M/s Narinder Parkash & Company, Nabha V. ITO, Nabha

ITA 216/CHANDI/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5760 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 02-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK GOEL

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “बी” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH ी तर वंदर संह कप ू र, लेखा सद$य एवं ी स ु धांश ु ीवा$तव, या(यक सद$य BEFORE: SHRI. TARVINDER SINGH KAPOOR, AM & SHRI. SUDHANSHU SRIVASTAVA, JM ITA NO. 216/Chd/2020 Assessment Year : 2014-15 M/s Narinder Parkash & Company Railway Road, Nabha The ITO Nabha PAN NO: AAGFN2212H Appellant Respondent ! " Assessee by : Shri Ashok Goel, CA # ! " Revenue by : Shri Akashdeep, JCIT, Sr. DR $ % ! & Date of Hearing : 19/09/2022 '()* ! & Date of Pronouncement : 19/09/2022 आदेश/Order PER TARVINDER SINGH KAPOOR, A.M.: This is an appeal filed by the Assessee against the order of the Ld. CIT(A), Patiala dt. 30/01/2020. 2. The Assessee has taken following grounds of appeal: 1. That order passed u/s 250(6) of the Income Tax Act, 1961 by the Ld. Commissioner of Income Tax (Appeals), Patiala is against law and facts on the file in as much as he was not justified to arbitrarily uphold the addition of Rs. 9,21,081.00 out of freight expenses, wages, job work charges and power and fuel. 2. That the Ld. CIT Appeal, Patiala was further not justified to arbitrarily uphold the addition of Rs. 50,000.00 out of freight outward, other general admin. Expenses and travelling expenses. 3. That the appellant craves leave to add delete or modify any ground of appeal before the same is heard or disposes off. 3. At the outset the Ld. AR submitted that the Assessing Officer had made disallowance equivalent to 10% out of the expenses debited in the Manufacturing and P&L Account which the Ld. CIT(A) had reduced by 50% and still has upheld the addition equivalent to 50% of the addition made by the AO. It was submitted that the Ld. CIT(A) has upheld the part addition by holding that the details filed by the assessee did not include the details of fright inward and power & fuel expenses. 2 3.1 The Ld. AR in this respect invited our attention to the Paper Book page nos. 39 to 43 where the details of expenses relating to power & fuel were placed. Similarly, the Ld. AR further took us to Paper Book page nos. 44 to 54 where the details of freight expenses were placed. The Ld. AR submitted that in view of these evidences filed before the authorities below the findings of the Ld. CIT(A) are contrary to the facts and he has just upheld the part disallowance on assumptions and conjectures only and therefore it was prayed that the part disallowance sustained by the Ld. CIT(A) be deleted. 4. Arguing on the other ground of sustenance of addition amounting to Rs. 50,000/- the Ld. AR submitted that the Assessing Officer had made a total disallowance equivalent to 20% of the freight onward and travelling expenses and the Ld. CIT(A)was pleased to delete the addition but while deleting the addition he upheld an amount of Rs. 50,000/- without any basis. It was submitted that before the Ld. CIT(A) the complete details of expenses was furnished on which the Ld. CIT(A) has obtained the Remand Report also and therefore sustenance of part expense by the Ld. CIT(A) is not justified. 5. The Ld. DR on the other hand submitted that the arguments of the Ld. AR that the details of power & fuel expenses and freight inward expenses were filed before the authorities below is contrary to the findings of the Ld. CIT(A) therefore opportunity should be granted to the verify the same from the records. 6. We have heard the rival submissions and gone through the material placed on the record. We find that the Assessing Officer had made a total disallowance of Rs. 18,42,162/- on account of disallowance of freight, wages, job work charges, power & fuel etc. such disallowance was made equivalent to 10% of such manufacturing expenses. The Ld. CIT(A) has however restricted the disallowance to Rs. 9,21,081/- by holding that assessee did not file details regarding freight inward and power & fuel expenses. However, during the arguments before us the Ld. AR had demonstrated that such details were duly filed before the authorities below and copy of said details were said to be placed in Paper Book pages 39 to 54. The argument of the Ld. DR that the evidences shown by the Ld. AR are contrary to the facts recorded Ld. CIT(A) and therefore opportunity should be granted to verify the same is not acceptable in view of the fact that the case related to the A.Y. 2014-15 and the paper book has been filed by 3 the assessee on 12/01/2021 and the Department did not bother to verify the same despite more than one and a half year has passed. Therefore the argument of the Department is rejected and from the records we find that the assessee did file the required details therefore the part disallowance sustained by the Ld. CIT(A) by holding incorrect findings is not sustainable and in view of the above Ground no. 1 is allowed. 7. Now coming to Ground No. 2, we find that the sustenance of disallowance equivalent to Rs. 50,000/- out of freight outward, general administration and travelling expenses is also arbitrary and is not based upon any facts. The Ld. CIT(A) though had allowed substantial relief to the assessee but the sustenance of disallowance is not based upon any facts therefore the same is also deleted. 8. In the nutshell, the appeal filed by the Assessee is allowed. (Order pronounced in the open Court on 19/09/2022 ) Sd/- Sd/- स ु धांश ु ीवा$तव तर वंदर संह कप ू र, (SUDHANSHU SRIVASTAVA) (TARVINDER SINGH KAPOOR) या(यक सद$य/ JUDICIAL MEMBER लेखा सद$य / ACCOUNTANT MEMBER AG Date: 19/09/2022 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. $ / 0 1 The CIT(A) 5. - 2 ग 4 5 & 4 5 678 ग9 DR, ITAT, CHANDIGARH 6. ग 8 : % Guard File ( + $ By order, ; # Assistant Registrar