Jose Menachery, Palakkad V. DCIT, Trichur

ITA 159/COCH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1026 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-12-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 20-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR
• Assessee Lawyers: C B M WARRIER

Judgement Text

1 ITA NO. 157 TO 161/COCH/2012 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO.157 TO 161/COCH/2012 (ASSESSMENT YEARS 2004-05 TO 2007-08 & 2009-10) JOSE MENACHERY VS DY.CIT, CENT.CIR. 1, AYODHYA NAGAR THRISSUR PALLIPURAM POST KALLIKKAD, PALAKKAD PAN : ABPPJ8545H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI CBM WARRIER RESPONDENT BY : SHRI M ANIL KUMAR, C.I.T. DATE OF HEARING : 20-12-2012 DATE OF PRONOUNCEMENT : 11-01-2013 O R D E R PER N.R.S. GANESAN (JM) ALL THE APPEALS OF THE TAXPAYER ARE DIRECTED AGAIN ST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX(A) F OR THE ASSESSMENT YEARS 2004-05, 2005-06, 2006-07, 2007-08 & 2009-10. THEREFORE, WE HEARD THE SAME TOGETHER AND DISPOSE THEM BY THIS COMMON O RDER. 2 ITA NO. 157 TO 161/COCH/2012 2. THE FIRST ISSUE FOR CONSIDERATION IS DISALLOWANC E OF EXPENDITURE ON ESTIMATE BASIS. 3. SHRI CBM WARRIER, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT THE TAXPAYER HAS INCURRED SMALL PAYMENT OF COM MISSION AS BROKERAGE IN THE COURSE OF ITS BUSINESS ACTIVITY. HOWEVER, T HE TAXPAYER COULD NOT MAINTAIN ANY VOUCHER FOR SMALLNESS OF THE AMOUNT. THE ASSESSING OFFICER DISALLOWED 40% OF THE EXPENSES. HOWEVER, THE COMMI SSIONER (APPEALS) RESTRICTED THE SAME TO 5%. ACCORDING TO THE LD.REP RESENTATIVE, WHEN THE TAXPAYER HAS INCURRED THE EXPENDITURE FOR CONDUCTIN G THE BUSINESS, THE SAME HAS TO BE ALLOWED. WE HEARD, SHRI M ANIL KUMA R, THE LD.DR ALSO. 4. ADMITTEDLY, THE TAXPAYER COULD NOT PRODUCE ANY V OUCHERS OR BILLS FOR THE EXPENDITURE SAID TO BE INCURRED. IN SPITE OF T HAT, THE ASSESSING OFFICER, AFTER TAKING INTO CONSIDERATION THE NATURE OF THE B USINESS OF THE TAXPAYER HAS DISALLOWED 40% OF THE EXPENDITURE. THE COMMISS IONER OF INCOME- TAX(A), AFTER EXAMINING THE MATTER RESTRICTED THE D ISALLOWANCE ONLY TO 5%. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE COMMISSIONER OF INCOME- TAX(A) IS VERY FAIR ENOUGH IN RESTRICTING THE EXPEN DITURE TO 5% IN THE 3 ITA NO. 157 TO 161/COCH/2012 ABSENCE OF ANY VOUCHERS AND BILLS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE TAXPAYER CANNOT HAVE AN Y GRIEVANCE AT ALL. ACCORDINGLY THE ORDER OF THE COMMISSIONER OF INCOME -TAX(A) IS CONFIRMED ON THIS ISSUE. 5. FOR THE ASSESSMENT YEAR 2009-10, THE TAXPAYER HA S RAISED ONE MORE GROUND WITH REGARD TO ADDITION OF RS.1,24,095 CREDI TED IN THE ACCOUNT OF WELCARE HOSPITAL. THE LD.REPRESENTATIVE FOR THE TA XPAYER SUBMITTED THAT THE TAXPAYER WAS SUPPLYING ELECTRICAL GOODS AND THE PAYMENTS WERE RECEIVED IN CASH WHICH WERE CREDITED IN THE ACCOUNT OF WELCARE HOSPITAL ON DAY TO DAY BASIS. THE LD.REPRESENTATIVE SUBMITTED THAT WELCARE HOSPITAL HAS NOT ACCOUNTED ANY OF THOSE PAYMENTS. IN THE AC COUNTS OF THE TAXPAYER THE OPENING CREDIT WAS RS.77,190 AND THE CLOSING CR EDIT BALANCE WAS RS.2,26,786. THE TOTAL CREDIT BY THE TAXPAYER IN T HE ACCOUNT OF WELCARE HOSPITAL DURING THE YEAR UNDER CONSIDERATION WAS TO THE EXTENT OF RS.1,24,095. ACCORDING TO THE LD.REPRESENTATIVE, M ERELY BECAUSE THE WELCARE HOSPITAL HAS NOT ACCOUNTED THIS PAYMENT IT CANNOT BE ADDED IN THE HANDS OF THE TAXPAYER. WE HEARD, SHRI M ANIL KUMAR , THE LD.DR ALSO. 4 ITA NO. 157 TO 161/COCH/2012 6. THOUGH THE TAXPAYER CLAIMS THAT CASH WAS RECEIVE D ON SUPPLY OF ELECTRICAL GOODS FROM WELCARE HOSPITAL ON DAY TODAY BASIS NO CONFIRMATION OR DOCUMENT COULD BE FILED FOR RECEIPT OF CASH. TH E TAXPAYER COULD NOT RECONCILE THE ACCOUNTS BEFORE THE LOWER AUTHORITIES . NO SUCH RECONCILIATION WAS ALSO FILED BEFORE THIS TRIBUNAL. IN THE ABSENC E OF ANY MATERIAL, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE LOWE R AUTHORITY HAS RIGHTLY MADE THE ADDITION. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 7. IN THE RESULT, THE APPEALS FILED BY THE TAXPAYER ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH JANUARY, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 11 TH JANUARY, 2013 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH