Venugopal Maheswari, Murshidabad V. ITO, Ward-2, Berhampore, Murshidabad, Murshidabad

ITA 1571/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9456 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 01-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 25-07-2014
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAD JCITLD
• Assessee Lawyers: SANJIB K DAS SARMA LD
• Section: 142(1)

Judgement Text

ITA NO. 1571/KOL/2014 VENUGOPAL MAHESHWARI 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA D B ENCH, KOLKATA BEFORE : SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO. 1571/KOL/2014 A.Y 2007-08 VENUGOPAL MAHESWARI PAN: AENPM 0978G 154/3, R.N. TAGROE ROAD BERHAMPORE, MURSHIDABAD PIN 742101. APPELLANT -VS.- INCOME TAX OFFICER WARD-2, BERHAMPORE, MURSHIDABAD PIN 742101. RESPONDENT APPEARANCES BY: SHRI SANJIB K. DAS SARMA, ADVOCATE, LD. AR FOR THE ASSESSEE SHRI RAJENDRA PRASAD, JCIT, LD.DR FOR THE REVEN UE DATE OF HEARING : 11-01- 2017 DATE OF PRONOUNCEMENT : 0 8-02-2017 ORDER SHRI. S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D T: 11-04-2014 PASSED BY THE COMMISSIONER OF INCOME TAX-(APPEALS), XXXVI, KOLKATA FOR THE ASSESSMENT YEAR 2007-08. ITA NO. 1571/KOL/2014 VENUGOPAL MAHESHWARI 2 2. IN THIS APPEAL THE ASSESSEE HAS RAISED AS MANY A S GROUNDS, AMONGST WHICH THE LD.AR FOR THE ASSESSEE AT THE TIME OF HE ARING BEFORE US HAS NOT PRESSED THE GROUND NOS. 1 TO 5. THEREFORE, SUCH GRO UNDS ARE DISMISSED AS NOT PRESSED. THE LAST GROUND BEING GENERAL IN NATURE NE EDS NO ADJUDICATION. HENCE, THE SAME IS ALSO DISMISSED. THUS, THE ONLY EFFECTIVE GROUND REMAINS FOR OUR CONSIDERATION IS TO BE DECIDED AS TO WHETHER TH E CIT(A) JUSTIFIED IN SUSTAINING THE IMPUGNED ADDITION ON ESTIMATION BASI S @ 10% OF THE TOTAL EXPENSES OF RS.8,56,507 BEING RS.85,650/- IN THE FA CTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF CLOTH AND FILED HIS RETU RN OF INCOME DECLARING A TOTAL INCOME AT RS.3,43,670/- ON 28-09-2007. UNDER SCRUTINY, NOTICES U/S. 143(2) AND 142(1) OF THE ACT WERE ISSUED. IN RESPON SE TO WHICH THE LD.AR OF THE ASSESSEE APPEARED AND PRODUCED BEFORE THE AO CA SH BOOK, LEDGER, BANK STATEMENT, BILLS AND VOUCHERS IN SUPPORT OF THE RET URN FILED/CLAIM OF EXPENDITURE. ON VERIFICATION OF THE P & L ACCOUNT, THE AO FOUND THAT THE ASSESSEE HAS DEBITED THE EXPENSES TOTALING TO RS.8, 56,507/- ON ACCOUNT OF SUNDRY EXPENSES (RS.4,52,858/-), CONVEYANCE AND TRA VELLING (RS.1,85,345/-), GENERAL EXPENSES (RS.72,281/-), MESS EXPENSES (RS.9 6,937/-) & REPAIR AND MAINTENANCE (RS.49,086/-). IN SUPPORT OF THESE EXPE NSES AND CLAIMS, THE ASSESSEE FILED MOSTLY SELF MADE DEBIT VOUCHERS. THE CLAIM OF ASSESSEE COULD NOT BE FULLY VERIFIABLE IN ABSENCE OF PROPER EVIDEN CES AND FOUND IT WAS VERY DIFFICULT TO VERIFY SUCH VOUCHERS. ACCORDINGLY, TH E AO DISALLOWED @ 10% OF TOTAL CLAIM OF EXPENDITURE OF RS.8,56,507/- I.E. AT RS.85,650/- ON ESTIMATION BASIS AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE THE CIT-A THE ASSESSEE SUBMITTED THAT IN SPITE OF EXAMINING THE BOOKS OF ACCOUNT, RECORDS AND RELEVANT BILLS AND VO UCHERS, THE AO ADDED THE ITA NO. 1571/KOL/2014 VENUGOPAL MAHESHWARI 3 IMPUGNED AMOUNT OF ADDITION WITHOUT CONSIDERING TH E NATURE OF BUSINESS OF ASSESSEE. BUT, HOWEVER, THE CIT-A CONFIRMED THE ADD ITION MADE BY THE AO AS THE EVIDENCE SUBMITTED BY THE ASSESSEE BY WAY OF DE BIT VOUCHERS ARE NOT CAPABLE FOR CROSS VERIFICATION. 5. BEFORE US THE LD.AR SUBMITS THAT ALL THE EXPENSE S AS CLAIMED BY THE ASSESSEE WERE INCURRED FOR THE PURPOSE OF ASSESSEE S BUSINESS AND ASSESSEE IS ENGAGED IN THE BUSINESS OF SALE OF CLOTH AND REQUIR ES TO INCUR SUCH EXPENDITURE. THE LD.AR FURTHER SUBMITS THAT THE ASSESSEE SUBMITT ED ALL THE REQUIRED DOCUMENTS IN SUPPORT OF EXPENDITURE INCURRED BY THE ASSESSEE BEFORE THE AO. BUT THE AO DOUBTED THE VERACITY OF SUCH DEBIT VOUC HERS BEING SELF MADE VOUCHERS. THE LD.AR ALSO ARGUED THAT THE ADDITION W AS MADE BY THE AO ON THE BASIS OF ESTIMATION AND ON ASSUMPTION AND IS NOT MA INTAINABLE. BEFORE THE AO THE ASSESSEE FILED PROPER EVIDENCES ALONG WITH VARI OUS DETAILS OF CASH BOOK, LEDGER, BANK STATEMENT, BILLS ETC. BOTH THE AO AND THE CIT-A HAVE NOT CONSIDERED THE SAID DETAILS. THE AO AND THE CIT-A H ELD THAT THESE VOUCHERS ARE NOT CAPABLE FOR CROSS VERIFICATION AND PRAYED TO A LLOW THIS GROUND OF APPEAL. 6. ON THE CONTRARY, THE LD.DR SUBMITS THAT THE AO H AS RIGHTLY DOUBTED THE VERACITY OF SUCH DEBIT VOUCHERS AS IT WAS NOT CAPAB LE FOR CROSS VERIFICATION AND RELIED ON THE ORDERS OF BOTH THE AUTHORITIES BELOW. HE ALSO SUBMITS THAT THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE OTHER THAN SE LF MADE VOUCHERS IN SUPPORT OF HIS CONTENTION. 7. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE AO MADE THE ADDITION ON ASSUMPTION BASIS. THIS ACTION OF THE AO WAS CONFIRMED BY THE CIT-A. WE FIND THAT THE ASS ESSEE FILED CASH BOOK, LEDGER, BANK STATEMENT, BILLS AND VOUCHERS IN RESPO NSE TO MANDATORY NOTICES ISSUED BY THE AO. THE AO MADE THE IMPUGNED ADDITION ONLY ON THE BASIS OF ITA NO. 1571/KOL/2014 VENUGOPAL MAHESHWARI 4 ASSUMPTION DOUBTING THE RELEVANT EVIDENCES IN SUPPO RT OF THE EXPENDITURE CLAIMED ARE MOSTLY SELF MADE VOUCHERS. IN OUR OPINI ON THE ADDITION MADE ON ASSUMPTION IS NOT MAINTAINABLE AND SUSTAINABLE IN T HE EYE OF LAW. TAKING INTO CONSIDERATION, SUBMISSIONS OF ASSESSEE AND NATURE O F ASSESSEES BUSINESS, WE DISALLOW SUCH EXPENDITURE @ 5% OF RS. 85,650/- I.E . AT RS.42,825/- AS AGAINST 10% MADE BY THE AO. THEREFORE, THE GROUND OF ASSESS EES APPEAL INVOLVING THE SAME IS PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AS STATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 08 -02-2017. SD/- SD/- WASEEM AHMED S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 0 8-02-2017 COPIES TO : **PP/SPS (1) APPELLANT/ASSESSEE : SHRI VENEGOPAL MAHESWARI 154/3 R.N TAGORE ROAD, BERHAMPORE, MURSHIADABA 742101. (2) RESPONDENT/DEPARTMENT: THE INCOME TAX OFFICER, WARD -2, MURSHIDABAD, LALDIGHI, 57 R.N TAGORE ROAD, BERHAMPO RE, MURSHIADABAD 742 101. (3)COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA