M/s. Fortune Metals, Kolhapur V. Additional Commissioner Income-tax,

ITA 1903/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1116 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-08-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 20-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , ! # $% , & ' BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ( / ITA NO. 1903/PN/2014 ) * +* / ASSESSMENT YEAR : 2011-12 M/S. FORTUNE METALS, UNIT NO. 5, GANGA BHAGYODAY, 949/A-3, PLOT NO. 1, E WARD, KASBA BAWADA, KOLHAPUR-416006 PAN : AAAFF8763D ....... / APPELLANT ) / V/S. ADDL. COMMISSIONER OF INCOME TAX, RANGE 2, KOLHAPUR / RESPONDENT ASSESSEE BY : SHRI C.H. NANIWADEKAR REVENUE BY : SHRI P.L. KUREEL / DATE OF HEARING : 11-08-2016 / DATE OF PRONOUNCEMENT : 12-08-2016 , / ORDER PER VIKAS AWASTHY, JM : THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATED 21-08- 2014 FOR THE ASSESSMENT YEAR 2011-12. THE SOLITARY ISSUE RAISED IN THE APPEAL IS AGAINST DISALLOWANCE OF CARRIAGE INWARD CHARGES ` 6,91,461/- U/S. 37(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 2 ITA NO. 1903/PN/2014, A.Y. 2011-12 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RESELLING OF METAL SCRAP AND FOUNDRY RAW MATERIAL. THE ASSESSEE FILED ITS RETURN OF INCOM E FOR THE IMPUGNED ASSESSMENT YEAR ON 17-09-2011 DECLARING TOTAL INCOME OF ` 39,11,440/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR S CRUTINY AND ACCORDINGLY, NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 28-09-2012. DURING THE COURSE OF SCRUTINY ASSESSMENT P ROCEEDINGS THE ASSESSING OFFICER INTER ALIA MADE DISALLOWANCE OF EXPENDITURE O F ` 6,91,461/- CLAIMED IN RESPECT OF CARRIAGE INWARD CHARGES. THE ASSESSING OFFICER DISALLOWED THE EXPENDITURE ON THE GROUND THAT THE CLAIM OF ASSESSEE IS SUPPORTED BY SELF MADE DEBIT VOUCHERS ONLY AND THAT THE ASSESSEE HAS NOT FURNISHED NECESSARY INVOICES/ BILLS/LORRY RECEIPTS IN RESPECT OF PAYMENTS MADE FOR CARRIAGE INWARD OF THE MATERIAL. AGGRIEVED BY THE ADDITION MADE IN THE ASSESSMENT ORDER DATED 21-01-2014, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (AP PEALS) AFFIRMED THE FINDINGS OF ASSESSING OFFICER AND SUSTAINED THE ADDITION. 3. SHRI C.H. NANIWADEKAR APPEARING ON BEHALF OF THE ASSESS EE SUBMITTED THAT THE AUTHORITIES BELOW HAVE FAILED TO TAKE IN TO CONSIDERATION THE CONSIGNMENT NOTES WHICH WERE FILED ALONG WITH DEBIT VOUCHERS. THE CONSIGNMENT NOTES ALONG WITH VOUCHERS W ERE FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. THE LD. AR OF THE ASSESSEE HAS PLACED ON RECORD THE CONSIGNMENT NOTES ALONG WITH T HE DEBIT VOUCHERS IN THE FORM OF PAPER BOOK BEFORE THE TRIBUNAL. T HE LD. AR SUBMITTED THAT THE CONSIGNMENT NOTES CLEARLY INDICATE TH E NAME OF CONSIGNOR, NAME OF CONSIGNEE, THE POINT OF ORIGIN AND THE PLACE OF 3 ITA NO. 1903/PN/2014, A.Y. 2011-12 DESTINATION, LORRY NUMBER AND THE PAYMENT TO BE MADE. THE ASSESSING OFFICER HAS RECORDED WRONG FINDING OF FACT THAT THE LORRY NU MBER/LORRY RECEIPTS WERE NOT GIVEN. THE LD. AR SUBMITTED THAT ADMITT EDLY THE ASSESSEE HAD NOT MENTIONED LORRY NUMBER IN THE INFORMATI ON GIVEN IN THE TABULAR FORM. HOWEVER, THE ASSESSEE HAD FURNISHED CO NSIGNMENT NOTES ALONG WITH DEBIT VOUCHERS WHICH CONTAINED ALL THE INFO RMATION. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESS EE HAD MADE SIMILAR PRAYER THAT THE ASSESSING OFFICER HAD NOT TAK EN COGNIZANCE OF THE MATERIAL FURNISHED ALONG WITH THE SELF MADE VOUCHERS. HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) WHILE ADJU DICATING THE ISSUE OVERLOOKED THE SUBMISSIONS MADE BY THE ASSESSEE. THE LD. AR ADMITTED THE FACT THAT SOME OF THE VOUCHERS ARE NOT SU PPORTED BY THE CONSIGNMENT NOTES FOR WHICH REASONABLE DISALLOWANCE MAY BE MADE. 4. SHRI P.L. KUREEL REPRESENTING THE DEPARTMENT VEHEMENT LY SUPPORTED THE FINDINGS OF AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED THE NECESSARY DOCUMENTS IN SUPPORT OF THE CLAIM MADE. THE ASSESSING OFFICER HAS GIVEN A CATEGORIC FIND ING THAT THE CLAIM OF THE ASSESSEE IS ONLY SUPPORTED BY SELF MADE VOUCHERS AND NO OTHER RELEVANT DETAILS AND EVIDENCE WERE FURNISHED IN S UPPORT OF THE CLAIM. THE LD. DR PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORIT IES BELOW. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE IS A METAL SCRAP D EALER. THE ASSESSEE MUST HAVE BEEN INCURRING SOME EXPENDITURE FOR TRANSPORTING OF SCRAP. THE LD. AR OF THE ASSESSEE HAS DRAWN OUR ATTE NTION TO THE CONSIGNMENT NOTES ANNEXED ALONG WITH THE VOUCHERS FURNI SHED IN THE 4 ITA NO. 1903/PN/2014, A.Y. 2011-12 PAPER BOOK. A PERUSAL OF THE SAME SHOWS THAT THE CONS IGNMENT NOTES CONTAIN THE NAME OF CONSIGNOR AND THE CONSIGNEE, THE DE TAILS OF VEHICLE NUMBER AND THE AMOUNT PAID/TO BE PAID. A TEST CHECK W AS APPLIED ON SOME OF THE CONSIGNMENT NOTES AND THE SAME TALLY WITH THE DETAILS GIV EN IN THE TABULAR FORM IN THE ASSESSMENT ORDER. THE LD. AR HAS ADMITTED THAT SOME OF THE DEBIT VOUCHERS ARE NOT SUPPORTED BY THE CONSIGNMENT NOTES/INVOICES FOR WHICH SOME DISALLOWANCE CAN BE MADE. A CLOSE SCRUTINY OF THE DOCUMENTS PLACED ON RECORD REVEAL THAT NEARLY HALF OF THE VOUCHERS ARE NOT SUPPORTED BY CONSIGNMENT NOTES/ INVOICE ETC. HOWEVER, CONSIDERING THE ENTIRETY OF FACTS, WE ARE OF THE OPINION THAT DISALLOWANCE OF 35% OF CARRIAGE INWARD CHARGES CLAIMED BY AS SESSEE WOULD MEET THE ENDS OF JUSTICE. BEFORE PARTING WITH THE ORDER, WE WOULD TAKE TO OBSERVE THAT THE RELIEF GRANTED TO THE ASSESSEE IS WITH RESPECT TO FACTS A ND CIRCUMSTANCES IN THE ASSESSMENT YEAR UNDER APPEAL AND SHOULD NOT BE TAKEN AS PRECEDENT IN THE SUBSEQUENT ASSESSMENT YEARS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED IN THE AFORESAID TERMS. ORDER PRONOUNCED ON FRIDAY, THE 12 TH DAY OF AUGUST, 2016. SD/- SD/- (PRADIP KUMAR KEDIA) (VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 12 TH AUGUST, 2016 RK 5 ITA NO. 1903/PN/2014, A.Y. 2011-12 ,-#./0+. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. # # $ () / THE CIT(A), KOLHAPUR 4. # # $ / THE CIT-I/II, KOLHAPUR/CIT (CENTRAL), PUNE 5. '() *+ , # *+ , , ,-. , / DR, ITAT, B BENCH, PUNE. 6. )/0 12 / GUARD FILE. // ' // TRUE COPY// #3 / BY ORDER, 4 *. / PRIVATE SECRETARY, # *+ , / ITAT, PUNE