Shri Jagdishbhai Bhupendrabhai Patel, Ahmedabad V. The Income tax Officer,Ward-6(2), Ahmedabad

ITA 1920/AHD/2012

• Counselvise Citation: 192020514 RSA 2012
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-12-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 31-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR SRDR
• Assessee Lawyers: S N DIVETIA
• Keywords: Business expenditure; Opportunity of being heard; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH BEFORE SHRI G.C.GUPTA, VICE-PRESIDENT (AZ) AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.1920/AHD/2012 ASSESSMENT YEAR:2008-09 SHRI JAGDISHBHAI BHUPENDRABHAI PATEL, PROP. AAJ TRADERS, C-13, NANDISHWAR TENAMENTS, OPP. SUN N STEP CLUB, GHATLODIA, AHMEDABAD 380061 [ PAN NO.ABNPA 2726 K ] / V/S . INCOME TAX OFFICER, WARD-6(2), AHMEDABAD / APPELLANT .. / RESPONDENT /APPELLANT BY SHRI S.N. DIVETIA, AR /RESPONDENT BY SHRI RAHUL KUMAR, SR-DR / DATE OF HEARING 20-12-2012 / DATE OF PRONOUNCEMENT 31-12-2012 !' !' !' !' / // / ORDER PER A.K. GARODIA, ACCOUNTANT MEMBER:- THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XI, AHMEDABAD (CIT(A) FOR SH ORT) DATED 29-06-2012 PERTAINING TO ASSESSMENT YEAR (AY) 2008-09. GROUND RAISED BY ASSESSEE ARE AS UNDER:- 1.1 THE ORDER PASSED U/S 250 ON 29.06.2012 FOR A.Y. 2008-09 BY CIT(A)-XI, ABAD PARTLY UPHOLDING THE ADDITIONS/DISALLOWANCES M ADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NAT URAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT. ITA NO1920./AHD/2012 A.Y.2008-09 SH JAGDISHBHAI B PATEL V. ITO WD-6(2) ABD PAGE 2 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING FOLLOWING ADDITIONS/DISALLOWANCES: (A) DAILY TRUCK DRIVER EX. RS. 82,295 (B) OUT OF SALARY EXP. RS.4,46,067 DISALLOWANCE U/S. 40(A)(IA) RS. 54,381 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE ABOVE SAID ADDI TIONS/DISALLOWANCES. 2. IT WAS SUBMITTED BY LD. AR OF THE ASSESSEE THAT ONLY GROUND NO.2.1 IS TO BE DECIDED AND OTHER GROUNDS ARE ONLY GENERAL GR OUNDS. REGARDING FIRST PARA OF GROUND NO.2.1 I.E. REGARDING DISALLOWANCE O F RS.82,295/- OUT OF DAILY TRUCK EXPENSES, IT WAS SUBMITTED THAT LD. CIT(A) HA S CONFIRMED THE DISALLOWANCE TO THE EXTENT 20% OF SUCH EXPENSES ON THIS BASIS THAT IT WILL COVER THE ELEMENT OF NON-BUSINESS EXPENSES, IF ANY. HE SUBMITTED THAT THERE IS NO PART OF THIS EXPENSE FOR NON-BUSINESS PURPOSE S AND HENCE, THIS DISALLOWANCE SHOULD BE DELETED. 3. REGARDING THE SECOND PART OF GROUND NO.2.1 I.E., DISALLOWANCE OF RS.4,46,067/- OUT OF SALARY EXPENSES, IT WAS SUBMIT TED THAT ENTIRE SALARY PAYMENT FOR THE MONTH OF DEC.07 TO FEB.08 AND FIRS T WEEK OF MAR.08 WAS DISALLOWED FOR THE REASON THAT ASSESSEE COULD NOT P RODUCE VOUCHERS. HE SUBMITTED THAT WHEN THE SALARY PAYMENT FOR THE ENTI RE EARLIER PERIOD UPTO NOV.07 AND FOR THE LATER PERIOD I.E. FOR LAST THRE E WEEKS OF MAR.08 IS BEING ALLOWED, NO DISALLOWANCE SHOULD BE MADE FOR THE MID DLE PERIOD ONLY ON THIS BASIS, THAT VOUCHERS COULD NOT BE PRODUCED BY THE A SSESSEE. 4. REGARDING THE THIRD PART I.E. REGARDING DISALLOW ANCE OF RS.54,381/- U/S. 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), IT WAS SUBMITTED THAT NO DISALLOWANCE IS JUSTIFIED AS PER THE JUDGMENT OF HONBLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF M/S VIRGIN CREATIONS APPEAL NO.302 OF 2007 (GA NO. 3200/2011) BECAUSE ENTIRE AMOUNT OF TDS WA S PAID BEFORE DUE DATE OF FILING OF RETURN OF INCOME. ITA NO1920./AHD/2012 A.Y.2008-09 SH JAGDISHBHAI B PATEL V. ITO WD-6(2) ABD PAGE 3 5. IN REPLY, LD. SR-DR OF THE REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GON E THROUGH THE MATERIALS AVAILABLE ON RECORD. REGARDING THE FIRST GROUND I.E. REGARDING DISALLOWANCE OF RS.82,295/- OUT OF DAILY TRUCK DRIV ER EXPENSES, WE FIND THAT THE THIS IS ADMISSIBLE POSITION THAT, SUPPORTING VOUCHE RS / BILLS IN RESPECT OF THESE EXPENSES COULD NOT BE PRODUCED BY THE ASSESSEE. BUT SINCE THESE EXPENSES ARE INCURRED BY TRUCK DRIVERS ON THEIR OUTSTATION T RIPS IN RESPECT OF SMALL DAY-TO- DAY EXPENSES, IT IS VERY DIFFICULT TO MAINTAIN SUCH SUPPORTING EVIDENCES AND HENCE, WE FEEL THAT 20% DISALLOWANCE IS EXCESSIVE A ND HENCE, WE CONFIRM THE DISALLOWANCE UP TO 10% OF THIS EXPENSES OF RS.4,11, 475/- INSTEAD OF 20%. 7. REGARDING SECOND ITEM I.E., DISALLOWANCE OF RS.4 ,46,067/- OF SALARY EXPENSES, WE FIND THAT OUT OF TOTAL EXPENSES OF RS. 8,60,992/- ON ACCOUNT OF SALARY EXPENSES, THE ASSESSEE COULD PRODUCE VOUCHER S OF ONLY RS.4,14,855/- AND FOR THE BALANCE AMOUNT OF RS.4,46,067/- THE ASS ESSEE COULD NOT PRODUCE THE VOUCHERS AND HENCE, THE SAME WAS DISALLOWED BY THE ASSESSING OFFICER AND LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE AS HA S BEEN NOTED BY LD. CIT(A) IN PARA-4.10 OF HIS ORDER. THE ASSESSEE COUL D NOT PRODUCE VOUCHERS FOR THE MONTH OF DEC.07 TO FEB08 AND FOR FIRST WEEK O F MAR.08. THIS IMPLIES THAT FOR THE REMAINING PERIOD I.E., FOR THE FIRST 8 MONT HS UP TO NOV.07 AND FOR THE LAST THREE WEEKS OF MAR08, VOUCHERS WERE PRODUCED BY TH E ASSESSEE AND EXPENSES INCURRED DURING THIS PERIOD WAS ALLOWED BY ASSESSING OFFICER ALSO. THIS IS NOT THE CASE OF AO THAT NO BUSINESS WAS CAR RIED OUT BY THE ASSESSEE DURING THIS PERIOD OF DEC.07 TO FEB 08 AND FIRST WEEK OF MAR08. HENCE, EVEN IN ABSENCE OF VOUCHERS FOR SALARY PAYMENT FOR THIS PERIOD, IT IS NOT PROPER TO DISALLOW THE ENTIRE CLAIM OF THIS PERIOD IN THE ABS ENCE OF VOUCHERS FOR SALARY PAYMENT OF THIS PERIOD. IT CANNOT BE RULED OUT THAT THERE MAY BE SOME EXCESSIVE CLAIM FOR THIS PERIOD AND HENCE, WE FEEL THAT IF 25% OF THE TOTAL EXPENSES CLAIMED FOR THIS PERIOD IS DISALLOWED, IT WILL MEET THE ENDS OF JUSTICE. ITA NO1920./AHD/2012 A.Y.2008-09 SH JAGDISHBHAI B PATEL V. ITO WD-6(2) ABD PAGE 4 HENCE, WE CONFIRM THE DISALLOWANCE OF RS.1,11,517/- BEING 25% OF RS.4,46,067/- AND DELETE THE BALANCE DISALLOWANCE. 8. REGARDING THE THIRD ITEM I.E. DISALLOWANCE OF RS .54,381/- U/S. 40(A)(IA) OF THE ACT, WE FIND THAT THIS DISALLOWANCE WAS UPHELD BY LD. CIT(A) ON THIS BASIS THAT ASSESSEE COULD NOT FILE CLINCHING EVIDENCE TO PROVE THE FACT OF TDS PAID TO THE GOVERNMENT ACCOUNT IN RESPECT OF PAYMENTS OF RS .25,109/- AND RS.6,800/- TOTAL RS.31,909/-. WE FEEL THAT IN THE INTEREST OF JUSTICE, ONE MORE OPPORTUNITY SHOULD BE PROVIDED TO ASSESSEE TO FURNISH EVIDENCE IN SUPPORT OF THE CLAIM OF ASSESSEE REGARDING THESE PAYMENTS OF TDS AND HENCE, WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THE M ATTER BACK TO THE FILE OF LD. CIT(A) FOR FRESH DECISION. WE WANT TO MAKE IT CLEAR THAT THE BURDEN IS ON THE ASSESSEE TO PRODUCE CLINCHING EVIDENCE TO PROVE THE FACT OF PAYMENT OF TDS TO THE GOVERNMENT ACCOUNT. LD. CIT(A) SHOULD PASS N ECESSARY ORDER AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 9. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- ( G.C.GUPTA ) ( A.K.GARODIA ) (VICE PRESIDENT) (ACCOUNTANT MEMBER) #!$%- 31/12/2012 '!! ( DKP* !' !' !' !' ))* ))* ))* ))* +* +* +* +* / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. $$)0 1 / CONCERNED CIT 4. 1- / CIT (A) 5. *45 )))0, )0, '!! / DR, ITAT, AHMEDABAD 6. 589 :; / GUARD FILE. BY ORDER/ !' ,