M/s Associated Printeres & Publisheres Pvt. Ltd., Indore V. The ACIT 3(1), Indore

ITA 209/IND/2012

• Counselvise Citation: 20922714 RSA 2012
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 19-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: KAMLESH JAIN
• Keywords: Depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 209/IND/2012 A.Y.2003-04 M/S ASSOCIATED PRINTERS AND PUBLISHERS NEW DEWAS ROAD INDORE PAN AAECA 2633E :: APPELLANT VS ASSTT. COMMISSIONER OF INCOME TAX 3(1), INDORE :: RESPONDENT APPELLANT BY SHRI KAMLESH JAIN RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 08.10 .2012 DATE OF PRONOUNCEMENT 0 8 . 10 .2012 O R D E R PER SHRI R.C.SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 13.1.2012 FOR THE ASSESSMENT Y EAR 2003-04. 2 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSE E :- 1. FOR THAT THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACTS OF THE CASE, MATERIAL ON RECORD, PAST HISTORY AND NATURE OF BUSINESS OF THE APPELLANT AND HAS THUS ERRED IN CONFIRMING CERTAIN ADDITIONS MADE BY THE LEARNED A.O. 2. FOR THAT THE LEARNED CIT(A) HAS ERRED IN CONFIR MING THE GROSS PROFIT ADDITION OF RS. 2,95,537/- MADE TO THE TRADING RESULTS AS PER AUDITING BOOKS OF ACCOUNTS WHICH DESERVE TO BE DELETED AFTER PROPERLY APPRECIATING THE NATURE OF BUSINESS OF THE APPELLANT 3. FOR THAT THE LEARNED CIT(A) HAS ERRED IN NOT CONSIDERING THE CLAIM OF ALLOWABLE DEPRECIATION AS PER THE AUDITED ACCOUNTS. 4. FOR THAT THE LEARNED CIT(A) HAS ERRED IN CONFIR MING IN AN ADHOC MANNER AND WITHOUT PROPER 3 CONSIDERATION THE DISALLOWANCE OF FOLLOWING EXPENSES CLAIMED :- (A) RS.12,000/- OUT OF COMPUTER SERVICE EXPENSES (B) RS.25,000/- OUT OF CLAIM OF SALES PROMOTION EXPENSES (C) RS.8,000/- OUT OF BUILDING REPAIR EXPENSES (D) RS.20,000/- OUT OF MACHINERY REPAIR EXPENSES. 5. FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED IN NOT CONSIDERING THE CLAIM OF SET OFF OF BROUGHT FORWARD LOSSES FROM EARLIER YEARS WHICH WERE ON RECORD AS PER THE AUDITED BALANCE SHEET & THE PREVIOUS YEARS FOLDERS WITH THE DEPARTMENT 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN PUBLISHING DAILY NEWSPAPER. DURING THE YEAR, UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN SALES OF RS. 67.87 LACS AND ADVERTISEMENT REVENUE OF RS. 13.01 LACS WHICH G AVE GP 4 RATE OF 6.01% AND NP RATE OF 1.04%. THE AO OBSERVE D THAT THE ASSESSEE HAD NOT SHOWN CORRECTLY THE VALUEWISE CONS UMPTION OF PRINTING MATERIAL, QUANTITATIVE CONSUMPTION OF P RINTING, CONSUMPTION OF INK, ETC. ACCORDINGLY, HE DID NOT A CCEPT THE GP RATE SHOWN BY THE ASSESSEE AND AFTER APPLYING GP RATE OF 11.13% MADE A TRADING ADDITION OF RS. 2,95,5376/-. 4. THE CONTENTION OF THE LEARNED COUNSEL FOR THE AS SESSEE WAS THAT THE ASSESSEE WAS ENGAGED IN PUBLISHING DAI LY NEWSPAPER AND IS SUBJECT TO ABC AUDIT AND IN CASE O F PAPER SALES, PRICE IS ALWAYS FIXED. ACCORDINGLY, THERE W AS NO JUSTIFICATION FOR MAKING ANY ADDITION. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FIN D FROM RECORD THAT EVEN THOUGH THERE IS FALL IN THE GP RAT E SHOWN BY THE ASSESSEE FROM 13.31% TO 6.18% AS COMPARED TO TH E IMMEDIATELY PRECEDING YEAR BUT THERE WAS INCREASE I N NP RATE FROM 0.76% TO 1.04% AS COMPARED TO THE IMMEDIATELY PRECEDING YEAR. KEEPING IN VIEW THE TOTALITY OF FA CTS AND 5 CIRCUMSTANCES OF THE CASE, VIS-A-VIS THE NATURE OF THE ASSESSEES BUSINESS AND THE DEFECTS POINTED OUT BY THE AO, WE RESTRICT THE GP RATE OF 8% IN PLACE OF GP RATE OF 6 .81% SHOWN BY THE ASSESSEE WHICH HAS BEEN ASSESSED BY THE AO A T 11.13%. ACCORDINGLY, THE AO IS DIRECTED TO REWORK OUT THE T RADING ADDITION BY APPLYING GP RATE OF 8%. 6. THE AO HAS MADE ADDITION OF RS. 12,000/- OUT OF COMPUTER SERVICING CHARGES OF RS. 1,36,218/- CLAIME D BY THE ASSESSEE. THE CONTENTION OF THE AO WAS THAT EXPENS ES WERE SUPPORTED ONLY BY INTERNAL VOUCHERS AND THAT THERE WAS INCREASE IN EXPENSES AS COMPARED TO EARLIER YEAR. KEEPING IN VIEW THE VOLUME OF BUSINESS OF THE ASSESSEE, THE CO MPUTER SERVICING CHARGES OF RS. 1,36,218/- INCURRED BY THE ASSESSEE APPEAR TO BE REASONABLE AND SINCE THE EXPENSES WERE FOR SERVICING OF COMPUTERS, ONLY INTERNAL VOUCHERS WERE PREPARED. THE GENUINENESS OF THE EXPENDITURE AND ACTUAL INCUR RING OF THE SAME FOR THE BUSINESS PURPOSES WAS NOT DOUBTED. WE ACCORDINGLY DO NOT FIND ANY JUSTIFICATION IN ESTIMA TING THE 6 DISALLOWANCE AT RS.12,000/- BY THE AO. THE AO IS D IRECTED TO DELETE THE SAME. 7. SIMILAR DISALLOWANCE WAS MADE IN RESPECT OF SALE S PROMOTION EXPENSES INCURRED AT RS. 96,000/-. THE A O DISALLOWED RS. 25,000/- ON THE PLEA THAT THERE WERE SELF DRAWN INTERNAL VOUCHERS. NO VOUCHER WAS DOUBTED BY THE A O AS BOGUS, NON-GENUINE OR EXCESSIVE. KEEPING IN VIEW T HE TOTALITY OF FACTS, WE DIRECT THE AO TO RESTRICT THE DISALLOW ANCE TO THE EXTENT OF 10% OF EXPENDITURE INCURRED. 8. THE EXPENDITURE INCURRED ON BUILDING REPAIR AND MACHINERY REPAIR ARE FOUND TO BE GENUINE AND INCURR ED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. AD H OC DISALLOWANCE MADE BY THE AO IS UNWARRANTED. ACCORD INGLY, THE AO IS DIRECTED TO DELETE THE DISALLOWANCES OF RS. 8 ,000/- AND RS. 20,000/- ON ACCOUNT OF BUILDING REPAIR AND MACH INERY REPAIR, RESPECTIVELY. 9. IN GROUND NO. 5 THE ASSESSEE IS AGGRIEVED FOR NO T ALLOWING SETTING OFF OF BROUGHT FORWARD LOSSESS FROM EARLIER YEARS. THE 7 CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS THAT BROUGUT FORWARD LOSSES WERE AS PER THE RECORD AND A UDITED BALANCE SHEET OF PREVIOUS YEAR LYING IN THE FOLDER OF THE DEPARTMENT. IN THE INTEREST OF JUSTICE AND FAIR PL AY, WE DIRECT THE AO TO REVERIFY THE AUDITED BALANCE SHEET OF TH E EARLIER YEAR AS AVAILABLE IN THE FILE OF THE DEPARTMENT SO AS TO ASCERTAIN THE CORRECTNESS OF SUCH CLAIM. THE AO IS DIRECTED TO DECIDE THIS ISSUE AFRESH AFTER GIVING DUE OPPORTUNI TY TO THE ASSESSEE. ORDER PRONOUNCED IN OPEN COURT ON 8 TH OCTOBER, 2012 SD SD (JOGINDER SINGH) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER OCTOBER 8 TH , 2012 COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR DN/-88