Neamatpur FL off Shop II, Burdwan V. I.T.O.,Ward-1(3), Asansol

ITA 2118/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2068 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-02-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 13-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus

Judgement Text

ITA NO. 2118/KOL/2019 ASSESSMENT YEAR: 2015-2016 NEAMATPUR FL OFF SHOP II, BURDWAN 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT I.T.A. NO. 2118/KOL/2019 ASSESSMENT YEAR: 2015-2016 NEAMATPUR FL OFF SHOP II, BURDWAN,................. ...................APPELLANT NEAMATPUR, LITHURIA ROAD, SUNDARCHAK, BURDWAN-713360 [PAN: AAIFN0208R] -VS.- INCOME TAX OFFICER,................................ ................................RESPONDENT WARD-1(3), ASANSOL APPEARANCES BY: SHRI T.P. ROY, ADVOCATE, FOR THE APPELLANT SHRI JAYANTA KHANRA, JCIT, SR. D.R., FOR THE RESPON DEN T DATE OF CONCLUDING THE HEARING : FEBRUARY 19, 2020 DATE OF PRONOUNCING THE ORDER : MAY 04, 2020 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), ASANSOL DATED 18.06.2019. 2. THE ISSUE INVOLVED IN GROUND NO. 1 OF THIS APPEA L RELATES TO THE DISALLOWANCE OF RS.1,21,071/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF REM UNERATION PAID BY THE ASSESSEE TO ITS PARTNERS. 3. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM, WHICH IS ENGAGED IN THE BUSINESS OF TRADING IN FOREIGN LIQUO R AND COUNTRY SPIRIT. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON WAS FILED BY IT ON 11.03.2016 DECLARING TOTAL INCOME OF RS.62,684/-. A S NOTICED BY THE ITA NO. 2118/KOL/2019 ASSESSMENT YEAR: 2015-2016 NEAMATPUR FL OFF SHOP II, BURDWAN 2 ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS FROM THE PERUSAL OF THE PARTNERSHIP DEED, EACH OF THE TWO PA RTNERS OF THE ASSESSEE- FIRM WAS ENTITLED FOR A REMUNERATION OF RS.10,000/- PER MONTH. HE ALSO NOTICED THAT THE ASSESSEE-FIRM, HOWEVER, HAD CLAIME D PARTNERS REMUNERATION OF RS.3,61,071/-. IN THIS REGARD, IT W AS EXPLAINED ON BEHALF OF THE ASSESSEE-FIRM THAT THE RELEVANT CLAUSE OF TH E PARTNERSHIP DEED AUTHORIZED THE PARTNERS TO REVISE THE PARTNERS REMU NERATION, AS MAY BE AGREED UPON BY AND BETWEEN THEM FROM TIME TO TIME A ND EXERCISING THE SAID AUTHORITY REMUNERATION TO PARTNERS AS FIXED AT RS.10,000/- PER MONTH PER PARTNER WAS INCREASED FOR THE YEAR UNDER CONSIDERATION. IN THE ABSENCE OF ANY REVISED PARTNERSHIP DEED FURNISHED B Y THE ASSESSEE TO SUPPORT AND SUBSTANTIATE THIS EXPLANATION, THE ASSE SSING OFFICER DID NOT ACCEPT THE SAME AND DISALLOWED THE PARTNERS REMUNER ATION TO THE EXTENT OF RS.1,21,071/- (RS.3,61,071/- MINUS RS.2,40,000/- ). 4. THE DISALLOWANCE OF RS.1,21,071/- MADE BY THE AS SESSING OFFICER ON ACCOUNT OF PARTNERS REMUNERATION WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS). DURING TH E COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS), A RESOLUTI ON DATED 01.04.2014 WAS PRODUCED BY THE ASSESSEE AUTHORISING THE INCREA SE OF PARTNERS REMUNERATION. SINCE THIS RESOLUTION DATED 01.04.201 4 WAS NOT FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE LD. CIT(APPEALS) TREATED THE SAME AS AN AFTER-THOUGHT A ND PROCEEDED TO CONFIRM THE DISALLOWANCE MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF PARTNERS REMUNERATION. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHTLY SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE RESOLUTION DATED 01.04.2014 AUTHORIZING THE INCREASE IN THE PARTNERS REMUNERATI ON WAS A RELEVANT EVIDENCE TO ADJUDICATE UPON THE ISSUE INVOLVED IN T HE ASSESSEES CASE RELATING TO THE ALLOWABILITY OF PARTNERS REMUNERATI ON AND THE LD. ITA NO. 2118/KOL/2019 ASSESSMENT YEAR: 2015-2016 NEAMATPUR FL OFF SHOP II, BURDWAN 3 CIT(APPEALS) OUGHT TO HAVE ADMITTED THE SAME. I, TH EREFORE, CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO A DMIT THE SAID EVIDENCE IN THE FORM OF RESOLUTION PASSED BY THE PARTNERS OF TH E ASSESSEE-FIRM AUTHORIZING THE INCREASE IN PARTNERS REMUNERATION A ND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR GIVING HIM AN OPPORTUNITY TO VERIFY THE SAME. THE ASSESSING OFFICER IS DIRECTED TO DECI DE THIS ISSUE AFRESH IN THE LIGHT OF THE SAID EVIDENCE AS WELL AS AFTER CON SIDERING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS .- VAISH ASSOCIATES (I.T.A. NO. 50/2014 DATED 11 TH AUGUST, 2015) AND THE DECISION OF THE HONBLE HIMACHAL PRADESH HIGH COURT IN THE CASE OF M/S. DURGA DASS DEVKI NANDAN VS.- ITO (INCOME TAX APPEAL NO. 4 OF 2005 DATED 11.03.2011). GROUND NO. 1 OF THE ASSESSEES APPEAL IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6. GROUND NO. 2 RAISED BY THE ASSESSEE IN THIS APPE AL RELATING TO THE DISALLOWANCE OF RS.28,030/- MADE BY THE ASSESSING O FFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF PROVISION FOR INCOME-TAX IS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE THE TRIBUNAL. THE SAME IS ACCORDINGLY DISMISSED AS NOT PRESSED. 7. GROUND NO. 3 INVOLVES THE ISSUE RELATING TO DISA LLOWANCE MADE BY THE ASSESSING OFFICER OUT OF SALES COMMISSION, MISC ELLANEOUS EXPENSES, PACKING CHARGES AND STAFF FOODING WELFARE, WHICH IS PARTLY SUSTAINED BY THE LD. CIT(APPEALS). 8. IN THE PROFIT & LOSS ACCOUNT FILED ALONG WITH IT S RETURN OF INCOME, THE ASSESSEE-FIRM HAD CLAIMED THE FOLLOWING EXPENSE S:- (I) SALES COMMISSION RS.1,02,540/ - (II) MISCELLANEOUS EXPENSES RS.1,02,519/ - (III) PACKING CHARGES RS.1,14,436/ - (IV) STAFF FOODING AND WELFARE RS. 98,580/ - ITA NO. 2118/KOL/2019 ASSESSMENT YEAR: 2015-2016 NEAMATPUR FL OFF SHOP II, BURDWAN 4 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER FOUND THAT THE ABOVE EXPENSES CLAIMED BY THE ASSESESE WER E SUPPORTED ONLY BY SELF-MADE DEBIT VOUCHERS PREPARED BY THE ASSESSEE. HE, THEREFORE, TREATED THE SAID EXPENSES AS NOT FULLY VERIFIABLE AND DISAL LOWED THE SAME TO THE EXTENT OF 15%. ON APPEAL, THE LD. CIT(APPEALS) REST RICTED THE DISALLOWANCE OF 15% MADE BY THE ASSESSING OFFICER OUT OF THE SAI D EXPENSES TO 5% OBSERVING THAT NO SPECIFIC INSTANCE OF ANY BOGUS CL AIM OF EXPENSES WAS SPECIFICALLY POINTED OUT BY THE ASSESSING OFFICER. 9. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT THE VARIOUS EXPENSES CLAIMED BY THE ASSESSEE WERE TREAT ED AS UN-VERIFIABLE BY THE ASSESSING OFFICER AS THE SAME WERE SUPPORTED ON LY BY SELF-MADE VOUCHERS PREPARED BY THE ASSESSEE AND THERE WAS NO THIRD-PARTY INDEPENDENT EVIDENCE. KEEPING IN VIEW THAT THERE WA S NO SPECIFIC INSTANCE POINTED OUT BY THE ASSESSING OFFICER DOUBT ING OR DISPUTING THE GENUINENESS OF ANY EXPENSES CLAIMED BY THE ASSESESE , THE LD. CIT(APPEALS) RESTRICTED THE DISALLOWANCE OF 15% MAD E BY THE ASSESSING OFFICER TO 5%. HAVING REGARD TO ALL THE FACTS AND C IRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT THE LD. CIT(APPEALS) HA S ALREADY ALLOWED A SUBSTANTIAL RELIEF TO THE ASSESSEE ON THIS ISSUE AN D SINCE THE DISALLOWANCE SUSTAINED BY HIM TO THE EXTENT OF 5% OF THE RELEVAN T EXPENSES IS QUITE FAIR AND REASONABLE, I DO NOT FIND ANY JUSTIFIABLE REASO N TO INTERFERE WITH HIS IMPUGNED ORDER ON THIS ISSUE. THE SAME IS ACCORDING LY UPHELD DISMISSING THE GROUND NO. 3 OF THE ASSESSEES APPEAL. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 04, 2020. SD/- (P.M. JAGTAP) VICE- PRESIDENT) KOLKATA, THE 4 TH DAY OF MAY, 2020 ITA NO. 2118/KOL/2019 ASSESSMENT YEAR: 2015-2016 NEAMATPUR FL OFF SHOP II, BURDWAN 5 COPIES TO : (1) NEAMATPUR FL OFF SHOP II, BURDWAN, NEAMATPUR, LITHURIA ROAD, SUNDARCHAK, BURDWAN-713360 (2) INCOME TAX OFFICER, WARD-1(3), ASANSOL (3) COMMISSIONER OF INCOME TAX (APPEALS), ASAN SOL; (4) COMMISSIONER OF INCOME TAX- , KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.