Tavas Construction P Ltd., CHENNAI V. ACIT, CHENNAI

ITA 1761/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7189 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 19-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN IRS
• Assessee Lawyers: G GOPALAN RETD

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , ! , ' # BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI VIKAS AWASTHY JUDICIAL MEMBER. ./ I.T.A. NO.1761/MDS/2014 ( / ASSESSMENT YEAR : 2009 -2010) M/S. TAVAS CONSTRUCTION P. LTD 559, ANNA SALAI, TEYNAMPET, CHENNAI 600 018. [PAN :AACCT 9418N] ( !$ /APPELLANT) VS THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III (1), CHENNAI 600 034. ( %&!$ /RESPONDENT) / APPELLANT BY : SHRI. G. GOPALAN, RETD JCIT. / RESPONDENT BY : SHRI. P. RADHAKRISHNAN, IRS, JCIT. /DATE OF HEARING : 10.12.2014 !' /DATE OF PRONOUNCEMENT : 19.12.2014. ' / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-III, DATED 03. 02.2014 FOR THE ASSESSMENT YEAR 2009-2010. I.T.A.NO.1761 /MDS/2014 . :- 2 -: 2. THE APPEAL HAS BEEN FILED WITH A DELAY OF ONE DAY. AN AFFIDAVIT CITING REASON FOR DELAY IN FILING OF THE APPEAL HAS BEEN PLACED ON RECORD BY THE ASSESSEE. AFTER PERUSAL OF THE SAME, WE AR E SATISFIED THAT REASON FOR DELAY IN FILING OF THE APPEAL IS SUFFICI ENTLY EXPLAINED. THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED TO BE HEARD ON MERITS. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CO NTRACTS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESS MENT YEAR 2009-2010 ON 30.09.2009 DECLARING TOTAL INCOME OF C12,13,900/ -. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.1 43(2) WAS ISSUED TO THE ASSESSEE ON 24.08.2010. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSING OFFICER MADE ADDITIONS IN RESPECT OF CONTRACT EXPENSES. THE ASSESSING OFFICER OBSERVED, THAT ON VERIFICATION OF LEDGER AND VOUCHERS SOME DISCREPANC IES WERE FOUND. THEREFORE, 20% OF THE AMOUNT DEBITED TOWARDS OTHER DIRECT EXPENSES WERE DISALLOWED AND ADDED BACK TO THE TOTAL INCOME. AGGRIEVED, BY THE ASSESSMENT ORDER DATED 29.11 .2011, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY. THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER REDUCED THE DISALLOWANCE FROM 20% TO 10% ON ADHOC BASIS . STILL AGGRIEVED, THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL. I.T.A.NO.1761 /MDS/2014 . :- 3 -: 4. SHRI. G. GOPALAN, APPEARING ON BEHALF OF THE ASSESS EE SUBMITTED THAT, THE AUTHORITIES BELOW HAVE NOT FOUND OUT ANY DISCREPANCIES IN BOOKS OF ACCOUNT AND VOUCHERS SUBMITTED BY THE ASSE SSEE FOR VERIFICATION. THE ASSESSING OFFICER DISALLOWED 20% OF THE AMOUNT MERELY ON ASSUMPTION WITHOUT ANY BASIS. EVEN THE C OMMISSIONER OF INCOME TAX (APPEALS) HAS NOT GIVEN ANY REASONS FOR SUSTAINING 10% DISALLOWANCE. THE COMMISSIONER OF INCOME TAX (APPE ALS) HAS REDUCED DISALLOWANCE FROM 20% TO 10% ON ESTIMATION BASIS. THE ASSESSEE HAD MAINTAINED PROPER BOOKS OF ACCOUNT ALO NGWITH VOUCHERS. NO SPECIFIC DEFICIENCY WAS PIN POINTED BY THE AUTHO RITIES BELOW. THE LD. AUTHORIZED REPRESENTATIVE PRAYED FOR DELETING T HE DISALLOWANCE CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEAL S). 5. SHRI. P. RADHRKRISHNAN, REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE IMPUGNED ORDER. THE LD. DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE ASSESSEE IS A CIVIL CONTRACTOR, IT IS HIGHLY IMPROBABLE THAT IN SUCH TYPE OF BUSINESS THE ASSESS EE COULD MAINTAIN VOUCHERS METICULOUSLY. THEREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS MADE JUST AND REASONABLE DISALLOWANCE S OF 10%. THE LD. DR PRAYED OF SUSTAINING THE IMPUGNED ORDER. I.T.A.NO.1761 /MDS/2014 . :- 4 -: 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF BOTH THE SIDES AND HAVE PERUSED THE CASE FILE. THE ASSESSEE HAS CLAIMED DIRECT EXPENSES UNDER THE HEAD CONTRACT EX PENSES TO THE TUNE OF C6,18,16,994/-. THE ASSESSEE HAD PRODUCED LEDGERS, VOUCHERS ETC. IN SUPPORT OF ITS CLAIM BEFORE THE ASSESSING O FFICER. THE ASSESSING OFFICER WITHOUT HIGHLIGHTING ANY DISCREPANCIES DISA LLOWED 20% OF THE SAID AMOUNT I.E. C1,23,63,398/-. ON APPEAL, THE FIR ST APPELLATE AUTHORITY AGAIN ON MERE ASSUMPTIONS REDUCED THE DIS ALLOWANCES TO 10%. THE REVENUE HAS NOT BEEN ABLE TO SHOW FROM T HE RECORDS THE ALLEGED DISCREPANCIES WARRANTING DISALLOWANCE. THE ASSESSING OFFICER HAS MADE GENERAL REMARKS THAT THERE ARE CERTAIN DIS CREPANCIES. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO ON PR ESUMPTIONS AND ASSUMPTIONS HAS REDUCED THE DISALLOWANCE FROM 20% T O 10%. UNDER THE PROVISIONS OF INCOME TAX ACT, FOR MAKING ANY DISALLOWANCE, DUTY IS CAST UPON THE REVENUE TO SHOW THAT THE BOOKS OF ACCOUNTS ARE NOT MAINTAINED PROPERLY OR THE ASSESSE E HAS CLAIMED EXCESSIVE EXPENDITURE OR HAS CLAIMED DEDUCTION TO W HICH HE IS NOT ENTITLED. IN THE PRESENT CASE NEITHER THE REVENU E HAS BEEN ABLE TO SHOW THAT THE ASSESSEE HAS CLAIMED EXCESSIVE EXPEND ITURE NOR THE REVENUE HAS BEEN ABLE TO SHOW THAT THE BOOKS OF ACC OUNT WERE NOT I.T.A.NO.1761 /MDS/2014 . :- 5 -: MAINTAINED PROPERLY. THERE IS NO PLAUSIBLE REASON TO SUSTAIN DISALLOWANCE. WE FIND MERIT IN THE APPEAL OF THE A SSESSEE. THE IMPUGNED ORDER IS THUS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY , THE 19TH OF DECEMBER, 2014, AT CHENNAI. #$%& ( . ) (A.MOHAN ALANKAMONY) / ACCOUNTANT MEMBER SD/- ( ! ) (VIKAS AWASTHY) ' / JUDICIAL MEMBER '( /DATED:19.12.2014. K.V () *+ ,+ /COPY TO: 1. % APPELLANT 2. / RESPONDENT 3. - ( )/CIT(A) 4. - /CIT 5. +./ 0 /DR 6. /1 2 /GF.