M/s. Tahar Ali Industries & Projects P. Lltd, Hyderabad V. The ACIT Circle - 2(3), Hyderabad

ITA 1566/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3365 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 13-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS DRCIT
• Assessee Lawyers: SAYED TAUSIF ALI
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.1566/HYD/2010 (ASSESSMENT YEAR 20 07-08) M/S. TAHER ALI INDUSTRIES & PROJECTS (P) LTD., HYDERABAD. (PAN AABCT 4110 E) VS ASSTT. COMMISSIONER OF INCOME- TAX CIRCLE 2(3), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAYED TAUSIF ALI RESPONDENT BY : SHRI V.SRINIVAS, DR(CIT) O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) III, HYDERABAD, DATED 12.10.2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THE FIRST EFFECTIVE GRIEVANCE OF THE ASSESSEE I N THIS APPEAL RELATES TO DISALLOWANCE OF ASSESSEES CLAIM FOR DED UCTION UNDER S.80IA(4) OF THE INCOME-TAX ACT, 1961. LEARNED COUNSEL FOR THE ASSESSEE HAS BEEN VERY FAIR IN SUBMITTING THAT THIS ISSUE IS COVERED AGAIN ST THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07, AND THE TRIBUNAL, VID E ITS CONSOLIDATED ORDER DATED 21.1.2011 IN ITA NO.720/HYD/2007 FOR AS SESSMENT YEAR 2003- 04; ITA NO.807/HYD/2009 FOR ASSESSMENT YEAR 2006-07 ; ITA NO.843/HYD/2008 FOR ASSESSMENT YEAR 2004-05 AND ITA NO.1482/HYD/2008 FOR ASSESSMENT YEARS 2005-06 HAS REJECTED THE CORRE SPONDING GROUND OF THE ASSESSEE ON THIS ISSUE AND UPHELD THE VIEW TAKEN BY THE REVENUE AUTHORITIES WITH REGARD TO THE ASSESSEES CLAIM FOR DEDUCTION U NDER S.80IA(4) OF THE ITA NO.1566/HYD/2010 M/S. TAHER ALI INDUSTRIES & PROJECTS (P)LTD, HYDER ABAD 2 ACT. IN THIS VIEW OF THE MATTER, WE FIND NO INFIRM ITY IN THE IMPUGNED ORDER OF THE CIT(A) ON THIS ISSUE FOR THE YEAR UNDER APP EAL. WE ACCORDINGLY UPHOLD THE SAME, REJECTING THE GROUNDS OF THE ASSES SEE ON THIS ISSUE. 3. THE NEXT EFFECTIVE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO DISALLOWANCE OF DEPRECIATION ON ASSETS T AKEN ON FINANCE LEASE. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE FIND THAT THE CIT(A) HAS UPHE LD DISALLOWANCE OF ASSESSEES CLAIM FOR DEPRECIATION IN RESPECT OF ASS ETS TAKEN ON FINANCE LEASE FOLLOWING THE APPELLATE ORDERS OF THE CIT(A) FOR T HE ASSESSMENT YEARS 2004- 05 AND 2006-07. THE ABOVE APPELLATE ORDERS OF THE CIT(A) FOR THE ASSESSMENT YEARS 2004-05 AND 2006-07 ON THIS ISSUE HAVE BEEN CONFIRMED BY THIS TRIBUNAL VIDE ITS ORDER DATED 20.1.2011, CI TED SUPRA, IN ITA NO. 843/HYD/2008 FOR ASSESSMENT YEAR 2004-05 AND 807/HY D/2009 FOR ASSESSMENT YEAR 2006-07, AND THUS, THIS ISSUE IS AL SO COVERED BY THE ABOVE DECISION OF THE TRIBUNAL FOR EARLIER YEARS. THOUGH THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT CONTROVERTED THIS POSITION, HE SUBMITTED THAT THE ASSESSEE HAS PREFERRED A PETITION UNDER S.254(2) OF THE ACT, SEEKING RECTIFICATION OF THE SAID ORDER OF THE TRIBUNAL FOR EARLIER YEARS. BE AS IT MAY, AS THE MATTER STANDS, THIS ISSUE IS ALSO COVERED BY THE ORDER OF THIS TRIBUNAL FOR EARLIER ASSESSMENT YEARS AND AS SUCH, WE FIND N O INFIRMITY IN THE IMPUGNED ORDER OF THE CIT(A). THE GROUNDS OF THE A SSESSEE ON THIS ISSUE ALSO ARE REJECTED. 5. THE NEXT EFFECTIVE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO ADDITION OF RS.75 LAKHS MADE ON ACCOUNT OF HUGE EXPENDITURE CLAIMED BY THE ASSESSEE IN RESPECT OF SUB-CONTRACT S WHICH ARE NOT AMENABLE FOR VERIFICATION. ITA NO.1566/HYD/2010 M/S. TAHER ALI INDUSTRIES & PROJECTS (P)LTD, HYDER ABAD 3 6. WE HAVE BOTH THE PARTIES ON THIS ISSUE AND PE RUSED THE ORDERS OF THE LOWER AUTHORITIES AND OTHER MATERIAL AVAILAB LE ON RECORD. THE DISALLOWANCE IN QUESTION HAS BEEN MADE ON ACCOUNT O F UNVERIFIABLE NATURE OF THE EXPENSES CLAIMED BY THE ASSESSEE. IT IS EVIDE NT FROM THE ORDERS OF THE LOWER AUTHORITIES THAT HUGE EXPENSES CLAIMED UNDER WAGES, EARTH WORK EXCAVATION ETC. ARE NOT SUPPORTED BY PROPER AND COM PLETE VOUCHERS. IN THE FACE OF LOWER PROFIT MARGIN DISCLOSED AND DEFECTS NOTICED IN THE BILLS AND VOUCHERS PRODUCED BY THE ASSESSEE AND ALSO ON ACCOU NT OF ABSENCE OF COMPLETE SUPPORTING VOUCHERS IN RESPECT OF ALL EXPE NSES, AND BEARING IN MIND SIMILAR DISALLOWANCES MADE FOR THE EARLIER ASS ESSMENT YEARS, THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.75,00,000 ON ACCOUNT OF UNVERIFIABLE EXPENSES. THE MAIN PLANK OF DEFENCE O F THE ASSESSEE AGAINST THE DISALLOWANCE MADE FOR THE YEAR UNDER APPEAL WAS THAT NO SPECIFIC DEFECTS IN THE VOUCHERS MAINTAINED BY THE ASSESSEE HAVE BEEN POINTED OUT FOR THE ASSESSMENT YEAR 2007-08. THE CIT(A) HAVI NG REGARD TO THE FACT OF NON-MAINTENANCE OF COMPLETE SUPPORTING VOUCHERS IN RESPECT OF HUGE EXPENDITURE CLAIMED BY THE ASSESSEE UNDER DIFFERENT HEADS DURING THE PREVIOUS YEAR AND CORRESPONDING DISALLOWANCE MADE I N THE PRECEDING YEAR, WHICH HAS ALSO BEEN UPHELD BY THE CIT(A) FOR THAT Y EAR, CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. WE FIN D THAT THIS ISSUE IS ALSO COVERED BY THE DECISION OF THE TRIBUNAL, CITED SUPR A, IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS, INCLUDING ASSESSM ENT YEAR 2006-07, WHEREBY THE CORRESPONDING ADDITIONS MADE ON ACCOUNT OF UNVERIFIABLE NATURE OF EXPENSES AND DEFECTS IN THE BILLS AND VOU CHERS PRODUCED, HAVE BEEN UPHELD BY THE TRIBUNAL. THE TRIBUNAL, VIDE PA RA 5 OF THE SAID ORDER DATED 21.1.2011, CONFIRMING THE CORRESPONDING DISAL LOWANCE OF RS.50 LAKHS MADE FOR THE ASSESSMENT YEAR 2003-04, HAS OBSERVED THAT AS RIGHTLY OBSERVED BY THE DEPARTMENT, THE ASSESSEE COULD NOT ABSOLVE HIS DUTY SIMPLY BY STATING THAT THE AMOUNT WAS PAID BY THE I VRCL AND SINCE THE ASSESSEE COMPANY CLAIMED THE EXPENDITURE, IT IS THE DUTY OF THE ASSESSEE COMPANY TO PROVE THE GENUINENESS OF THE EXPENSES. FACTS AND ITA NO.1566/HYD/2010 M/S. TAHER ALI INDUSTRIES & PROJECTS (P)LTD, HYDER ABAD 4 CIRCUMSTANCES OF THE CASE IN THE YEAR UNDER APPEAL BEING IDENTICAL TO THOSE CONSIDERED BY THE TRIBUNAL FOR THE EARLIER ASSESSME NT YEARS, FOR THE REASONS DISCUSSED IN ITS ORDER DATED 21.1.2011, WE UPHOLD T HE DISALLOWANCE OF RS.75 LAKHS MADE FOR THE YEAR UNDER APPEAL AS WELL. ACCO RDINGLY, IMPUGNED ORDER OF THE CIT(A) ON THIS ISSUE IS ALSO UPHELD AND THE GROUNDS OF THE ASSESSEE ON THIS ISSUE ARE REJECTED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE COURT ON 21 ST APRIL, 2011 SD/- SD/- (G.C.GUPTA) (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER DT/- 21ST APRIL, 2011 COPY FORWARDED TO: 1. M/S. TAHER ALI INDUSTRIES & PROJECTS (P) LTD., 1 -11-251/4/B, TIRUMALA HEIGHTS, BEHIND SHOPPERS STOP, BEGUMPET, HYDERABAD 2. ASSTT COMMISSIONER OF INCOME-TAX, CIRCLE 2(3), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) - III, HYDERABAD. \ 4. COMMISSIONER OF INCOME - TAX II, HYDERABAD. 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.