M/s. Economic Logistics, Baroda V. The ACIT.,Circle-5, Baroda

ITA 1403/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0157 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-08-2010
• Assessment Year: 2007-2008
• Appeal Filed On: 03-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHJRI K M MAHESH
• Assessee Lawyers: ANIL R SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH C CC C BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI T.K.SHARMA T.K.SHARMA T.K.SHARMA T.K.SHARMA, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER AND AND AND AND SHRI N.S. SAINI, SHRI N.S. SAINI, SHRI N.S. SAINI, SHRI N.S. SAINI, ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE OF HEARING:10-8-2010 DRAFTED ON: 10-8-2010 ITA NO. 1403/ AHD/ 2010 ASSESSMENT YEAR :2007-08 M/S. ECONOMIC LOGISTICS B-11,JAY GAYARTI NAGAR VIP ROAD, KARELIBAUG, BARODA. VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-5, AAYAKAR BHAVAN, NR. RACE COURSE CIRCLE, BARODA. PAN/GIR NO. : AACFE 0606L (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SH RI ANIL R. SHAH. RESPONDENT BY: SHJRI K. M. MAHESH, SR. D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST L EARNED COMMISSIONER OF INCOME TAX (APPEALS) V, BARODA DATE D 8-3-2010. 2. THE SOLE GROUND OF APPEAL OF THE ASSESSEE IS THA T IN THE CIRCUMSTANCES AND ON THE FACTS OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING THE ADDITION FOR `.3,85,569/- BEING 10% OF THE CASH FRE IGHT PAYMENT VOUCHERS OF GURGAON OFFICE OF THE FIRM. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE , THE ASSESSEE IS ENGAGED IN TRANSPORTATION BUSINESS. DURING THE COU RSE OF THE ASSESSMENT THE LEARNED ASSESSING OFFICER OBSERVED T HAT EXPENSES CLAIMED UNDER THE HEAD FREIGHT PAID ARE MOSTLY SU PPORTED BY SELF GENERATED VOUCHERS. FURTHER, IN SOME OF THE VOUCHE RS SIGNATURES OF THE RECEIVERS ARE MISSING, IN SOME VOUCHERS PERS ONS APPROVING THE PAYMENT HAS NOT SIGNED, MOST OF THE VOUCHERS DO NOT CONTAIN - 2 - VOUCHER NUMBER, IN SOME VOUCHERS THE BRANCH OF THE ASSESSEE IS NOT STATED AND IN SOME VOUCHERS VEHICLE NO. GJ 6Z-8 703 STATED WAS OF AN AUTORIKSHAW WHICH IS SHOWN AS LORRY. IN VIEW OF THE ABOVE DISCREPANCIES HE DISALLOWED 10% OF FREIGHT EXPENSES WHICH WORKED OUT TO `.17,74,784/-. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) OBSERVED THAT THE DISCREPANCY WAS FOUND O NLY WITH RESPECT TO FREIGHT VOUCHERS RELATING TO GURGAON BRA NCH OFFICE AND THEREFORE, HE RESTRICTED THE DISALLOWANCE OF FREIGH T EXPENSES TO THE EXTENT OF 10% OF FREIGHT PAID BY GURGAON BRANCH OFF ICE WHICH WORKED OUT TO `.3,85,569/- AND THEREFORE, HE DELETE D THE BALANCE AMOUNT OF `.13,89,215/-. 5. THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 6. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED THAT IN VIEW OF THE DECISION OF THIS TRIB UNAL IN THE CASE OF ACIT VS. NIKO RESOURCES LTD.,(2009) 123 TTJ (AHD) 3 10, THE DISALLOWANCE SHOULD BE RESTRICTED TO 2% OF THE PAYM ENT OF FREIGHT BY GURGAON BRANCH WHICH IS `.38,55,694/-. 7. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRE SENTATIVE RELIED UPON THE ORDER OF THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS). 8. WE FIND THAT THE ASSESSEE HAS NOT DISPUTED THE D ISCREPANCY IN THE VOUCHERS AS OBSERVED BY THE LOWER AUTHORITIE S. WE HAVE GONE THROUGH THE DECISION IN THE CASE OF NIKO RESOU RCES LTD.,(SUPRA) WHERE THE LEARNED ASSESSING OFFICER AF TER FINDING CERTAIN DISCREPANCY IN THE VOUCHERS DISALLOWED `.10 LAKHS OUT OF THE EXPENSES INCURRED UNDER THE HEADS POCKET EXPENSES/T RAVELLING AND CONVEYANCE EXPENSES, WELFARE EXPENSES AND MISCELLAN EOUS EXPENSES, WHICH ON APPEAL WAS REDUCED TO `.5 LAKHS BY THE - 3 - LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND THE TRIBUNAL CONFIRMED THE DISALLOWANCE BY OBSERVING THAT THE VO UCHERS WERE MAINTAINED IN A DISORDERLY MANNER AND FROM THEM IT COULD NOT BE INFERRED WHETHER THE EXPENSES WERE INCURRED FOR BU SINESS PURPOSES OF THE ASSESSEE. THUS, IT IS OBSERVED THAT NOWHERE IN THE ABOVE DECISION ANY PRINCIPLE WAS LAID DOWN BY THE T RIBUNAL THAT DISALLOWANCE SHOULD BE @ 2% ONLY WHICH IN OUR OPINI ON COULD NOT HAVE ALSO LAID DOWN BY THE TRIBUNAL. THUS, WE DO NO T FIND ANY FORCE IN THE SUBMISSION OF THE LEARNED AUTHORISED REPRESE NTATIVE OF THE ASSESSEE. IN THE INSTANT CASE, NO MATERIAL WAS BRO UGHT BEFORE US BY THE ASSESSEE TO SHOW THAT FREIGHT EXPENSES CLAIM ED IN THE GURGAON BRANCH BY THE ASSESSEE WAS REASONABLE KEEPI NG IN VIEW THE VOLUME OF BUSINESS OF THE ASSESSEE. FURTHER, NO MATERIAL WAS BROUGHT ON RECORD TO SHOW THAT THE DISALLOWANCE OF `.3,85,569/- WAS UNREASONABLY EXCESSIVE KEEPING IN VIEW THE PAST ACCEPTED POSITION OF SUCH EXPENSES IN THE CASE OF THE ASSESS EE OR ANY OTHER COMPARABLE CASE. IN ABSENCE OF ANY SUCH MATERIAL, W E DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS CONFI RMED AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON THIS 18 TH DAY OF AUGUST, 2010. SD/- SD/- ( T.K. SHARMA ) ( T.K. SHARMA ) ( T.K. SHARMA ) ( T.K. SHARMA ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AHMEDABAD: ON THIS 18 TH DAY OF AUGUST, 2010 COMPILED AND COMPARED BY : PATKI - 4 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-V, BARODA. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 10-8-2010 ---------- --------- 2. DRAFT PLACED BEFORE AUTHORITY 10-8-2010 - ------------------ 3. DRAFT PROPOSED & PLACED 10-8-2010 ------- ------------ JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 18-8-2010 ------ ------------- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 18-8-2010 - ------------------- 6. KEPT FOR PRONOUNCEMENT ON 18-8-2010 -- ------------------ 7. FILE SENT TO THE BENCH CLERK 18-8-2010 -------------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- ---------------------