A.C.I.T., Circle-3, Asansol, Asansol V. M/s. B. D. Singh .(Firm), Asansol

ITA 1656/KOL/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7238 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 23-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRAVORTY
• Assessee Lawyers: S M SURANA
• Keywords: Depreciation

Judgement Text

, , , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [ . . . . , ,, , . .. . ! ! ! !. .. . , , , , '# '# '# '# , '# '# '# '# ] [BEFORE HONBLE SHRI N. VIJAYA KUMARAN, J M & HONBLE SHRI C. D. RAO, AM] $ $ $ $ / I.T.A NO.1656/KOL/2009 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2006-07 ASSTT. COMMISSIONER OF INCOME TAX -VS.- M/S. B. D. SINGH (FIRM) CIRCLE-3, ASANSOL. BURDWAN [PAN : AAGFB 7827 A ] [ *+ *+ *+ *+ /APPELLANT ] ]] ] [ -. -. -. -.*+ *+*+ *+/ // / RESPONDENT ] ]] ] *+ *+ *+ *+ / FOR THE APPELLANT : SHRI P. K. CHAKRAVORTY -.*+ -.*+ -.*+ -.*+ / FOR THE RESPONDENT : SHRI S. M. SURANA '/ /ORDER . . . . , PER N. VIJAYA KUMARAN, J. M. THIS APPEAL BY THE DEPARTMENT FOR ASSESSMENT YEAR 2006-07 IS DIRECTED AGAINST ORDER OF LD. CIT(A), ASANSOL DATED 17.06.2009. 2. THE FIRST ISSUE IS ON THE DISALLOWANCE OF DEPREC IATION ON PAY LOADERS. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON I DENTICAL SET OF CIRCUMSTANCES FOR THE ASSESSMENT YEAR 2005-06 IN ASSESSEES OWN CASE, THE TRIBUNAL HAS ALLOWED HIGHER RATE OF DEPRECIATION ON PAY LOADERS AND FOR THE ASSESSMENT YEAR 2006-07, IT WAS ALSO ALLOWED @ 30%. TRIBUNALS ORDER DATED 31.07.2007 IN ITA NO.1567/KO L/2008 WHEREIN THE TRIBUNAL HAS ALLOWED DEPRECIATION @ 40% INSTEAD OF 25% WHICH WAS ALLOWED BY THE LD. CIT(A). IN THE PRESENT CASE BEFORE US, LD. CIT(A) DIRECTED THE ASSESSING OFFICE R TO ALLOW 30% ON THE ABOVE REFERRED PAY LOADERS RUNNING ON HIRE BY THE ASSESSEE. THEREFORE, AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE FINDING OF THE LD. CIT(A) IS S UPPORTED BY THE RATIO OF DECISION BY THE TRIBUNAL. HENCE, DIRECTION OF THE LD. CIT(A) TO ALLOW DEPRECI ATION @ 30% QUITE JUSTIFIED FOR THE ASSESSMENT YEAR 2006-07 AND THIS GROUND OF THE REVENUE IS DISM ISSED. [ ITA NO. 1656/KOL/2009] 2 4. COMING TO THE CARRIAGE EXPENSES AS ADJUDICATED I N THE SECOND ISSUE, ASSESSING OFFICER HAS DISALLOWED RS.3.00 LAKHS OUT OF THE TOTAL CARRIAGE EXPENSES OF RS.3,52,30,811/-. ASSESSING OFFICER WAS OF THE VIEW THAT EXPENSES WERE NOT SUPPORTED BY BILLS AND VOUCHERS. ASSESSING OFFICER MADE ASSUMPTION THAT INFLATION IN THE EXPENSES CAN NOT B E RULED OUT. ASSESSING OFFICER DISALLOWED RS.3.00 LAKHS FROM THE TOTAL. ON APPEAL TO THE LD. CIT(A), IT WAS CONTENDED THAT THE ENTIRE CARRIAGE EXPENSES ARE GENUINELY, WHOLLY AND EXCLUSIVELY INCU RRED FOR BUSINESS PURPOSES AND ARE FULLY VERIFIABLE. THERE IS NO MATERIAL IN POSSESSION OF T HE ASSESSING OFFICER FOR DISALLOWING THIS AS AN ADHOC DISALLOWANCE. THE ASSESSEE HAS FURNISHED ALL THE DETAILS AND ALL THE DETAILS WERE FULLY VERIFIABLE AND ON ALL THESE CARRIAGE CHARGES TDS HA VE BEEN DEDUCTED BY THE ASSESSEE ON MONTH TO MONTH BASES. THIS IMPRESSED THE LD. CIT(A) TO ACCEP T THE EXPLANATION OF THE ASSESSEE AS VALID AND ULTIMATELY HE DELETED THE ENTIRE ADDITION WHICH WE ALSO AGREE AFTER CONSIDERING THE RIVAL SUBMISSIONS OF THE PARTIES. THERE IS NO MATERIAL TO DISBELIEVE THE CLAIM OF THE ASSESSEE PARTICULARLY WHEN ASSESSEE HAS DEDUCTED TDS MONTH TO MONTH BASIS . THEREFORE, WE AGREE WITH THE FINDING OF THE LD. CIT(A). ULTIMATELY REVENUE FAILS ON THIS CO UNT. 5. COMING TO THE LAST GROUND ON ACCOUNT OF DELETION OF RUNNING EXPENSES MADE BY THE ASSESSING OFFICER, WE HEARD THE RIVAL SUBMISSIONS A ND PERUSED THE MATERIAL AVAILABLE ON RECORD. ASSESSING OFFICER HAS DISALLOWED A SUM OF RS.2,50,0 00/- OUT OF PAY LOADER RUNNING EXPENSES, LABOUR WAGES, DIESEL & MOBIL EXPENSES, TYRE AND REP AIRING EXPENSES AND OTHER EXPENSES FOR ALLIED JOB INCURRED, TOTAL COMES TO MORE THAN RS.1, 29,51,285/-. HOWEVER, ASSESSEE CONTENDED THROUGHOUT THE PROCEEDINGS THAT THE EXPENSES WERE I NCURRED EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND ARE VARIAFIABLE. THIS IS DIFFERENT ISS UE AS OF THE DIFFERENT ONE WHICH WE HELD UNDER THE HEAD CARRIAGE EXPENSES. THERE IS A SPECIFIC OBSER VATION OF THE LD. CIT(A) AND THAT DIESEL AND MOBIL EXPENSES ARE SUPPORTED BY BILLS AND VOUCHERS AND ARE VERIFIABLE. HOWEVER, COMING TO THE EXPENDITURE OF RS.1,29,51,285/-, THOSE AMOUNTS WHIC H WERE SUPPORTED BY BILLS AND VOUCHERS AND AFTER VERIFICATION HAVE TO BE EXCLUDED WHICH THE AR GUMENT OF THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE BEFORE MAKING THE DISALLOWANCES. ON VERIFICATION OF RECORDS, ASSESSING OFFICER DISALLOWED RS.2,50,000/- OUT OF THE TOTAL RUNNING E XPENSES ON THE GROUND OF INFLATION OF SUCH EXPENDITURE. HOWEVER, LD. CIT(A) HAS ALSO CAME TO T HE CONCLUSION THAT ASSESSING OFFICER OVER- LOOKED THE FACTORS THAT THE EXPENDITURE ARE VERIFIA BLE. IN OTHER WORDS, LD. CIT(A) WAS OF THE VIEW THAT EXPENDITURE LIKE LABOUR CHARGES FOR COAL BREAK ING, LOADING CHARGES, DRIVER & KHALASHI [ ITA NO. 1656/KOL/2009] 3 EXPENSES, LABOUR WAGES (ALLIED JOB) AND OTHER EXPEN SES (ALLIED JOB) REQUIRES TO BE TREATED NOT ON THE PART OF THE ABOVE BILLS AND VOUCHERS. 6. CONSIDERING THE ABOVE SUBMISSIONS AND AFTER PERU SING THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THE DISALLOWANCE IS TO BE CONS IDERED ON THIS COUNT OF RUNNING EXPENSES WHERE PAYMENTS HAD BEEN MADE IN CASH AND IT WOULD MEET TH E ENDS OF JUSTICE, AS WE ARE OF THE VIEW THAT LD. CIT(A) RESTRICTED THE DISALLOWANCE TO RS.50,000 /- ON THE LOWER SIDE AND ON THE SAME WAY, THAT DISALLOWANCE MADE BY THE ASSESSING OFFICER TO THE T UNE OF RS.2,50,000/- IS ON THE HIGHER SIDE. HENCE, AFTER CONSIDERING THE ABOVE SUBMISSIONS, WE ARE OF THE VIEW THAT UNDER THIS HEAD RUNNING EXPENSES, THE ADDITION HAS TO BE ULTIMATELY RS.1.0 0 LAKH AND TO THAT EXTENT REVENUE SUCCEEDS. 7. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY A LLOWED. '/ '/ '/ '/ #' #' #' #' 0 1 23 0 1 23 0 1 23 0 1 23 !# !# !# !# ORDER PRONOUNCED IN THE COURT ON 11.10.2010 SD/- SD/- [ . .. . ! ! ! !. .. . , ,, , '# '# '# '# ] [ . . . . , ,, , ] [ C. D. RAO ] [ N. VIJAYAKUMARAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER D ATED : 11 TH OCTOBER, 2011. '/ 4 -%% 5''/ COPY OF THE ORDER FORWARDED TO: 1. *+ /APPELLANT : ASSTT.COMMISSIONER OF INCOME TAX, CIR CLE-3, PARMAR BUILDING, 54, G. T. ROAD (WEST), ASANSOL-713304. 2 -.*+ / RESPONDENT : M/S. B.D. SINGH (FIRM), P.O. RUPNAR AYANPUR BAZAR, DIST. BURDWAN, PIN-713 364. 3. %/ - / CIT, 4. %/ ()/ CIT(A), KOLKATA. 5. =%1 -%/ DR, KOLKATA BENCHES, KOLKATA [. -%/ TRUE COPY] '// BY ORDER, /ASSTT REGISTRAR [KKC ?@ %A %B /SR.PS]