Sri Debasish Bhattacharya, Durgapur V. ITO Ward-2(1), Durgapur, Durgapur

ITA 197/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4820 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-04-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 06-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHURY SR DR
• Keywords: Depreciation; Revenue expenditure
• Section: 143(3); 40(a)(ia); 250

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, KOLKATA BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO.197/KOL/2017 (ASSESSMENT YEAR: 2013-14) SRI DEBASISH BHATTACHARYA...................... APPELLANT [PAN :AMOPB0765F] VS. ITO, WARD-2(1), DURGAPUR.................... ...............................................RESPONDENT APPEARANCES BY: SHRI SUMIT GHOSH, ADVOCATE, APPEARING ON BEHALF OF THE APPELLANT. SHRI ROBIN CHOUDHURY, SR. DR, ADDL. CIT, APPEARING ON BEHALF OF THE RESPONDENT. DATE OF CONCLUDING THE HEARING : APRIL 10 TH , 2019 DATE OF PRONOUNCING THE ORDER : MAY 22 ND ,2019 O R D E R PER J. SUDHAKAR REDDY :- THIS APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - DURGAPUR (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DATED 17.11.2016 FOR ASSESSMENT YEAR 2013-14. 2. THE ASSESSEE IS AN INDIVIDUAL AND RUNS AN ADVERTISEMENT AGENCY, UNDER THE NAME AND STYLE OF RAPID AD MEDIA. HE FILED IS RETURN OF INCOME ELECTRONICALLY ON 03.10.2013 DECLARING TOTAL INCOME OF RS.9,30,830/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) BY THE ASSESSING OFFICER DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.75,30,500/-. HE DISALLOWED THE CLAIM OF THE ASSESSEE AS REVENUE EXPENDITURE OF RS.18,19,754/- CONSISTING OF PURCHASE OF ELECTRICAL AND ELECTRONICS EQUIPMENT VARIOUS ELECTRIC CHARGES SUCH AS TELEVISION, COMPUTERS, DIGITAL CAMERA ETC. HE ALSO DISALLOWED LABOUR EXPENSES OF RS.17,45,220/- ON THE GROUND, THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE CLAIM OF EXPENDITURE UNDER LABOUR CHARGES AND AN AMOUNT OF RS.27,51,632 UNDER THE HEAD TRANSPORT CHARGES ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE SUBSTANTIAL EVIDENCE IN RESPECT OF LOADING, UNLOADING CHARGES AND TRANSPORTATION CHARGES PAID. FURTHER A MINOR DISALLOWANCE U/S 40(A)(IA) ETC. WAS MADE. 2 I.T.A. NO.197/KOL/2017 SRI DEBASISH BHATTACHARYA 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL WITHOUT SUCCESS. FURTHER AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE MR. SUNIT GHOSH, ON BEHALF OF THE LD. COUNSEL FOR THE ASSESSEE AND MR. ROBIN CHOUDHURY, LD. DEPARTMENTAL REPRESENTATIVE ON BEHALF OF THE REVENUE. ON A CAREFUL CONSIDERATION ON THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSING THE PAPERS ON RECORD AND ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAWS CITED, WE HOLD AS FOLLOWS. 5. THE FIRST ISSUE THAT ARISES FOR OUR ADJUDICATION IS WHETHER THE AMOUNT OF RS.18,19,754/- CLAIMED AS EXPENDITURE WAS RIGHTLY DISALLOWED BY THE ASSESSING OFFICER, ON THE GROUND THAT THE SAME IS IN THE CAPITAL FIELD. THE ITEMS ON WHICH THE EXPENDITURE WAS INCURRED ARE GIVEN IN PAGE 3 OF LAST PARA OF LD. CIT(A)S ORDER. THIS IS EXTRACTED BELOW FOR READY REFERENCE: SL. NO. NAME OF THE ITEM AMOUNT (RS.) 1 TV& BATTERY ETC. 3,09,300 2 COMPUTER, HARD DISK 1,800 3 MOBILE ETC 14,200 4 SCANNER 3,600 5 DIGITAL CAMERA 7,630 6 LED TV ETC 4,72,989 7 BATTERY 40,400 8 ELECTRICAL ACCESSORIES 9,69,835 TOTAL 18,19,754 6. ON PERUSAL OF THESE ITEMS DEMONSTRATES THAT THE EXPENDITURE, IN QUESTION, IS IN THE CAPITAL FIELD. IT WAS WRONGLY PLEADED BY THE ASSESSEE THAT THESE ITEMS HAVE GOT DESTROYED BUT HAS NOT FURNISHED EVIDENCE IN SUPPORT OF THE SAME. WE ARE NOT CONVINCED WITH THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT THESE ITEMS IN QUESTION ARE CONSUMERABLE SOURCE. THUS WE UPHOLD THIS DISALLOWANCE AND DISMISS THIS GROUND OF THE ASSESSEE. NEVERTHELESS, WE FIND THAT, IN THE EARLIER ASSESSMENT YEARS, THE ASSESSEE CLAIMED DEPRECIATION ON SUCH PURCHASES OF ELECTRICAL AND ELECTRONIC ITEMS AND THE REVENUE HAS ALLOWED THE SAME. HENCE, IT IS HELD THAT THESE ARE FIXED ASSETS, AND THAT THE 3 I.T.A. NO.197/KOL/2017 SRI DEBASISH BHATTACHARYA SAME SHOULD BE TAKEN INTO THE BLOCK OF ASSETS TO WHICH THEY BELONGS AND DEPRECIATION BE GRANTED ON THE SAME AS PER LAW. THE ASSESSING OFFICER IS DIRECTED TO DO SO. 7. WE NOW TAKE UP THE DISALLOWANCE OF LABOUR CHARGES. THE ASSESSING OFFICER HAS DISALLOWED 70% OF THE CHARGES CLAIMED BY OBSERVING THAT HE IS DOING SO TO PROTECT THE INTEREST OF THE REVENUE AND ON THE GROUND THAT THE ASSESSEE HAS NOT PRODUCED NECESSARY EVIDENCES. IN OUR VIEW, THIS ESTIMATION OF DISALLOWANCE AT 70% IS EXCESSIVE. NO AD-HOC DISALLOWANCE CAN BE MADE TO PROTECT INTEREST OF REVENUE. UNDER THE FACTS AND CIRCUMSTANCES, WE ARE OF THE OPINION THAT INTEREST OF JUSTICE WOULD BE MET IF WE RESTRICT THE DISALLOWANCE TO 20% OF THE TOTAL LABOUR CHARGES CLAIMED. THE BALANCE DISALLOWANCE IS DELETED. THE ASSESSEE GETS PART RELIEF. 8. THE THIRD GROUND IS AGAINST THE DISALLOWANCE OF LOADING AND UNLOADING CHARGES AND TRANSPORTATION CHARGES PAID. HERE ALSO 70% OF THE EXPENDITURE HAS BEEN DISALLOWED FOR THE REASON THAT THE ASSESSEE COULD NOT SUBSTANTIATE ITS EXPENDITURE BY PRODUCING NECESSARY EVIDENCES. ON EXAMINATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE DISALLOWANCE IS HIGHLY EXCESSIVE. WE FEEL THAT INTEREST OF JUSTICE WOULD BE MET IF WE RESTRICT THE SAME TO 20% OF THE TOTAL EXPENDITURE CLAIMED UNDER THIS HEAD. IN THE RESULT, THIS GROUND OF THE ASSESSEE IS ALLOWED IN PART. 9. COMING TO THE LAST GROUND, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT PRESSED THE SAME. HENCE WE DISMISS THIS GROUND AS NOT PRESSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. KOLKATA, THE 22 ND MAY, 2019. SD/- SD/- [ S.S.VISWANETHRA RAVI ] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22.05.2019 (RS, SR. PS) 4 I.T.A. NO.197/KOL/2017 SRI DEBASISH BHATTACHARYA COPY OF THE ORDER FORWARDED TO: 1. SRI DEBASISH BHATTACHARYA, RAJENDRA PRASAD ROAD, DURGAPUR, DIST-BURDWAN, PI 713205. 2. ITO, WARD-2(1), DURGAPUR. 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES