M/s G.R.Associates, Ranchi V. I.T.O.,

ITA 166/RAN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0322 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHOUDHARY ORAON
• Assessee Lawyers: R K GARODIA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL: CIRCUIT BENCH : RANCHI [BEFORE HONBLE S/SHRI N. S. SAINI, AM AND GEORGE M ATHAN, JM] ITA NO. 166/RAN/2014 ASSESSMENT YEAR: 2007-08 M/S. G. R. ASSOCIATES, M/S. R. K. GARODIA & CO., CHARTERED ACCOUNTANTS, 202, SAI APARTMENT, (BEHIND ORIENTAL BANK OF COMMERCE), KUTCHERY ROAD, RANCHI- 834 001 PAN: AAFFG9673C VS THE INCOME TAX OFFICER, WARD 1 (3), RANCHI (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R. K. GARODIA, ADVOCATE RESPONDENT BY SHRI CHOUDHARY ORA ON , DR DATE OF HEARING: 27-10-2015 DATE OF PRONOUNCEMENT: 27-10-2015 O R D E R PER GEORGE MATHAN, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A), RANCHI (JHARKHAND) IN APPEAL NO.73/ RAN/OTH/09-10 DATED 26-02-2014 FOR THE ASSESSMENT YEAR 2007-08. 2. SHRI R,. K. GARODIA, ADVOCATE REPRESENTED ON BEH ALF OF THE ASSESSEE AND SHRI CHOUDHARY ORAON, LEARNED DR REPRE SENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AR THAT THE ONLY ISSUE IN APPEAL WAS AGAINST THE ACTION OF THE LEARNED CIT(A) IN PAR TLY CONFIRMING AN AD HOC ESTIMATED DISALLOWANCE MADE BY THE AO OUT OF TH E INSTALLATION EXPENSES, DPR EXPENSES AND AMC EXPENSES. IT WAS A S UBMISSION THAT ITA NO.166/RAN/2014 (AY: 2007-08) 2 THE ASSESSEE FIRM IS DOING THE BUSINESS OF MAINTENA NCE, INSTALLATION AS WELL AS COMMISSION OF SOLAR LIGHTS ON BEHALF OF A D ELHI BASED PSU NAMELY M/S. CENTRAL ELECTRONIC LIMITED. IT WAS A SU BMISSION THAT THE ASSESSEE HAD PRODUCED ALL THE BOOKS OF ACCOUNT AND VOUCHERS BEFORE THE AO. HOWEVER, THE AO HAD DISALLOWED ONE FIFTH OU T OF THE EXPENSES IN RESPECT OF INSTALLATION EXPENSES, DPR EXPENSES A ND AMC EXPENSES BY HOLDING THAT THE SAID EXPENSES WERE SUPPORTED BY ONLY INTERNAL VOUCHERS AND WERE NOT AMENABLE TO CROSS-VERIFICATIO N. IT WAS A SUBMISSION THAT THE ASSESSEE HAVING PRODUCED ALL TH E EVIDENCES AND NO DEFECT IN ANY OF THE EVIDENCES HAVING BEEN POINT ED OUT BY THE AO, JUST BECAUSE THERE WERE INTERNAL VOUCHERS, THE SAME CANNOT BE DISALLOWED ON AN AD HOC BASIS. IT WAS A SUBMISSION THAT ON APPEAL, THE LEARNED CIT(A) REDUCED THE DISALLOWANCE TO 15%. IT WAS A SUBMISSION THAT NO DISALLOWANCE AT ALL WAS CALLED FOR. 4. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED T HE ORDERS OF THE AO AND THE LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THERE IS NO ALL EGATION AGAINST THE ASSESSEE IN REGARD TO THE NON-PRODUCTION OF THE EVI DENCES. THE AO HAS DISALLOWED THE EXPENSES ON AN AD HOC BASIS ONLY ON THE GROUND THAT THERE WERE INTERNAL VOUCHERS AND HENCE NOT FULLY VE RIFIABLE; THIS IS NOT GROUND ENOUGH FOR MAKING A DISALLOWANCE. IF, AN EXP ENDITURE HAS BEEN INCURRED IN THE COURSE OF BUSINESS AND HAS BEEN INC URRED WHOLLY AND FULLY FOR THE PURPOSE OF BUSINESS, THEN EVEN IF, IT IS VOUCHED BY INTERNAL VOUCHERS, THE SAME IS LIABLE TO BE ALLOWED AND NO A D HOC DISALLOWANCE CAN BE MADE ON ACCOUNT OF THE INABILITY ON THE PART OF THE AO TO VERIFY THE SAID EXPENSES. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ITA NO.166/RAN/2014 (AY: 2007-08) 3 ADDITION AS PARTLY CONFIRMED BY THE LEARNED CIT(A) IS UNSUSTAINABLE AND CONSEQUENTLY STANDS DELETED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CLOSE OF HEARING ON 27-10-2015. ( N .S. SAINI ) ACCOUNTANT MEMBER (GEORGE MATHAN ) JUDICIAL MEMBER DATE : 27.10.15 LK DEKA/SR.PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) - 5. THE DR, ITAT, RANCHI 6. GUARD FILE BY ORDER ITA NO.166/RAN/2014 (AY: 2007-08) 4 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 27.10.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 27.10.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 27.10.2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 27.10. 2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 27,.10.2015 SR.PS 6. DATE OF PRONOUNCEMENT 27.10.2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 27.10.2015 SR.P S 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER