IS PAID AND HENCE THE MATTER BE SET ASIDE. 4) THE ASSESSEE CRAVES TO ADD, ALTER AND AMEND THE ABOVE GROUND OF APPEAL. 2. ASSESSEE-COMPANY,FILED ITS RETURN OF INCOME ON 20.1 1.2007,DECLARING NIL INCOME.ASSESSING OFFICER(AO)FINALISED THE ASSESSMENT U/S.143(3) OF T HE ACT,ON 29.12.2009,DETERMINING THE TOTAL INCOME AT RS.11,42,560/-. 2.1. EFFECTIVE GROUND OF APPEAL IS ABOUT ADDITION OF RS. 14,31,299/- UNDER THE HEAD SALARY EXPENSES. DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAD DEBITED EXPENSES OF RS.34.64 LAKHS ON ACCOUNT OF SALARY,WAGES AND BONUS .HE DIRECTED THE ASSESSEE ,VIDE LETTER DATED 24.12.2009,TO FURNISH THE SUPPORTING EVIDENCES LIKE SALARY REGISTERS,VOUCHERS,PROFESSIONAL TAX PAID IF ANY.THE ASSESSEE FILED ITS REPLY ON 29.12.2009.A FTER CONSIDERING IT THE AO HELD THAT SUBMISSION MADE BY IT WAS NOT ACCEPTABLE,THAT THERE WAS NO SUB STANTIAL INCREASE IN THE BUSINESS ACTIVITIES OF THE ASSESSEE AS COMPARED TO LAST YEAR,THAT AS COMPA RED TO THE LAST YEAR EXPENSES ON ACCOUNT OF PF AND OTHER FUNDS HAD GONE DOWN FROM 2.91 LAKHS TO RS .1.81 LAKHS,THAT INCREASE IN SALARY WAS NOT REASONABLE.CONSIDERING THE BUSINESS ACTIVITIES AND MARKET CONDITIONS AND OTHER FACTORS THE AO ALLOWED 30% INCREASE IN THE SALARY AS COMPARED TO T HE LAST YEAR AND DISALLOWED THE BALANCE I.E. RS.14.31 LAKHS.HE SPECIFICALLY MENTIONED THAT THE A DDITION WAS MADE BECAUSE THE ASSESSEE HAD FAILED TO PRODUCE THE EVIDENCE SUCH AS SALARY REGIS TER,BILLS ETC. ITA1399/MUM/2011 AFPL/07-08 2 2.2. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).DURING THE APPELLATE PROCEEDINGS,THE FAA DIRECTED THE ASSESSEE TO FILE DETAILED PAPER BOOKS SHOWING NO.OF EMPLOYEES,COPIES OF THEIR APPOINTMENT LETTERS,PHOTOCOPY OF ATTENDANCE REGISTER,PROOF OF PAYMENT ETC.ON 16.11.2011 PHOTOCO PY OF SALARY REGISTER WAS FILED WITH A COVERING LETTER. AFTER CAREFULLYCONSIDERING THE FINDINGS OF THE AO AND SUBMISSIONS OF THE ASSESSEE AND AFTER EXAMINING THE SALARY REGISTER,THE FAA HELD THAT THE RE WERE NO ADDRESSES OF THE EMPLOYEES AT ALL, THAT ALL PAYMENTS WERE CLAIMED TO HAVE BEEN MADE I N CASH,THAT THE ASSESSEE WAS ASKED TO GIVE FULL ADDRESSES OF THE EMPLOYEES AND COPIES OF APPOINTMEN T LETTERS, ADDRESSES OF THE EMPLOYEES,THAT IN THE ABSENCE OF THE ADDRESSES NO CROSS VERIFICATION WAS POSSIBLE,THAT THE ASSESSEE HAD NO CONCLUSIVE EVIDENCE TO JUSTIFY ITS CLAIM OF SALARY WHICH WAS D OUBLE THAN THE LAST YEAR,THAT THE AO HAD ALREADY CONSIDERED 30% INCREASE IN SALARY OF THE EMPLOYEES WHICH WAS MOST REASONABLE AND JUSTIFIED. THE FAA REFUSED TO INTERFERE WITH THE ADDITION MADE BY THE AO,BECAUSE THE ASSESSEE HAD FAILED TO JUSTIFY THE INCREASE IN SALARY.HE FURTHER HELD THAT THE ASSESSEE HAD ALSO FAILED TO PROVE THE GENUINENESS OF PAYMENTS AND HAS NOT OFFERED CROSS V ERIFICATION OF THE PAYMENTS.FINALLY,HE DISMISSED THE APPEAL OF THE ASSESSEE. 2.3. BEFORE US,NOBODY APPEARED NOR ANY LETTER WAS FILED TO ADJOURN THE MATTER.WE FIND THAT THOUGH THE NOTICE OF HEARING WAS RECEIVED BY THE ASSESSEE, YET IT CHOOSE NOT TO APPEAR.THEREFORE,WE ARE DECIDING THE ISSUE ON MERITS AND ON THE BASIS OF MA TERIAL AVAILABLE ON RECORD.FROM THE ORDER OF THE AO AND THE FAA IT IS CLEAR THAT THERE WAS SUBSTANTI AL INCREASE IN THE SALARY OF THE EMPLOYEES HIRED BY THE ASSESSEE,THAT THE BOTH THE LOWER AUTHORITIES HAD DIRECTED THE ASSESSEE TO FILE NECESSARY DETAILS THAT COULD PROVE THE GENUINENESS OF THE CLA IM MADE BY IT UNDER THE HEAD SALARY PAYMENT, THAT IT DID NOT PRODUCE THE SUPPORTING EVIDENCES TO JUSTIFY THE CLAIM,THAT IN ABSENCE OF THE DOCUMENTARY EVIDENCES THE AO AND THE FAA MADE/CONFI RMED ADDITION.IN OUR OPINION,IT WAS THE PRIMARY DUTY OF THE ASSESSEE TO PRODUCE EVIDENCE IN SUPPORT OF THE CLAIM OF INCURRING OF EXPENDITURE.IT WAS GIVEN OPPORTUNITY BOTH BY THE AO AND THE FAA TO FURNISH DOCUMENT THAT COULD PROVE THE CLAIM MADE BY IT WITH REGARD TO THE SALA RY PAYMENT.AS THE ASSESSEE DID NOT COMPLY WITH THE DIRECTIONS OF THE OFFICERS,THEY WERE LEFT WITH NO OPTION BUT TO MAKE ADDITION.IN OUR OPINION,THE FAILURE OF THE ASSESSEE TO PROVE THE CORRECTNESS OF THE CLAIM IS RESPONSIBLE FOR THE ADDITION MADE BY THE AO AND THE FAA WAS FULLY JUSTIFIED IN UPHOLDING THE ORDER OF THE AO. THEREFORE,CONFIRMING HIS ORDER,WE DECIDE EFFECTIVE GROUND OF APPEAL AGAI NST THE ASSESSEE. AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. 0(1 !2( 3 -4 ' , !5 ' ( 67 . ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER,2014. -. ' *+' 8 16 9: 5 , 2014 + ' , . SD/- SD/- (H.L.KARWA/ . . ) ( / RAJENDRA) PRESIDENT/ -/ -/ -/ -/ /ACCOUNTANT MEMBER / MUMBAI, ;-! /DATE: 16.10.2014 SK ITA1399/MUM/2011 AFPL/07-08 3 -. -. -. -. ' '' ' %(< %(< %(< %(< =<'( =<'( =<'( =<'( / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / #$ 2. RESPONDENT / %&#$ 3. THE CONCERNED CIT(A)/ > ? , 4. THE CONCERNED CIT / > ? 5. DR ITAT,I BENCH,MUMBAI/ <@, %(! , . . . - . 6. GUARD FILE/ , 0 . &<( %( //TRUE COPY// -.! / BY ORDER, A / 6 DY./ASST. REGISTRAR , /ITAT, MUMBAI.