M/s. Moosaram Shivram Das, Sitapur V. Income tax officer., Sitapur

ITA 19/LKW/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59654 (ITAT-LUCKNOW)
• Duration Of Justice: 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 16-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SITA SRIVASTAVA
• Assessee Lawyers: SHARIQ RAIS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC LUCKNOW BEFORE SHRI B. R. JAIN , ACCOUNTANT MEMBER I.T.A. NO. 19 /LUC/1 2 ASSESSMENT YEAR:0 6 - 0 7 M/S MOOSARAM SHIVRAM DAS, VS. INCOME TAX OFFICER, PARAO, SITAPUR. SITAPUR. PAN:AAGFM8408G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHARIQ RAIS, ADVOCATE RESPONDENT BY : S MT. SITA SRIVASTAVA, D. R. DATE OF HEARING : 02/02/2012 DATE OF PRONOUNCEMENT : 02/02/2012 ORDER THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 17 / 10 /20 11 OF LEARNED CIT(A), BAREILLY RAISES THE FOLLOWING GROUNDS: 1. THAT THE LEARNED COURTS BELOW ARE NOT JUSTIFIED IN DISALLOWING PART EXPENSES OUT OF SALARY, SALES PROMOTION AND VEHICLE RUNNING EXPENSES. 2. THAT THE DISALLOWANCES MADE ARE HIGHLY EXCESSIVE. 3. THAT THE FINDINGS OF THE LEARNED COURTS BELOW ARE CONTRARY TO LAW AND FACTS OF THE CASE. 4. THAT THE LEARNED COURT BELOW ARE NOT JUSTIFIED IN SELECTING THE CASE UNDER SCRUTINY. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE DEALS IN PURCHASE AND SALE OF PETROLEUM PRODUCTS AND FERTILIZERS. THE ASSESSING OFFICER OBSERVED THAT THE COMPLETE VOUCHERS OF THE SALA RY EXPENSES HAVE NOT BEEN FILED. H E, THEREFORE, 2 MADE DISALLOWANCE OF ` 30,000/ - ON ACCOUNT OF SALARY EXPENSES. THE ASSESSEE WAS A LSO FOUND TO HAVE CLAIMED ` 73,926/ - AS SALES PROMOTION EXPENSES AND AS THE VOUCHERS WERE NOT FILED, THE ASSESSING OFFICER MADE DISALLOWANCE OF ` 20,000/ - ON THAT ACCOUNT. THE ASSESSING OFFICER ALSO NOTED VEHICLE RUNNING EXPENSES OF ` 1,50,360/ - AND C ONSIDER ING THE PERSONAL USE, MADE DISALLOWANCE OF ` 30,000/ - . O UT OF THE TOTAL DISALLOWANCE OF ` 80,000/ - AS AFORESAID , T HE LEARNED CIT (A) RESTRICTED THE DISALLOWANCE TO ` 50,000/ - AND ALLOWED THE APPEAL PARTLY. 3. I HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. THE CASE OF THE REVENUE IS NOT THAT THE SALARY HAS BEEN PAID FOR THE WORK NOT DONE BY ITS EMPLOYEES. EMPLOYER EMPLOYEE RELATIONSHIP HAS ALSO NOT BEEN DENIED. MERELY BECAUSE VOUCHERS WERE NOT AVAILABLE, DISALLOWANCE OUT OF SALARY FOR THE WORK DONE BY ITS EMPLOYEES IS FOUND UNJUSTIFIED. I, THEREFORE, DIRECT THE DELETION THEREOF. 4. AS REGARDS SALES PROMOTION EXPENSES, THE ASSESSING OFFICER MADE DISALLOWANCE OF ` 20,000/ - AND ALLOWED REST OF THE EXPENSES OF ` 53,926/ - . KE EPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE NATURE AND TURNOVER OF THE BUSINESS, I FIND THAT THE DISALLOWANCE MADE IS EXCESSIVE AND RESTRICT THE SAME TO ` 10,000/ - AS AGAINST ` 20,000/ - MADE BY THE ASSESSING OFFICER. THE ORDER OF THE LEARN ED CIT(A) STANDS MODIFIED ACCORDINGLY. 3 5. AS REGARDS VEHICLE RUNNING EXPENSES, THE ASSESSING OFFICER MADE DISALLOWANCE EQUAL TO 20% OF THE TOTAL EXPENSES OF ` 1,50,360/ - FOR PERSONAL USE. KEEPING IN VIEW THE NATURE AND QUANTUM OF BUSINESS CARRIED BY THE APPELLANT, I CONSIDER IT REASONABLE TO RESTRICT IT TO 10% AND SUSTAIN DISALLOWANCE OF ` 15,000/ - ON ESTIMATE BASIS. THE ORDER OF LEARNED CIT(A) THUS STANDS MODIFIED SO THAT THE TOTAL DISALLOWANCE IS SUSTAINED TO ` 25,000/ - AS AGAINST SUSTENANCE OF ` 50,000 / - MADE BY THE LEARNED CIT(A) ON ALL THE THREE COUNTS AS AFORESAID. 6. AS A RESULT, THE APPEAL STANDS ALLOWED AS ANNOUNCED IN THE OPEN COURT IMMEDIATELY AFTER CLOSE OF THE HEARING ON 02/02/2012. SD/. ( B. R. JAIN ) ACCOUNTANT MEMBER DATED: 02/02/2012 0602 *SINGH COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . D.R.