ACIT, Cuttack V. M/s. Dushasan Jena, Cuttack

ITA 164/CTK/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3724 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 15-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 164/CTK/2015 ASSESSMENT YEAR : 2010 - 2011 ACIT, CIRCLE 1(1), CUTTACK VS. M/S. DUSHASAN JENA, AT: TALASAHI, JOBRA, CUTTACK PAN/GIR NO. AAAFD 9502 C (APPELLANT ) .. ( RESPONDENT ) ITA NO. 182/CTK/2015 ASSESSMENT YEAR : 2010 - 2011 M/S. DUSHASAN JENA, AT: TALASAHI, JOBRA, CUTTACK VS. ACIT, CIRCLE 1(1), CUTTACK PAN/GIR NO. AAAFD 9502 C (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE RE VE NUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 03/07 / 2017 DATE OF PRONOUNCEMENT : 03 /07 / 2017 O R D E R PER N.S.SAINI, AM THESE ARE CROSS APPEAL S FILED BY THE REVENUE AND THE A SSESSEE AGAINST THE ORDER OF CIT(A) - CUTTACK, DATED 29.1.2015 , FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. NOTICE OF HEARING SENT TO THE ASSESSEE BY SPEED POST HAS NOT BEEN RETURNED BACK UNSERVED. HOWEVER, W HEN THE CASE WAS CALLED FOR HEARING, N ONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION WAS FILED FOR 2 ITA NO. 164/CTK/2015 ITA NO.182/CTK/2015 ASSESSMENT YEAR : 2010 - 2011 ADJOURNMENT. THEREFORE, WE PROCEED TO DECIDE THE CROSS APPEALS AFTER HEARING LD D.R. AND ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. 3. IN REVENUES APPEAL, THE GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) WAS NOT JUSTIFIED IN RESTRICTING THE DISALLOWANCE OF EXPENSES CLAIMED UNDER THE HEADS, I) TRANSPORTATION & HIRE CHARGES, (II) OIL & LUBRICANTS (III) LOADING CHARGES AND (IV) SHIFTING CHARGES TO RS.5,00,000/ - AS AGAINST RS.42,12,029/ - DISALLOWED BY THE ASSESSING OFFICER. 4. THE ASSESSEE IS IN APPEAL AGAINST THE SUSTENANCE OF DISALLOWANCE OF RS.5,00,000/ - OUT OF TOTAL DISALLOWANCE OF RS.42,12,029/ - . 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE IS A TRANSPORT CONTRACTOR AND THAT HAS CLAIMED EXPENDITURE ON THE BILLS AND VOUCHERS OF ANOTHER FIRM NAMELY M/S. BABA LINGARAJ ENTERP RISES, BHUBANESWAR. THE EXPENDITURES AS FOUND TO HAVE BEEN CLAIMED WERE FOR I) TRANSPORTATION & HIRE CHARGES, (II) OIL & LUBRICANTS (III) LOADING CHARGES AND (IV) SHIFTING CHARGES. THE ASSESSING OFFICER THEN CONSIDERING THE BILLS AND VOUCHERS WHICH WERE NOT RELATED TO THE ASSESSEE FIRM DISALLOWED 35% OF THE EXPENDITURES CLAIMED BY THE ASSESSEE UNDER THE ABOVE HEADS AND MADE AN ADDITION OF RS.42,12,029/ - TO THE INCOME OF THE ASSESSEE. 6. ON APPEAL, THE CIT(A) RESTRICTED THE DISALLOWANCE TO RS.5,00,000/ - ON THE GROUND THAT THE NET PROFIT SHOWN BY THE ASSESSEE WAS MORE THAN 12% OF THE GROSS TURNOVER. 3 ITA NO. 164/CTK/2015 ITA NO.182/CTK/2015 ASSESSMENT YEAR : 2010 - 2011 7. LD D.R. RELIED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN RESTRICTING THE DISALLOWANCE OF EXPENDITURE OF RS.5, 00,000/ - AND, THEREFORE, THE ORDER OF THE CIT(A) SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICER SHOULD BE RESTORED. 8. AFTER HE ARING LD D.R . AND PERUSING THE MATERIALS ON RECORD, WE FIND THAT THE ASSESSING OFFICER ON EXAMINING THE BI LLS AND VOUCHERS FOR EXPENSES CLAIMED UNDER THE HEADS I) TRANSPORTATION & HIRE CHARGES, (II) OIL & LUBRICANTS (III) LOADING CHARGES AND (IV) SHIFTING CHARGES FOUND THAT SOME OF THE VOUCHERS WERE RELATED TO SISTER CONCERN OF THE ASSESSEE I.E. M/S. BABA LINGARAJ ENTERPRISES . HENCE, HE DISALLOWED 35% OF THE EXPENSES OUT OF THE TOTAL EXPENSES CLAMED UNDER THE ABOVE HEADS AMOUNTING TO RS.1,20,34,377/ - . 9. ON APPEAL, THE CIT(A) RESTRICTED THE DISALLOWANCE TO RS.5,00,000/ - . 10. WE FIND THAT WHILE MAKING THE DISALLOWANCE, THE ASS ESSING OFFICER HAS NOT POINTED OUT WHICH OF THE SPECIFIC BILLS AND VOUCHERS RELATED TO THE EXPENSES OF SISTER CONCERN M/S. BABA LINGARAJ ENTERPRISES. IN OUR CONSIDERED VIEW, THE DISALLOWANCE SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER ONLY OF THOSE BI LLS AND VOUCHERS WHICH PERTAIN TO SISTER CONCERN M/S. BABA LINGARAJ ENTERPRISES AND NOT ON AN ESTIMATED BASIS OF 35% OUT OF TOTAL EXPENSES CLAIMED BY THE ASSESSEE UNDER THE ABOVE FOUR HEADS OF EXPENDITURES. WE FIND THAT THE CIT(A) HAS RESTRICTED THE DISAL LOWANCE OF EXPENSES TO RS.5 LAK HS. LD D.R . COULD NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT ANY AMOUNT MORE THAN RS.5 LAKHS WAS 4 ITA NO. 164/CTK/2015 ITA NO.182/CTK/2015 ASSESSMENT YEAR : 2010 - 2011 INCURRED BY THE ASSESSEE FOR EXPENSES OF THE SISTER CONCERN M/S. BABA LINGARAJ ENTERPRISES. SIMILARLY, THE ASSESSEE HAS ALSO NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE DISALLOWANCE SUSTAINED AT RS.5 LAKHS OUT OF THE TOTAL EXPENSES BY THE CIT(A) WAS ON HIGHER SIDE. HENCE, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND GROUNDS OF APPEAL OF THE REVE NUE AND ASSESSEE ARE DISMISSED. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCE D IN THE OPEN COURT ON03 /07 /2017 IN THE PRESENCE O F PARTIES. SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 03 /07 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT /REVENUE : ACIT, CIRCLE 191), CUTTACK 2. THE RESPONDENT/ASSESSEE: M/S. DUSHASAN JENA, AT: TALASAHI, JOBRA, CUTTACK 3. THE CIT(A) CUTTACK 4. PR.CIT , CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//