M/s. S.R. PROTIENS PVT. LTD, Jaipur V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-4, Jaipur

ITA 15/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3619 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 03-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI JCIT DHK
• Keywords: Business income; Rule of consistency; Corroborative evidences
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 15/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15. M/S. S.R. PROTIENS PVT. LTD., D-97, SHANTI SADAN, AMBABARI, JAIPUR. CUKE VS. THE ACIT, CIRCLE-4, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAICS 0896 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SHRAWAN KUMAR GUPTA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28.06.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29/06/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 16 TH NOVEMBER, 2017 OF LD. CIT (A)-2, JAIPUR FOR THE A SSESSMENT YEAR 2014-15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. THAT THE IMPUGNED ASSESSMENT ORDER U/S 143(3) DATED 31.12.2015 IS BAD IN LAW AND ON FACTS OF THE CASE F OR WANT OF JURISDICTION AND FOR VARIOUS OTHER REASONS AND HENC E THE SAME MAY KINDLY BE QUASHED. 2. RS. 2,50,000/-: THE LD. CIT (A) HAS GROSSLY ERRE D IN LAW AS WELL AS ON THE FACTS OF THE CASE IN PARTLY SUSTAINING TH E DISALLOWANCE OF EXPENSES OF RS. 2,50,000/- OUT OF RS. 4,00,000/- DISALLOWED BY THE AO ON ACCOUNT OF VARIOUS EXPENSES, WITHOUT I NVOKING THE PROVISIONS OF SEC. 145(3), WHICH WAS BASES MERELY O N ASSUMPTION, PRESUMPTION AND SUSPICION. THE DISALLOW ANCE SO MADE BY THE LD. AO AND PARTLY CONFIRMED BY THE CIT (A) IS BEING ABSOLUTELY, CONTRARY TO THE PROVISIONS OF LAW AND F ACTS OF THE 2 ITA NO. 15/JP/2018 M/S. S.R. PROTIENS PVT. LTD., JAIPUR. CASE AND NOT IN CONFORMITY WITH THE LAW, HENCE THE SAME MAY KINDLY BE DELETED IN FULL. 3. THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CHARGING OF INTEREST U/S 234B, 234C & 234D AS CONSE QUENTIAL IN NATURE. THE APPELLANT TOTALLY DENIES IT LIABILITY O F CHARGING OF ANY SUCH INTEREST. HENCE THE INTEREST SO CHARGED, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, MAY KINDLY BE DELE TED IN FULL. 4. THE APPELLANT PRAYS YOUR HONORS INDULGENCE TO AD D, AMEND OR ALTER ALL OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE THE DATE OF HEARING. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO MADE AN ADHOC DISALLOWANCE OF RS. 4,00,000/- ON ACCOUNT OF VARIOU S EXPENSES RELATING TO LABOUR PAYMENT, BOILER RUNNING EXPENSES, MUSTARD SEED CRUS H EXPENSES ETC. FOR WANT OF SUPPORTING EVIDENCE AS THE ASSESSEE HAS PRODUCED SE LF MADE VOUCHERS. ON APPEAL, THE LD. CIT (A) HAS RESTRICTED THE DISALLOWANCE TO RS. 2,50,000/-. 3. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. D/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. A/R OF THE ASSESSEE HA S SUBMITTED THAT THE AO HAD MADE AN ADHOC DISALLOWANCE WHEREAS ALL THESE EXPENS ES ARE ESSENTIAL FOR DOING THE BUSINESS ACTIVITY OF THE ASSESSEE OF CRUSHING THE M USTARD SEEDS FOR THE PURPOSES OF EXTRACTING OIL AND MUSTARD CAKE. THUS THE LD. A/R HAS SUBMITTED THAT THE ASSESSEE HAS PRODUCED ALL THE RELEVANT RECORD TO SHOW THAT T HE EXPENSES ARE NOT EXCESS CONSIDERING THE NATURE OF ACTIVITY CARRIED OUT BY T HE ASSESSEE. THEREFORE, THE ADHOC DISALLOWANCE IS NOT JUSTIFIED. 3.1. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED T HAT THE ASSESSEE HAS MADE THE PAYMENTS IN CASH OF RS. 19,000/- EACH TIME TO AVOID THE PROVISIONS OF THE ACT AND FURTHER THE ASSESSEE HAS PRODUCED ONLY SELF MADE VO UCHERS, THEREFORE, IN THE 3 ITA NO. 15/JP/2018 M/S. S.R. PROTIENS PVT. LTD., JAIPUR. ABSENCE OF PROPER BILLS AND VOUCHERS, THE EXPENSES ARE NOT VERIFIABLE. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, AT THE OUTSET WE NOTE THAT AN IDENTICAL ISSUE WAS C ONSIDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR T HE ASSESSMENT YEAR 2013-14 WHEREIN THE AO HAD MADE AN IDENTICAL DISALLOWANCE O F RS. 4,00,000/- IN RESPECT OF THE EXPENSES WHICH WAS RESTRICTED BY THE LD. CIT (A ) TO RS. 2,00,000/-. ON FURTHER APPEAL, THE TRIBUNAL HAS CONSIDERED THE ISSUE IN PA RA 2.4 AS UNDER :- 2.4 THE BENCH HAS THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED THAT THE AO MADE THE LUMPSUM DISALLOWANCE OF RS. 4.00 LACS AS THE EXPEN SES WERE NOT VERIFIABLE FOR WANT OF PROPER BILLS AND VOUCHERS. I N FIRST APPEAL , THE LD. CIT(A) HAS REDUCED THE SAME TO THE EXTENT OF RS. 2.00 LACS. DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSE SSEE FILED THE FOLLOWING STATEMENT SHOWING COMPARATIVE EXPENSE. NATURE OF EXPENSES A.Y. 2013-14 A.Y. 2012-14 BOILER RUNNING EXPENSES (EXCLUDING COAL & FUEL EXPENES) 11,62,680 10,49,497 MUSTARD CAKE EXPENSES 11,67,459 10,62,573 MUSTARD OIL EXPENSES 11,70,530 10,57,045 MUSTARD SEED EXPENSES 11,62,680 11,75,240 TOTAL 46,63,349 43,44,355 MARGINAL INCREASE 3,18,994 AMOUNT OF TOTAL SALES 84,97,18,792 70,12,90,610 THUS INCREASE IN THE AMOUNT OF SALES BY RS. 14,84,28,1822 4 ITA NO. 15/JP/2018 M/S. S.R. PROTIENS PVT. LTD., JAIPUR. TAKING INTO CONSIDERATION THE FACTS, CIRCUMSTANCES OF THE CASE AND THE ORDERS OF THE LOWER AUTHORITIES, IT WILL BE IN THE INTEREST OF EQUITY AND JUSTICE TO SUSTAIN THE ADDITION TO THE E XTENT OF RS. 1.00 LACS AS AGAINST RS. 2.00 LACS CONFIRMED BY THE LD. CIT(A). THUS GROUND NO. 1 AND 2 OF THE ASSESSEE IS PARTLY ALLOWE D. THUS ON IDENTICAL FACTS, THE TRIBUNAL HAS RESTRICTE D THE DISALLOWANCE TO THE EXTENT OF RS. 1,00,000/- FOR THE ASSESSMENT YEAR 2013-14 AND TO MAINTAIN THE RULE OF CONSISTENCY, WE FOLLOWING THE EARLIER ORDER OF THIS TRIBUNAL AND CONSEQUENTLY THE DISALLOWANCE SUSTAINED BY THE LD. CIT (A) IS RESTRI CTED TO RS. 1,00,000/-. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 29/06/ 2018. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 29/06/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. S.R. PROTIENS PVT LTD., JAIP UR. 2. THE RESPONDENT THE ACIT, CIRCLE-4, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 15/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 15/JP/2018 M/S. S.R. PROTIENS PVT. LTD., JAIPUR.