ITO, Ward - 38(4), Kolkata, Kolkata V. M/s. Savitri Construction, Kolkata

ITA 1452/KOL/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70417 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2013
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 19-07-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 14-07-2010
• Court: TRIBUNAL
• Department Lawyers: NIRANJAN SATPATI
• Assessee Lawyers: N O N E
• Section: 143(3); 133(6)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ''# ''# ''# ''#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1452/KOL/2010 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2003-04 INCOME-TAX OFFICER, WARD-38(4), KOLKATA. VS. M/S. SAVITRI CONSTRUCTION (PAN: AAWFS5733N) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING : 20.11.2013 DATE OF PRONOUNCEMENT:20.11.2013 FOR THE APPELLANT: SHRI NIRANJAN SATPATI, SR. DR FOR THE RESPONDENT: N O N E $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XXIV, KOLKATA IN APPEAL NO. 188/CIT(A)-XXIV/38(4)/07-08 DATED 16.02.2010. ASSE SSMENT WAS FRAMED BY ITO, WARD- 38(4), KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1 961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2003-04 VIDE HIS ORDER DATED 31.03. 2006. 2. THE FIRST COMMON ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING VARIOUS DISALLOWANCES OR RESTRICTING THE DISALLOWA NCES AT AN APPROPRIATE PERCENTAGE VIDE GROUND NOS. 1 TO 10 AND THE SAME READ AS UNDER: [1] THE LD. CIT[A] HAS ERRED IN LAW AS WELL AS IN FACT IN REDUCING THE ADDITION OF RS.89,728/- TOWARDS HIRE CHARGES IN SAVITRI CONS TRUCTION TO RS. 48,416/-. [2] THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN F ACT IN REDUCING THE ADDITION OF RS.25,059/- TOWARDS SITE EXPENSES IN SAVITRI CONSTR UCTION TO RS. 5,223/-. [3] THE LD. CIT[A] HAS ERRED IN LAW AS WEIL AS IN F ACT IN REDUCING THE ADDITION OF RS.2,31,190/- TOWARDS REPAIR AAID MAINTENANCE IN SA VITRI CONSTRUCTION TO RS.60,513/-. [4] THE LD. CIT[A] HAS ERRED IN LAW AS WELL AS IN F ACT IN REDUCING THE ADDITION OF RS.92,961/- TOWARDS TELEPHONE EXPENSES IN SAVITRI C ONSTRUCTION TO RS. 33,474/-. [5] THE LD. CIT[A] HAS ERRED IN LAW AS WELL AS IN F ACT IN REDUCING THE ADDITION OF RS. 11,456/- TOWARDS STAFF WELFARE EXPENSES IN SAVI TRI CONSTRUTION TO RS. 5,728/-. 2 ITA NO. 1452/K/2010 M/S. SAVITRI CONSTRUCTION, AY-03-04 [6] THE LD. CIT[A] HAS ERRED IN LAW AS WELL AS IN F ACT IN REDUCIAIG THE ADDITION OF RS.45,565/- TOWARDS TRAVELING AND CONVEYANCE EXPENS ES IN SAVITRI CONSTRUCTION TO RS. 22,782/-. [7] THE LD. CIT[A] HAS ERRED IN LAW AS WELL AS IN F ACT IN REDUCING THE ADDITION OF RS. 1,37,011/- TOWARDS MACHINERY & VEHICLE HIRE CHA RGES IN SAVITRI CONSTRUCTION TO RS. 54,804/-. [8] THE LD. CIT[A] HAS ERRED IN LAW AS WELL AS IN F ACT IN REDUCING THE ADDITION OF RS.75,238/- TOWARDS SITE EXPENSES WHICH INCLUDES GU EST HOUSE RENT, GUEST HOUSE EXPENSES AND OTHER EXPENSES IN SHRIYA CONSTRUCTION TO RS. 33,838/-. [9) THE LD. CIT[A] HAS ERRED IN IAW AS WELL AS IN F ACT IN REDUCING THE ADDITON OF RS.60,468/- TOWARDS MACHINERY & VEHICLE MANTENANCE IN SHRIYA CONSTRUCTION TO RS. 30,233/-. [10] THE LD. CIT[A] HAS ERRED IN LAW AS WELL AS IN FACT IN REDUCING THE ADDITION OF RS.6,84,351/- TOWARDS TRANSPORTATION EXPENSES IN SH RIYA CONSTRUCTION TO RS.3,42,176/-. 3. WE HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE CIT(A) HAS DISCUSSED THE INDIVIDUAL D ISALLOWANCES SEPARATELY AND THE RELEVANT DISCUSSION IS AS UNDER: 1. HIRE CHARGES: THESE NCLUDE MACHINERY AND VEHICLE HIRE CHARGES. T HE AO HAS DISALLOWED 1.1% OF TOTAL TURNOVER. LOOKING TO THE FACT THAT TURNOVER OF SAVI TRI CONSTRUCTION HAS GONE DOWN FROM RS.3.22 CRORES IN A.Y. 01-02 TO RS.80.83 LACS IN A. Y. 03-04 AND TAKING NTO CONSIDERATION THE INCREASE IN COST IN THE YEARS AND THE DISCUSSIO N IN THE ASSESSMENT ORDER ON THE ISSUE THE DISALLOWANCE IS DIRECTED TO BE RESTRICTED TO 10 % OF TOTAL EXPENSES OF RS 4,84,164/- I.E., RS.48,416/- AS AGAINST RS.89,728/- MADE BY TH E AO. THE APPELLANT GETS RELIEF OF RS.41,312/-. 2, SITE EXPENSES: THE AO HAS DISALLOWED .31% OF TOTAL TURNOVER. LOOKI NG TO THE FACT THAT TURNOVER OF SAVITRI CONSTRUCTION HAS GONE DOWN FROM RS.3.22 CRO RES IN A.Y. 01-02 TO RS.80.83 LACS IN A.Y. 03-04 AND TAKING INTO CONSIDERATION THE INC REASE IN COST IN THE YEARS AND THE DISCUSSION IN THE ASSESSMENT ORDER ON THE ISSUE THE DISALLOWANCE IS DIRECTED TO BE RESTRICTED TO 10% OF TOTAL EXPENSES OF RS. 52,230/- I.E., RS.5,223/- AS AGAINST RS.25,059/- MADE BY THE AO. THE APPELLANT GETS RELIEF OF RS.19, 836 / -. 3. REPAIRS & MAINTENANCE: THE AO HAS DISALLOWED 2.86% OF TURNOVER. LOOKING TO THE FACT THAT TURNOVER OF SAVITRI CONSTRUCTION HAS GONE DOWN FROM RS.3.22 CRORES IN A .Y. 01-02 TO RS.80.83 LACS IN A.Y. 03-04 AND TAKING INTO CONSIDERATION THE INCREASE IN COST IN THE YEARS AND THE DISCUSSION IN THE ASSESSMENT ORDER ON THE ISSUE THE DISALLOWAN CE IS DIRECTED TO BE RESTRICTED TO 10% OF TOTAL EXPENSES OF RS.6,05,139/- I.E., RS.60,513/ - AS AGAINST RS.2,31,190/- MADE BY THE AO. THE APPELLANT GETS RELIEF OF RS.1,70,677/ -, 4. TELEPHONE EXPENSES: THE AO HAS DISALLOWED 1.15% OF TOTAL TURNOVER. LOOK ING TO THE FACT THAT TURNOVER OF SAVITRI CONSTRUCTION HAS GONE DOWN FROM RS.3.22 CR ORE IN A.Y. 01-02 TO RS.80.83 LACS IN A.Y. 03-04 AND TAKING INTO CONSIDERATION THE INC REASE IN COST IN THE YEARS AND THE DISCUSSION IN THE ASSESSMENT ORDER ON THE ISSUE THE DISALLOWANCE S DIRECTED TO BE 3 ITA NO. 1452/K/2010 M/S. SAVITRI CONSTRUCTION, AY-03-04 RESTRICTED TO 20% OF TOTAL EXPENSES OF RS.1,67,371/ - I.E., RS.33,474/- AS AGAINST RS.92,961/- MADE BY THE AO. THE APPELLANT GETS RELI EF OF RS.59,487/-. 5. STAFF WELFARE EXPENSES: THE AO DISALLOWED 20% OF TOTAL EXPENSES. LOOKING TO THE FACT THAT TURNOVER OF SAVITRI CONSTRUCTION HAS GONE DOWN FROM RS.3.22 CRORES IN A .Y. 01-02 TO RS.80.83 LACS IN A.Y. 03-04 AND TAKING INTO CONSIDERATION THE NCREASE I N COST IN THE YEARS AND THE DISCUSSION IN THE ASSESSMENT ORDER ON THE ISSUE THE DISALLOWAN CE IS DIRECTED TO BE RESTRICTED TO 10% OF TOTAL EXPENSES I.E., RS.5,728/-. THE APPELLANT G ETS RELIEF OF RS.5,728/-. 6. TRAVELING & CONVEYANCE: THE AO DISALLOWED 20% OF TOTAL EXPENSES. LOOKING TO THE FACT THAT TURNOVER OF SAVITRI CONSTRUCTION HAS GONE DOWN FROM RS.3.22 CRORES IN A .Y. 01-02 TO RS.80.83 LACS IN A.Y. 03-04 AND TAKING INTO CONSIDERATION THE INCREASE IN COST IN THE YEARS AND THE DISCUSSION IN THE ASSESSMENT ORDER ON THE ISSUE THE DISALLOWAN CE IS DIRECTED TO BE RESTRICTED TO 10% OF TOTAL EXPENSES I.E., RS.22,782/-. THE APPELLANT GETS RELIEF OF RS.22,783/-. SHRIYA CONSTRUCTION: 1. HIRE CHARGES THESE INCLUDE MACHINERY AND VEHICLE HIRE CHARGES. T HE AO HAS DISALLOWED 50% OF TOTAL EXPENSES. TAKING INTO CONSIDERATION THE INCREASE IN COST IN THE YEARS AND THE DISCUSSION IN THE ASSESSMENT ORDER ON THE ISSUE THE DISALLOWAN CE IS DIRECTED TO BE RESTRICTED TO 20% OF TOTAL EXPENSES OF RS.2,74,021/- I.E., RS.54,804/ - AS AGAINST RS.1,37,011/- MADE BY THE AO. THE APPELLANT GETS RELIEF OF RS.82,207/-. 2. SITE EXPENSES: THIS NCLUDES GUEST HOUSE RENT OF RS.61,500/-, GUES T HOUSE EXPENSES OF RS.70,257/- AND OTHER EXPENSES OF RS.37,434/-. NO RENT RECEIPTS WER E SUBMITTED AND NO DETAILS OF PROPERTY TAKEN ON RENT WERE SUBMITTED THEREFORE THE AO HAS DISALL WED 50% OF GUEST HOUSE RENT AND GUEST HOUSE EXPENSES AND 25% OF THE BALANCE EXPENSES. LOOKING TO THE ABOVE FACTS AND THE FACT THAT SUBSEQUENTLY ALSO THE APPELLANT DID NOT FURNISH THE DETALS OF PROPERTY TAKEN ON RENT AND TAKING INTO ACCOUNT T HE SPECIFIC EXPENSES POINTED OUT BY THE AO IN THE ASSESSMENT ORDER AND CONSIDERING THE INCREASE IN COST OVER THE YEARS THE DISALLOWANCE IS RESTRICTED TO 20% OF TOTAL SITE EXP ENSES OF RS.1,69,191/- WHICH WORKS TO RS.33,838/-. THE APPELLANT GETS RELIEF OF RS.41,400 /-. 3. REPAIRS & MAINTENANCE: THE AO HAS DISALLOWED 20% OF TOTAL EXPENSES. TAKING INTO CONSIDERATION THE INCREASE IN COST IN THE YEARS AND THE DISCUSSION IN THE ASSESSM ENT ORDER ON THE ISSUE THE DISALLOWANCE IS DIRECTED TO BE RESTRICTED TO 10% OF TOTAL EXPENSES OF RS.3,02,339/- I.E., RS.30,233/- AS AGAINST RS.60,468/- MADE BY THE AO. THE APPELLANT GETS RELIEF OF RS.30,233/-. 5. TRANSPORTATION EXPENSES: THE AO HAS DISALLOWED 20% OF TOTAL EXPENSES. TAKING INTO CONSIDERATION THE INCREASE IN COST IN THE YEARS AND THE DISCUSSION IN THE ASSESSM ENT ORDER ON THE ISSUE THE DISALLOWANCE IS DIRECTED TO BE RESTRICTED TO 10% OF TOTAL EXPENSES OF RS.34,21,754/- I.E. RS.3,42,176/- AS AGAINST RS.6,84,351/- MADE BY THE AO. THE APPELLANT GETS RELIEF OF RS.3,42,175/-. 4. AT THE OUTLSET, THE LD. SR. DR COULD NOT POINT OUT ANY DEFECT RATHER HE FAIRLY CONCEDED THAT IT SEEMS THAT THE DISALLOWANCES ARE REASONABLY RESTRICTED. IN SUCH CIRCUMSTANCES, WE FIND NO REASON TO INTEFERE WITH THE ORDER OF CIT(A). WE UPHOLD THE DISALLOWANCES RESTRICTED BY CIT(A) AND THESE ISSUES OF REVENUES APPEAL ARE DIS MISSED. 4 ITA NO. 1452/K/2010 M/S. SAVITRI CONSTRUCTION, AY-03-04 5. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) IN DELETING THE ADDITION OF SUNDRY CREDITORS MADE BY AO ON ACCOUNT OF UNDERSTATEMENT OF ACCOUNT IN THE CASE OF M/S. SHRIYA CONSTRUCTION. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.11: 11. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN FACT IN DELETING THE ADDITION OF RS.1,09,900/- MADE ON ACCOUNT OF UNDERSTATEMENT OF SUNDRY CREDITORS IN SHRIYA CONSTRUCTION. 6. WE HAVE HEARD LD. SR. DR AT LENGTH. THE AO DUR ING THE COURSE OF ASSESSMENT PROCEEDING NOTICED FROM THE LIST OF SUNDRY CREDITOR S THAT THRE IS UNDERSTATEMENT OF SUNDRY CREDITORS IN RESPECT OF NITIKA AGARWAL TO THE EXTEN T OF RS.1,09,900/-. THE AO ISSUED NOTICE U/S. 133(6) OF THE ACT TO NITIKA AGARWAL, GURGAON FOR VE RIFICATION OF THESE CREDITORS. THE ASSESSEE SUBMITTED THE CONFIRMATION FROM SHRI SUDHIR AGARWAL BUT ACCORDING TO AO THE PURPOSE OF SUCH PAYMENT COULD NOT BE EXPLAINED PROPERLY ND THE PERS ON CONCERNED I.E. NITIKA AGARWAL HAS NOT CONFIRMD THE SAID CREDIT. ACCORDINGLY, HE MADE ADD ITION OF UNDERSTATEMENT OF SUNDRY CREDITORS TO THE EXTENT OF RS.1,09,900/-. AGGRIEVED, ASSESSE E PREFERRED APPEAL BEFORE CIT(A), WHO DELETED THE ADDITION. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD LD. SR. DR. AND GONE THROUGH THE F ACTS AND CIRCUMSRANCES OF THE CASE. WE FIND THAT A SUM OF RS.1,09,900/- WAS ADVANCED DU RING THE YEAR AND THE SUM WAS DEBITED TO SUNDRY CREDITORS ACCOUNT AGAINST WHICH NO GOODS OR SERVICES WERE ACQUIRED BY THE ASSESSEE AND AS SUCH NOT DEBITED IN P&L ACCOUNT. THE ASSESSEE H AS ADVANCED A SUM OF RS.1,09,900/-. IT IS ALSO A FACT THAT THE SUM OF RS.1,09,900/- WAS GIVEN BY ASSESSEE FIRM TO M/S. SHRIYA CONSTRUCTION BY DEMAND DRAFT FROM DIFFERENT DATES, AS IS CONFIRM ED, BUT NO EXPENDITURE HAS BEEN CLAIMED OR EVEN THAT PARTY HAS NOT SUPPLIED ANY GOODS OR GIVE N FACILITIES OR SERVICES. HENCE, THE SAME WAS NOT DEBITED TO THE P&L ACCOUNT. IN VIEW OF THE ABO VE, WE FEEL THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION AND WE CONFIRM THE SAME. 8. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 9. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- . . . . ''# ''# ''# ''# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20TH NOVEMBER, 2013 12 '3' 4 JD.(SR.P.S.) 5 ITA NO. 1452/K/2010 M/S. SAVITRI CONSTRUCTION, AY-03-04 $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT ITO, WARD-38(4), KOLKATA. 2 ./,- / RESPONDENT M/S. SAVITRI CONSTRUCTION, 29D, NAYA N CHAND DUTTA STREET, KOLKATA-700 006. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA. <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .