The ITO, Ward-2(1), Ahmedabad V. Shri Kaivan Arvindbhai Shah, Ahmedabad

ITA 203/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72922 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 25-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BENCH, AHMEDABAD .., ! ! ! ! ' #$, BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ I.T.A. NO.203/AHD/2011 ( & '& & '& & '& & '& / / / / ASSESSMENT YEAR : 2006-07) THE ITO WARD-2(1) AHMEDABAD / VS. SHRI KAIVAN ARVINDBHAI SHAH B/402, SHARAN RESIDENCY-1 NR.PUSHPADEEP FLAT DEV HOSPITAL LANE VASNA BUS STAND ROAD VASNA, AHMEDABAD-380 007 ( !./)* !./ PAN/GIR NO. : AHZPS 0892 E ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) AND CO NO.36/AHD/2012 AY 2006-07 (IN ITA NO.203/AHD/2011 AY 2006-07) SHRI KAIVAN ARVINDBHAI SHAH VS. THE ITO AHMEDABAD WARD-2 (1), AHMEDABAD (CROSS OBJECTOR) .. (RESPOND ENT) REVENUE BY : SHRI O.P. BATHEJA, SR.D.R. ASSESSEE BY : SHRI TUSHAR HEMANI ' . / $0 / / / / DATE OF HEARING : 27/1/2014 12' / $0 / DATE OF PRONOUNCEMENT : 30/01/2014 3 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THE REVENUE AND THE ASSESSEE HAVE CHALLENGED THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XIV, AHMEDAB AD (CIT(A) ITA NO.203/AHD/2011 (BY REVEN UE) & CO NO.36/AHD/2012 (BY ASSESSEE) ITO VS. SHRI KAIVAN ARVINDBHAI SHAH ASST.YEAR 2006-07 - 2 - FOR SHORT) DATED 22/10/2010 PERTAINING TO ASSESSME NT YEAR (AY) 2006- 07 BY WAY OF APPEAL AND CROSS-OBJECTION RESPECTIVEL Y. 2. AT THE OUTSET, LD.COUNSEL FOR THE ASSESSEE SUBMI TTED THAT HE DOES NOT WISH TO PRESS THE CROSS-OBJECTION LOOKING TO THE SMALLNESS OF AMOUNT INVOLVED IN THE ADDITIONS. THE SR.DR DID NOT OBJEC T THE SAME, THEREFORE THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMIS SED AS NOT PRESSED. 3. THE REVENUE IN ITA NO.203/AHD/2011 HAS RAISED FO LLOWING GROUNDS OF APPEAL:- 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OUT OF STAMP EXPENSES OF RS.3,36,130/- MADE U/S.37 OF THE IT ACT. 2. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OUT OF COMMISSION EXPENSES OF RS.8,64, 657/- MADE U/S.37 OF THE I.T.ACT. 3.1. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 26/12/2008, THEREBY THE ASSESSING OFFICER(AO) MADE DISALLOWANCE(S) ON ACCOUNT OF STAMP EXPENSES OF RS. 3,36,130/-, COMMISSION EXPENSES OF RS.8,64,657/-, TELEPHONE EXP ENSES OF RS.48,038/- AND ON ACCOUNT OF HOUSE HOLD WITHDRAWA LS OF RS.1,29,000/-. AGAINST THIS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS AND EVIDENCES PLA CED BEFORE HIM, PARTLY ALLOWED THE APPEAL, THEREBY LD.CIT(A) DELETE D THE DISALLOWANCES MADE ON ACCOUNT OF STAMP DUTY EXPENSES, COMMISSION EXPENSES AND ITA NO.203/AHD/2011 (BY REVEN UE) & CO NO.36/AHD/2012 (BY ASSESSEE) ITO VS. SHRI KAIVAN ARVINDBHAI SHAH ASST.YEAR 2006-07 - 3 - REDUCED THE DISALLOWANCE OF TELEPHONE EXPENSES AND THE ADDITION MADE ON ACCOUNT OF HOUSE-HOLD EXPENSES. BOTH THE REVENU E AND THE ASSESSEE HAVE CHALLENGED THE ORDER BY FILING THE APPEAL (BY REVENUE) AND CROSS- OBJECTION (BY ASSESSEE). 4. THE FIRST GROUND IS AGAINST THE DELETION OF DISA LLOWANCE OUT OF STAMP EXPENSES AMOUNTING TO RS.3,36,130/-. THE LD. SR.DR HAS STRONGLY SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT TH E ASSESSEE COULD NOT PROVE THAT THESE EXPENSES WERE NOT NEVER MADE BY HI M BUT NOT THE BENEFICIARY. 4.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT ALL DETAILS WERE FURNISHED. HE SUBMITTED THAT THE ASSE SSEE IS IN THE BUSINESS OF ARRANGING LOANS FROM ICICI BANK. HE HAS BEEN AP POINTED AS SERVICE PROVIDER TO PROCURE LOAN AGAINST SECURITY PRODUCTS AND IN TURN EARNED COMMISSION INCOME ON SLAB BASIS. HE SUBMITTED TH AT NOT EVEN A SINGLE PAISA HAS BEEN TAKEN FROM THE BENEFICIARY OF THE LO AN. FURTHER SUBMITTED THAT BY INCURRING THESE EXPENDITURE, ASSESSEES BUS INESS HAS BEEN INCREASED. HE SUBMITTED THAT ICICI BANK HAS GIVEN A CERTIFICATE THAT THESE EXPENDITURE WERE NOT REIMBURSED BY THE BANK. HE HAS DRAWN OUR ATTENTION TO CERTIFICATE ISSUED BY THE ICICI BANK W HICH IS ENCLOSED AT PAGE NO.47 OF THE PAPER-BOOK. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT THAT THESE ITA NO.203/AHD/2011 (BY REVEN UE) & CO NO.36/AHD/2012 (BY ASSESSEE) ITO VS. SHRI KAIVAN ARVINDBHAI SHAH ASST.YEAR 2006-07 - 4 - EXPENDITURE WERE INCURRED ON ACCOUNT OF BUSINESS EX PEDIENCY OF THE ASSESSEE. THIS FINDING OF THE LD.CIT(A) HAS NOT BE EN CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, THE ORDER OF THE LD.CIT(A) ON THIS ISSUE IS HEREBY UPHE LD. HENCE, THIS GROUND OF REVENUES APPEAL IS REJECTED. 6. THE SECOND GROUND OF THE REVENUES APPEAL IS AGA INST THE DELETION OF DISALLOWANCE OUT OF COMMISSION EXPENSES OF RS.8, 64,657/-. THE SR.DR SUPPORTED THE ORDER OF THE LD.CIT(A) AND SUBM ITTED THAT THE AO HAS GIVEN A CATEGORICAL FINDING IN PARA-6.2 IN RESP ONSE TO SUMMONS U/S.131 OF THE ACT STATING THAT NO ONE ATTENDED THE HEARING, HOWEVER, CERTAIN REPLIES WERE RECEIVED FROM THE PARTIES BY P OST. HE SUBMITTED THAT IT WAS UPON THE ASSESSEE TO PROVE THAT THESE EXPEND ITURE WERE, IN FACT, INCURRED FOR THE BUSINESS PURPOSES. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF GUJARAT INSECTICIDES LTD. VS. ACIT (2012) 19 TAXMANN.COM 70 (GUJ.). 6.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE AO FAILED TO APPRECIATE THAT THE PERSONS TO WHOM THE C OMMISSIONS HAVE BEEN PAID, HAVE PURSUANT TO SUMMONS ISSUED BY THE AO, CO NFIRMED THE RECEIPT OF THE SAME AND INCLUDED IT IN THEIR INCOME WHILE F ILING RETURN OF INCOME. HE SUBMITTED THAT ALL THE DETAILS WERE FILED BEFORE THE AO. HE HAS GIVEN PARTY-WISE DETAILS IN HIS WRITTEN SUBMISSIONS. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.203/AHD/2011 (BY REVEN UE) & CO NO.36/AHD/2012 (BY ASSESSEE) ITO VS. SHRI KAIVAN ARVINDBHAI SHAH ASST.YEAR 2006-07 - 5 - WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT THAT THE ASSESSEE HAD FURNISHED ALL THE RELEVANT DETAILS TO THE AO. HE HAS OBSERVED THAT IF THE AO PROVES THAT THE COMMISSION PAID FOR NON-BUSI NESS CONSIDERATION, THEN ONLY THE DISALLOWANCE COULD HAVE BEEN UNDER TH E HEAD. IT IS OBSERVED THAT THE LD.CIT(A) THAT NO SUCH ATTEMPT HA S BEEN MADE BY THE AO. WE FIND THAT THE DECISION OF HONBLE GUJARAT H IGH COURT RELIED UPON BY THE LD.SR.DR RENDERED IN THE CASE OF GUJARA T INSECTICIDES LTD.(SUPRA) THE FACTS ARE DISTINGUISHABLE. IN TH AT CASE, BOTH THE AUTHORITIES BELOW HAVE GIVEN A CONCURRENT FINDINGS THAT NO EVIDENCE WAS PLACED ON RECORD IN RESPECT OF THE PAYMENT OF EXPEN DITURE. BUT IN THE CASE IN HAND, THE ASSESSEE HAS PLACED ON RECORD THE PROOF OF PAYMENT OF EXPENDITURE, THEREFORE IN OUR CONSIDERED VIEW, THE FACTS OF THE PRESENT CASE ARE DISTINGUISHABLE. WE FIND THAT THE ASSESS EE FURNISHED THE RELEVANT DETAILS IN SUPPORT OF HIS CLAIM. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), THE SAME IS HEREBY CONF IRMED. THUS, THIS GROUND OF THE REVENUES APPEAL IS HEREBY REJECTED. 8. IN THE COMBINED RESULT, THE APPEAL OF THE REVENU E AND CROSS- OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30/ 01 /2014 60.., .../ T.C. NAIR, SR. PS ITA NO.203/AHD/2011 (BY REVEN UE) & CO NO.36/AHD/2012 (BY ASSESSEE) ITO VS. SHRI KAIVAN ARVINDBHAI SHAH ASST.YEAR 2006-07 - 6 - 3 / ,$7 87'$ 3 / ,$7 87'$ 3 / ,$7 87'$ 3 / ,$7 87'$/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. !! $ '9 / CONCERNED CIT 4. '9() / THE CIT(A)-XIV, AHMEDABAD 5. 7 #: ,$ , , / DR, ITAT, AHMEDABAD 6. :;& <. / GUARD FILE. 3' 3' 3' 3' / BY ORDER, -7$ ,$ //TRUE COPY// = == =/ // / !) !) !) !) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 28.1.14 (DICTATION-PAD 12-P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.1.14 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.30.1.14 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.1.14 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER