International Clearing & Shipping Agency, CHENNAI V. ACIT, CHENNAI

ITA 1501/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9198 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 23-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: R VIJAYARAGHAVAN
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1501/MDS/2015 ( / ASSESSMENT YEAR: 2007-08) M/S. INTERNATIONAL CLEARING & SHIPPING AGENCY, 158 NEW NO.325, LINGHI CHETTY STREET, CHENNAI-600 001. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE WARD-11(5), CHENNAI. PAN:AAAFI0178B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. R.VIJAYARAGHAVAN, ADVOCATE /RESPONDENT BY : MR. P.RADHAKRISHNAN, JCIT /DATE OF HEARING : 17 TH MARCH, 2016 /DATE OF PRONOUNCEMENT : 6 TH JUNE, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNAI IN ITA NO.170-CIT(A)/13-14 DA TED 31.03.2015 PASSED UNDER SECTION 143(3) R.W.S.250(6 ) OF THE ACT . 2. THE APPEAL FILED BY THE ASSESSEE IS BARRED BY LI MITATION OF ONE DAY. THE ASSESSEE HAS FILED AN AFFIDAVIT EX PLAINING THE REASON FOR THE DELAY IN FILING THE APPEAL BY STATIN G THAT THE CLERK WORKING IN THE ADVOCATE OFFICE WHO PREPARED T HE APPEAL 2 ITA NO.1501/MDS/2015 PAPERS FELL ILL. IT WAS THEREFORE PRAYED THAT THE D ELAY IN FILING OF APPEAL MAY BE CONDONED. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, WE ARE SATISFIED THAT THERE WAS REASO NABLE CAUSE FOR THE DELAY IN FILING THE APPEAL BY A DAY A ND HENCE, IN THE INTEREST OF JUSTICE, WE HEREBY CONDONE THE DELA Y IN FILING THE APPEAL AND ADMIT THE SAME FOR ADJUDICATION. 3. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLOWS:- I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE DISALLOWANCE OF ` 57,94,983/- MADE BY THE LEARNED ASSESSING OFFICER BEING EXPENDITURE INCURRED BY THE ASSESSEE UNDER VARIOUS HEADS WHICH COULD NOT BE PROVED AS GENUINE. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CLEARING & FORWARDING AND STEAME R AGENTS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 01.01.2008 DECLARING INCOME OF ` 3,31,99,274/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE LEARNED ASSESSING OFFICER THAT THE ASSESSEE HAD CLA IMED HUGE EXPENDITURE UNDER VARIOUS HEADS. ON PERUSAL OF THE VOUCHERS IN RESPECT OF THESE EXPENSES, IT WAS OBSER VED THAT 3 ITA NO.1501/MDS/2015 THERE WAS NO SUPPORTING DOCUMENTS OR EXTERNAL BILLS , VOUCHERS ETC., TO PROVE THAT THE EXPENSES ARE GENUI NE. BECAUSE OF THE AFORESAID REASONS, THE LEARNED ASSES SING OFFICER DISALLOWED THE EXPENDITURE OF RS.1,02,88,26 2/- INCURRED UNDER VARIOUS HEADS AS RECORDED IN HIS ORD ER. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) WAS OF THE VIEW THAT SINCE THE ASSESSING OFFICER HAS VERIFIED THE BOOKS OF ACCOUNTS AND FOUND THAT P ROPER BILLS AND VOUCHERS ARE NOT AVAILABLE FOR THE EXPENDITURE INCURRED AMOUNTING TO RS.57,94,983/- HE SUSTAINED THE ADDITI ON TO THAT EXTENT OUT OF THE AGGREGATE AMOUNT OF EXPENSES INCU RRED TOWARDS CUSTOMS EXPENSES, CUSTOMS ADDITIONAL EXPENS ES, HARBOR EXPENSES, MISC. EXPENSES, GENERAL EXPENSES, TOURIST TAXI AND RELATED CHARGES, AND CARGO HANDLING EXPENS E OF RS.72,95,828/-. WHILE DOING SO, THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) REJECTED THE ARGUMENT OF THE L EARNED AUTHORIZED REPRESENTATIVE THAT ON THE EARLIER YEAR THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAD DISALLOWED ONLY 15% OF SUCH EXPENDITURE. 4 ITA NO.1501/MDS/2015 6. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE ADMITTED THAT THE ASSESSEE WAS NOT ABLE TO OBTAIN E XTERNAL BILLS AND VOUCHERS IN ORDER TO EXPLAIN THE GENUINEN ESS OF THIS CLAIM. HOWEVER, HE ARGUED THAT THE ENTIRE EXPENSE W AS INCURRED BY THE ASSESSEE. HE FURTHER ARGUED BY STAT ING THAT AN AD-HOC DISALLOWANCE OF 15% ON SUCH EXPENSES MAY BE MADE AS DECIDED BY THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) IN THE EARLIER ASSESSMENT YEAR. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND, VEHEMENTLY ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND PL EADED THAT HIS ORDER MAY BE CONFIRMED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS AVAILABLE ON RECORD. NON-MAI NTENANCE OF PROPER BILLS AND VOUCHERS BY THE ASSESSEE CANNOT BE APPRECIATED. THE ASSESSEE IS BOUND TO MAINTAIN PROP ER BOOKS OF ACCOUNTS, BILLS AND VOUCHERS TO PROVE THE EXPENDITURE INCURRED BY IT AS GENUINE. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THE EARLIER 5 ITA NO.1501/MDS/2015 OCCASION HAD LENIENTLY CONSIDERED THE CASE OF THE A SSESSEE AND GRANTED RELIEF BY SUSTAINING THE ADDITION TO TH E EXTENT OF 15% ON THE EXPENSES INCURRED FOR WHICH PROPER BILLS AND VOUCHERS WERE NOT AVAILABLE. THE ASSESSEE CANNOT EX PECT SUCH LENIENCY ON EVERY OCCASION. HOWEVER, CONSIDERI NG THE PLIGHT OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR, WE HEREBY SUSTAIN THE ADDITION TO THE EXTENT OF 25% ON RS.57,94,983/- BEING THE EXPENDITURE TOWARDS WHICH PROPER BILLS AND VOUCHERS ARE NOT AVAILABLE. THUS, THE ADD ITION OF RS. 14,50,000/- (57,94,983 X 25/100) IS HEREBY CONFIRME D AND THE BALANCE AMOUNT OF RS. 43,44,983/- STANDS DELETED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 6 TH JUNE, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 6 TH JUNE, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF