M/s Mountain Steel Pvt. Ltd., Chandigarh V. ITO, W-1(3), Chandiarh

ITA 1714/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9704 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 28-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SHRI. SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1714/CHD/2017 ASSESSMENT YEAR: 2012-13 M/S MOUNTAIN STEEL PVT. LTD. VS. THE ITO # 268, SECTOR-9C, WARD-1(3) CHANDIGARH CHANDIGARH PAN NO. AADCM7597A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. T.N. SINGLA REVENUE BY : SMT. MANJEET SINGH DATE OF HEARING : 21/08/2018 DATE OF PRONOUNCEMENT : 26/09/2018 ORDER PER DR. B.R.R. KUMAR, A.M: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A)-1 CHANDIGARH DT. 29/09/2017. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED FOLLOW ING GROUNDS: 1. THAT THE ORDER OF HONBLE CIT(A) IS BAD, AGAINST TH E FACTS & LAW. 2. THAT THE HONBLE CIT(A) HAS WRONGLY UPHELD THE DISA LLOWANCE OF EXPENSES OF RS. 20,000/- PAID FOR CLUB MEMBERSHIP AND SUBSCRIPT ION. 3. THAT THE HONBLE CIT(A) HAS WRONGLY UPHELD DISALLOW ANCE OF EPF AND ESI EXPENSES OF RS. 32,139/- 4. THAT THE HONBLE CIT(A) HAS WRONGLY DISALLOWED PART OF THE EXPENSES INCURRED ON RUNNING AND MAINTENANCE OF CAR. 5. THAT THE HONBLE CIT(A) HAS WRONGLY GIVEN DIRECTION TO ENHANCE THE INCOME OF A.Y. 2014-15 BY RS. 5,51,000/- WITHOUT APPRECIAT ION OF FACTS AND WITHOUT GIVING ANY SHOW CAUSED IN THIS REGARD. 3. GROUND NO. 1 IS GENERAL IN NATURE. 4. GROUND NO. 2 NOT PRESSED. 2 5. GROUND NO. 3 RELATES TO ADDITION OF RS. 32,139/- ON ACCOUNT OF NON- PAYMENT OF EPF AND ESI IN THE RESPECTIVE ACCOUNTS. THE LD. AR SUBMITTED THAT IT WAS PAID BEFORE THE DUE DATE OF FILING OF THE RETUR N. HENCE AS PER PROVISION TO THE SECTION 43B(B) THIS ADDITION MADE BY THE ASSESS ING OFFICER IS NOT WARRANTED AND HENCE HEREBY DIRECTED TO BE DELETED. 6. GROUND NO. 4 PERTAINS TO DISALLOWANCE OF EXPENSE S OF RS. 1,91,626/- ON ACCOUNT OF CAR MAINTENANCE. THE LD. AR SUBMITTED TH AT THE PAYMENT OF THE CAR WAS MADE FROM THE FUNDS OF THE COMPANY AND USED BY THE COMPANY THOUGH THE RC SHOWS THE NAME OF THE DIRECTOR. ALL THE RUNN ING EXPENSES WERE FOR THE BUSINESS OF THE COMPANY AND CLAIMED IN THE BOOKS OF ACCOUNTS AND SO AS THE DEPRECIATION. 7. LD. DR RELIED ON THE ORDER OF THE LD. CIT(A) WHO RESTRICTED THE DISALLOWANCE TO 1/5 TH OF THE TOTAL EXPENSES. 8. SINCE THE CAR WAS PURCHASED AND USED BY THE COMP ANY WHOLLY FOR THE BUSINESS PURPOSE AND REVENUE HAS NOT BROUGHT ANYTHI NG ON RECORD TO PROVE THE NON BUSINESS USE OF THE CAR, NO DISALLOWANCE IS CAL LED FOR. 9. GROUND NO. 5 RELATES TO ENHANCEMENT OF INCOME FO R THE A.Y. 2014-15. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE HAS RECEIV ED ADVANCE PAYMENT FROM ONE ENTITY NAMELY LAXMI TRADING CO. OF RS. 5,51,000 /- ON 01/02/2011 VIDE CHEQUE NO. 463496 AND THE MATERIAL WAS DISPATCHED T O LAXMI TRADING CO. ON 03/02/2011 THROUGH SHAURYAVEER ENTERPRISES VIDE BIL L NO. 1366 AND VEHICLE NO. H.P. 12C 2335 WEIGHING 14.10 TONS. THE DOCUMENTS PE RTAINING TO THE TRANSPORT OF GOODS WERE PRODUCED AND WERE ACCEPTED BY THE REVENU E THE FACT OF WHICH WAS ACCEPTED BY THE LD. CIT(A) ALSO. 10. HOWEVER, THE LD. CIT(A) DIRECTED THAT SINCE T HE AMOUNT WAS SQUARED OFF ON 31/03/2014 WITH SHAURYAVEER ENTERPRISES IN 2014 IT SHOULD BE ASSESSED IN THE 3 A.Y. 2014-15. IT WAS SUBMITTED BEFORE US, THAT THE ADVANCE HAS RECEIVED, AND THE MATERIAL WAS SUPPLIED THROUGH THE SISTER CONCER N SHAURYAVEER ENTERPRISE IN THE SAME YEAR NO ADDITION WAS CALLED FOR IN THE SUB SEQUENT YEARS. THE ASSESSEE PRODUCED THE LEDGER COPIES OF SHAURYAVEER ENTERPRIS E IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, LEDGER COPY OF THE ASSESSEE AND TH E BOOKS OF ACCOUNT OF SHAURYAVEER ENTERPRISE, AND ALSO COPY OF ACCOUNT OF LAXMI TRADING CO. IN THE BOOKS OF THE ASSESSEE WHICH PROVES THE COMPLETION O F THE TRANSACTION TO THE HILT. HENCE THE DIRECTIONS OF THE LD. CIT(A) ARE FOUND TO BE INVALID. 11. AS A RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (DR. B.R.R. K UMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26/09/2018 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR