Sri Bajrang Fabrics, CHENNAI V. ACIT, CHENNAI

ITA 1994/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7852 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 01-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: K MEENAKSHISUNDARAM ITP
• Keywords: Agreed addition
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1994/MDS/2016 ( / ASSESSMENT YEAR: 2005-06) M/S. SRI BAJRANG FABRICS, 17, GODOWN STREET, CHENNAI-600 001. VS ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-IX, CHENNAI. PAN: AAHFS6094F ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. K.MEENAKSHISUNDARAM, ITP /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 6 TH OCTOBER, 2016 /DATE OF PRONOUNCEMENT : 8 TH DECEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 13, CHENNAI DATED 13.05.2016 IN ITA NO.63/CIT(A)-13 /2005- 06 PASSED UNDER SECTION 143(3) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER BEING DISALLOWANCE OF VARIOUS EXPENSES AMOUNTING TO 2 ITA NO.1994/MDS/2016 RS.2,84,445/- BY HOLDING THAT THE ASSESSEE HAS AGREED FOR THE SAME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS AS WHOLESA LE DEALER IN TEXTILES FILED ITS RETURN OF INCOME FOR THE ASSE SSMENT YEAR 2006-07 ON 30.10.2006 ADMITTING TOTAL INCOME OF RS.3,24,664/-. THE CASE WAS SELECTED FOR SCRUTINY U NDER CASS AND NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSESSEE. THEREAFTER THE LEARNED ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF TH E ACT ON 29.12.2008, WHEREIN HE DISALLOWED THE FOLLOWING EXP ENSES BECAUSE THE ASSESSEE COULD NOT PRODUCE NECESSARY BI LLS AND VOUCHERS AND OTHER RELEVANT DOCUMENTARY EVIDENCE:- A) CARTAGE & COOLY : RS. 49,069 B) EXPENSES NOT NARRATED :RS. 12,032 C) LORRY FREIGHT :RS.1,46,000 D) GANGADHARAN TRAVELLING :RS. 34,824 D) CONVEYANCE & MEDICALS :RS. 20,663 E) NEETALENE SILK MILLS P.LTD. :RS. 21,587 TOTAL RS.2,84,445 3 ITA NO.1994/MDS/2016 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER BY OBSERVING AS UNDER:- I HAVE CAREFULLY GONE THROUGH THE FACTS OF THE CASE, GROUNDS OF APPEAL, SUBMISSION OF THE ASSESSEE AND THE REPORT OF THE AO AND THE CASE IS ADJUDICATED AS UNDER:- FROM THE REMAND REPORT UNDER RULE 46A OF THE I.T.RULES, 1962, OF THE AO, IT IS CLEAR THAT THE APPELLANT AGREED FOR THE ADDITIONS MADE BY THE AO DURING THE ASSESSMENT STAGE ITSELF AND IT WAS EVIDENT FROM THE ORDER SHEET ALSO AND AS THE ADDITIONS MADE WERE AGREED ADDITIONS, ACCORDINGLY, THE AO HAS REPORTED THAT THE ASSESSEES REQUEST CANNOT BE ACCEPTED. ASSESSEE HAS GOT OPPORTUNITY DURING THE ASSESSMENT PROCEEDINGS FOR GETTING HIS VOUCHERS VERIFIED. THE SAME WERE VERIFIED BY THE AO AND THEREAFTER ON AGREED BASIS SUCH ADDITIONS WERE MADE. DURING THE APPEAL PROCEEDINGS, THE AR SUBMITTED THE DETAILS AND WRITTEN SUBMISSIONS, THE SAME WERE FORWARDED TO THE AO FOR VERIFICATION. THUS ASSESSEE GOT ANOTHER OPPORTUNITY TO GET HIS CONTENTION VERIFIED AND THEREAFTER THE AO HAS REPORTED UNDER RULE 46A OF THE I.T.RULES, 1962 AND CONSIDERING THAT THE APPELLANT DO NOT SUCCEED IN APPEAL. THEREFORE, GROUNDS OF APPEAL OF THE ASSESSEE ARE DISMISSED. 5. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THERE IS NO PROVISION IN THE ACT FOR MAKING AGREED ADDITION. HE FURTHER ARGUED BY STATING THAT FOR CERTAIN EXPENSES PROPER VOUCHERS COULD NOT BE OBTAINED BUT THAT 4 ITA NO.1994/MDS/2016 DOES NOT MEAN THE ASSESSEE HAS NOT INCURRED SUCH EXPENDITURE. THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER STRESSED THAT MOST OF THE EXPENSES LIKE CARTAGE AND COOLIE, LORRY FREIGHT, TRAVELLING & CONVEYANCE ETC., ONLY I NTERNAL VOUCHERS COULD BE PREPARED BECAUSE THE SERVICE PROV IDERS WOULD NOT ISSUE BILLS. IT WAS THEREFORE SUBMITTED T HAT THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER MAY BE DELETED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND, ARGUED IN SUPPORT OF THE ORDERS OF THE REVENU E AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. WE AGREE WITH THE SUBMISSION OF THE LEARNED AUTHORIZED REPRESENTATIVE THAT WITH RESPECT TO CERTAIN EXPENSES LIKE COTTAGE AND C OOLIE, LORRY FREIGHT, TRAVELLING & CONVEYANCE ETC., THE SERVICE PROVIDERS WOULD NOT ISSUE PROPER BILLS. IN SUCH OCCASION, THE ASSESSEE HAS TO DEPEND UPON THE INTERNAL VOUCHERS MAINTAINED BY IT. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE 5 ITA NO.1994/MDS/2016 ASSESSEE AND THE NATURE OF EXPENSES, WE ARE OF THE CONSIDERED VIEW THAT ONLY 50% OF LORRY FREIGHT OF R S.1,46,000/- REQUIRES TO BE DISALLOWED. ACCORDINGLY, WE HEREBY D IRECT THE LEARNED ASSESSING OFFICER TO DELETE THE ADDITION OF THE BALANCE AMOUNT OF RS.2,11,445/- (RS.2,84,445 RS.1 ,46,000 / 2). IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 8 TH DECEMBER, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 8 TH DECEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .