ITO,Ward-1(2), kolkata, Kolkata V. M/S Bansal Medlab Pvt Ltd, Howrah

ITA 1643/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3078 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 09-11-2012
• Court: TRIBUNAL
• Department Lawyers: K N JANA
• Keywords: Fair market value
• Section: 143(3); 133A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , !' #! $'# #! $'# #! $'# #! $'#, ,, , ] ]] ] [BEFORE HONBLE SRI K.K.GUPTA, AM & HONBLE SRI MAHAVIR SINGH, JM] '& '& '& '& /ITA NO.1643/KOL/2012 $'( !)*/ ASSESSMENT YEAR : 2005-06 (,- / APPELLANT ) - !' - ( /0,- /RESPONDENT) I.T.O., WARD-1(2) . M/S.BANSAL MEDLAB P.LTD. KOLKATA -VERSUS- KOLKATA (PAN: AACCA 1753 F) ,- 1 2 / FOR THE APPELLANT SHRI K.N.JANA, SR.DR /0,- 1 2 / FOR THE RESPONDENT SHRI SOMNATH GHOSH, ADVOCATE '!3 1 4 /DATE OF HEARING : 18.04.2013 5) 1 4 /DATE OF PRONOUNCEMENT : 6 / ORDER PER SHRI K.K.GUPTA, AM THIS IS AN APPEAL BY THE REVENUE RAISING THE FOLLOW ING GROUNDS :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO ON DIFFERENT H EADS OF EXPENDITURE WITHOUT GIVING ANY SPECIFIC FINDING IN DELETING THE ADDITION ENTIR ELY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE UNDER SECTION 40A(2) OF THE INCOM E TAX ACT WITHOUT GIVING SPECIFIC FINDING REGARDING NATURE OF PAYMENTS FOR BUSINESS E XPEDIENCY. 3. THAT THE ORDER OF THE LD. CIT(A) MAY BE REVERSED AND ASSESSMENT ORDER U./S 143(3) DATED 26.12.2007 MAY BE UPHELD. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE RES PONDENT SUBMITTED THAT THE ISUSES RAISED BY THE REVENUE IN THIS APPEAL STAND C OVERED BY THE LD. CIT(A) IN AN ORDER FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR WHEN ON THE BASIS OF IDENTICAL DISALLOWANCES THE PRESENT LD. CIT(A) NOTED THIS ADD ITION FIT FOR DELETION. HE HAS PERUSED PARA-4 OF THE LD. CIT(A) ORDER FOR HIS PART OF SUBMISSIONS. ITA NO.1643 /KOL/2012 2 3. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD ARE THAT THE ASSESSEE IS A LIMITED COMPANY RENDERING DIAGNOSTIC SERVICES TO THE PATIEN TS FILED NIL IN THE RETURN OF INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT THE AO NOTED THAT A SURVEY HAD BEEN CONDUCTED UNDER THE P ROVISION OF SECTION 133A OF THE ACT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 15 TH MARCH, 2005. ON THE BASIS OF THIS SURVEY REPORT AND ON THE BASIS OF THE SUBMISSIONS A ND ENQUIRY THE AO ISSUED A SHOW CAUSE NOTICE REQUIRING THE ASSESSEE IN RESPONSE OF HAVING FILED THE RETURN ANNEXING THE FINANCIAL STATEMENT AS ON 31.03.2005 VARIOUS EVIDEN CES AND EXPLANATION NOTED AT THE TIME OF SURVEY WHEN THE REBUTTAL WERE CONSIDERED AS HYPOTHETICAL BY THE AO RESULTING IN THE CONFIRMATION OF ADDITIONS ON ESTIMATION BEIN G CONSUMABLE ITEMS, MISCELLANEOUS EXPENSES, PRINTING AND STATIONERY , REPAIRS AND MAI NTENANCE, TRANSPORT AND CONVEYANCE, EQUIPMENT HIRE CHARGES THAT HE DISALLOWED @10%. FUR THER MORE HE BROUGHT TO TAX PROFESSIONAL CHARGES @10% WHICH WHERE PURPORTEDLY T O BE CONSIDERED SEPARATELY UNDER THE PROVISION OF SECTION 40A(2)(B) OF THE ACT . AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY AGIT ATING THE DISALLOWANCE OF EXPENDITURE CLAIMED ON ESTIMATION @10% THEREAFTER A ND ALSO AMOUNT PAID FOR HIRE CHARGES AND PROFESSIONAL FEES AT 10% WITHOUT INDICA TING THE BASIS THEREIN. THE LD. CIT(A) IN HIS DETAILED ORDER CATEGORICALLY CONSIDER ED THAT IT WAS NOT THE CASE OF THE AO TO REPRODUCE THE SURVEY REPORT WHICH ONLY CREATE D BIAS IN THE MIND OF THE AO RESULTING INTO ADHOC DISALLOWANCE FROM THE EXPENDIT URE CLAIMED @ 10%, IN SO FAR AS THE ACTION OF AO DISALLOWING EXPENDITURE CLAIMED U/ S 40A(2)(B) OF THE ACT WAS PURELY UNJUSTIFIED, IN SO FAR AS, THE AO HAD NOT BROUGHT O N RECORD THE FAIR MARKET VALUE TO BE CONSIDERED IN COMPARISON AS EXCESSIVE CLAIMED BY TH E ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT. HE PLACED RELIANCE ON HIS OWN PREDECESSOR ORDER FOR BOTH THE DISALLOWANCES WHEN ON IDENTICAL FACTS THE CIT(A) HELD THAT THE AD DITIONS AND DISALLOWANCES WERE DEVOID OF MERIT. IT HAS BEEN CATEGORICALLY MENTIONE D THAT THE REVENUE HAD NOT PREFERRED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A) FOR T HE A.YR. 2004-05. NO CONTROVERTING MATERIAL HAS BEEN POINTED OUT BY THE LD. DR IN SO F AR AS HE HAS RAISED THE GROUND THAT THE ORDER PASSED U/S 143(3) OF THE ACT BY THE AO SH OULD BE UPHELD. WE HAVE PERUSED THE ORDER AND FOUND THAT THE AO HAS FAILED TO MAKE HIS MIND INCORPORATING THE SURVEY REPORT WHICH MENTIONED ABOUT THE REPLIES GIVEN BY T HE EMPLOYEES OR DOCTORS ABOUT THE ITA NO.1643 /KOL/2012 3 TRANSACTIONS AT THE TIME OF SURVEY WHEN THE BUSINES S TRANSACTIONS CULMINATED INTO THE FINANCIAL STATEMENTS WHICH FIGURES HE ACCEPTED. HAV ING ACCEPTED THESE FIGURES IT WAS THE CASE OF THE AO TO DISALLOW THE SAME ON ESTIMATI ON WITHOUT POINTING OUT ANY SPECIFIC ERROR OR DEFECT TO BE SUSTAINED BY THE LD. CIT(A). IN THIS VIEW OF THE MATTER THE LD. CIT(A) HAS RIGHTLY CONSIDERED THE ASSESSEES OW N CASE RENDERED BY THE PREDECESSOR CIT(A) IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR ON ESTIMATED DISALLOWANCES AND ON HAVING INVOKED THE PROVISION OF SECTION 40A(2)(B ) OF THE ACT. THE LD. CIT(A) HAD DELETED THE SAID ADDITION ON THE AO HAVING BROUGHT NO JUSTIFIABLE OR REASONABLE POINT FOR SUSTAINING THE ADDITION WAS FOLLOWED BY THE INC UMBENT LD. CIT(A) AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. IN THIS VIEW OF THE MATTER WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) RIGHTLY ALLOWING THE AS SESSEES APPEAL BEFORE HIM. THE REVENUE HAS NOT BEEN ABLE TO JUSTIFY THE GROUNDS RA ISED BEFORE US AND ARE DISMISSED. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE COURT ON 19.04.2013. SD/- SD/- [ .#! $'# , ] [ .., ,, , ] [MAHAVIR SINGH ] [K.K.GUPTA] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (4 4 4 4) )) ) DATE: 19.04.2013. R.G.(.P.S.) 6 1 /$$7 87)9- COPY OF THE ORDER FORWARDED TO: 1. M./S.BANSAL MEDLAB P.LTD., 26, DOBSON ROAD, HOWRAH- 711 101. 2 I.T.O., WARD-1(2), KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-I, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 07 /$/ TRUE COPY, 6'/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA NO.1643 /KOL/2012 4