LAXMMAN DAS SABDANI, Jaipur V. ITO, Jaipur

ITA 168/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5448 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Assessee Lawyers: NITIN SETHI

Judgement Text

ITA NO. 60/JP/13 M/S CHEER SAGAR V. CIT, CIRCLE-3, JAIPUR 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO. 60/JP/13 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 M/S CHEER SAGAR , G - 17, SJS HIGHWAY, BANI PARK, JAIPUR CUKE VS. THE ACIT, CIRCLE - 3, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABFC 7023N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI NITIN SETHI ( CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12.01.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 21 /01/ 2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A)- I, JAIPUR DATED 29.11.2012 IN THE SOLE GROUND TAK EN BY THE ASSESSEE, THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF DISALLO WANCE AMOUNTING TO RS. 3,00,000/- AS AGAINST RS. 5,67,384/- (DISALLOWE D BY THE AO) WHICH CONSTITUTE 5% OF VARIOUS EXPENSES DEBITED IN THE PR OFIT AND LOSS ACCOUNT. ON PERUSAL OF THE ASSESSMENT ORDER, IT IS NOTED THA T THE AO HAS ITA NO. 60/JP/13 M/S CHEER SAGAR V. CIT, CIRCLE-3, JAIPUR 2 DISALLOWED 5% OF VARIOUS EXPENSES DEBITED IN THE P ROFIT AND LOSS ACCOUNT NAMELY GOODS TRANSPORTATION EXPENSES, DEL IVERY VAN MAINTENANCE EXPENSES, FACTORY LABOUR TEA AND FOOD EXPENSES, SELLING AND MAINTENANCE EXPENSES, REPAIR AND MAINTENANCE EX PENSES, TRAVELLING EXPENSES AND ADMINISTRATIVE EXPENSES. AS PER THE OBSERVATION OF THE AO, MOST OF THE VOUCHERS WERE S ELF MADE, UNSIGNED BY THE RECIPIENT AND THE EXPENSES HAVE BEEN INCURR ED IN CASH HENCE THE PAYMENT MADE IN CASH REMAINED UNVERIFIABLE. IN VIE W OF THAT HE HAS DISALLOWED 5% OF TOTAL EXPENSES AMOUNTING TO RS. 5,67,384/- WHICH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 2. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) CONFIRMED THE DISALLOWA NCE OF RS. 3,00,000/- AS AGAINST RS. 5,67,384/- DISALLOWED BY THE AO HOLDING THAT THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION EITH ER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR IN APPELLATE PROCEEDIN GS REGARDING THE DECLINE IN THE NP RATE EVEN THOUGH THE TURNOVER HAS GOT DOWN AND THE GP RATE HAS IMPROVED. HENCE IN ORDER TO PROTECT TH E INTEREST OF THE ITA NO. 60/JP/13 M/S CHEER SAGAR V. CIT, CIRCLE-3, JAIPUR 3 REVENUE THE DISALLOWANCE OF EXPENSES MADE BY THE AO WAS RESTRICTED TO RS. 3,00,000/-BY LD. CIT(A). 2.2 WE HAVE HEARD THE LD. AR AS WELL AS THE DR. FR OM THE PERUSAL OF THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT IT I S A CLEAR CASE OF ADHOC DISALLOWANCE DONE BY THE AO AND SUSTAINED BY THE L D.CIT(A). THERE IS NO SPECIFIC FINDING EITHER BY THE AO OR BY THE LD. CIT(A) AS TO WHICH ALL EXPENSES HAVE BEEN INCURRED FOR NON-BUSINESS PURPOS ES OR INFLATED OR BOGUS IN NATURE. IN THE ABSENCE OF THE SPECIFIC FI NDING, THE DISALLOWANCE OF THE EXPENSES ON ADHOC BASIS CANNOT BE SUSTAINED IN EYE OF LAW. HENCE THE GROUND TAKEN BY THE ASSESSEE IS ALLOWED. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/01/ 2016 SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 21 / 01 /2016 ITA NO. 60/JP/13 M/S CHEER SAGAR V. CIT, CIRCLE-3, JAIPUR 4 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S CHEER SAGAR,JAIPUR 2. THE RESPONDENT- THE ACIT, CIRCLE-3, JAIPUR 3. THE CIT(A)-I, JAIPUR 4. THE CIT-I, JAIPUR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO 60/JP/13) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NO. 60/JP/13 M/S CHEER SAGAR V. CIT, CIRCLE-3, JAIPUR 5 SL. NO. DATE INITIAL 1 DATE OF DICTATION 2 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER OTHER MEMBER 3 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S 4 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. 6 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 9 DATE OF DISPATCH OF THE ORDER