DCIT, CIRCLE-4, JALANDHAR V. M/S LALLY MOTORS PVT. LTD , JALANDHAR

ITA 219/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5716 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-01-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 26-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALWINDER KAUR LD
• Assessee Lawyers: J P SONDHI LD
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.219(ASR)/2017 ASSESSMENT YEAR:2013- 14 THE DY. CIT, CIRCLE-4, JALANDHAR VS. M/S LALLY MOTORS PVT. LTD. G.T. ROAD, PARAGPUR JALANDHAR PAN:AAACP2760P (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. BALWINDER KAUR (LD. DR) RESPONDENT BY: SH. J.P SONDHI (LD. ADV.) DATE OF HEARING: 31.01.2018 DATE OF PRONOUNCEMENT: 16.03.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE REVENUE DEPARTMENT, ON FEELING AGGRIEVED AGAINST THE ORDER DATED 14.02.2017 PASSED BY THE LD. CIT(A)-2, JALANDHAR U/S 2 50(6) OF THE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT) F OR ASST. YEAR:2013-14. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE DEPARTME NT ARE AS UNDER: ITA NO.219/ASR/2017 (A.Y.2013-14) DCIT VS. M/S LALLY MO TORS PVT. LTD., JALANDHAR 2 1 . (A). WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE CIT(A) WAS JUSTIFIED IN RESTRICTING THE D ISALLOWANCE OF RS.25,00,000/- MADE BY THE AO OUT OF REBATE AND DISCOUNT TO RS.5,00,000/-. 1(B). WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE CIT(A) WAS JUSTIFIED IN NOT APPRECIATING THE FINDING OF AO THAT THE DISCOUNTS ALLOWED TO THE CUSTOMERS H AVE NOT BEEN MENTIONED ON SALE BILLS. 2(A). WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE OF RS.20,00,000/- MADE BY THE AO OUT OF 'INCENTIVES TO EMPLOYEES TO RS.3,00,000/-. 2(B). WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN NOT APPRECIATING THE FINDING OF AO THAT INCENTIVES INCREASED SUBSTANTI ALLY THOUGH THE SALES DECLINED. 2(C). WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN NOT ALLOWING THE AO AN OPPORTUNITY TO EXAMINE THE VARIOUS NEW DETAILS FILE D DURING APPELLATE PROCEEDINGS ON THIS ISSUE. 3(A). WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE C1T(A) WAS JUSTIFIED IN RESTRICTING THE D ISALLOWANCE OF RS.5,00,000/- MADE BY THE AO OUT OF TRAVELLING A ND VEHICLE RUNNING EXPENSES' TO RS.1,50,000/-. 3(B). WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN NOT ALLOWING THE AO AN OPPORTUNITY TO EXAMINE THE VARIOUS NEW DETAILS FILE D DURING THE APPELLATE PROCEEDINGS ON THIS ISSUE. 4. IT IS PRAYED THAT THE ORDER OF THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) BE SET ASIDE AND THAT OF THE A SSESSING OFFICER BE RESTORED. ITA NO.219/ASR/2017 (A.Y.2013-14) DCIT VS. M/S LALLY MO TORS PVT. LTD., JALANDHAR 3 3. LET US TO ADJUDICATE THE GROUND NO.1(A) AND (1)( B), SIMULTANEOUSLY BECAUSE THESE ARE CONNECTED WITH EACH OTHER AND RELATES TO THE DISALLOWANCE OF RS.25,00,000/- MADE BY THE AO OUT OF REBATE AND DISCOUNT WHICH WAS RESTRICTED BY THE LD. CIT(A) TO RS.5,00,000/-. THE LD. CIT(A) WHILE CONSIDER ING THE CHART SHOWN BY THE ASSESSEE IN SUPPORT OF ITS CONTENTION IN TERMS OF CUSTOMERS DETAILS TO WHOM THE DISCOUNT AND REBATE WA S PASSED ON ALONG WITH AMOUNT RECEIVED FROM THE PARENT CO MPANY IN ACCORDANCE WITH THEIR POLICY FOR BOOSTING SALES FROM T IME TO TIME. IT IS ADMITTED FACT THAT THE ASSESSEE HAS FILED D ETAILS OF DISCOUNT GIVEN TO EACH CUSTOMER AND DETAILS OF ACTUAL P AYMENTS MADE TO THE INSURANCE COMPANY FROM THE BANKING CHANNE L WHICH WAS CONSIDERED BY THE LD. CIT(A) AND ALSO ACKNOWLED GE OF HAVING COPIES OF INVOICES ISSUED TO THE CUSTOMERS AND RECEIVE D FROM THE PRINCIPAL COMPANY TO SUBSTANTIATE THE ASSESSEES CONTENTION ON RECORD. EVEN THE LD. CIT(A) ALSO CONSIDERE D THE ORDER ON THE SIMILAR ISSUE PASSED IN THE PRECEDING YEAR AND THEN ONLY RESTRICTED THE DISALLOWANCE OF RS.5,00,000/- OUT OF THE TOTAL DISALLOWANCE OF 25,00,000/- AS MADE BY THE A.O. THE LD. DR HAS FAILED TO PRODUCE ANY CONTRARY MATERIAL AND/ OR SUBMISSIONS IN ORDER TO CONTROVERT THE REASONING ASSIGNED BY THE LD. CIT(A) AND HENCE, WE DO NOT FIND A NY INFIRMITY, IRREGULARITY AND IMPROPRIETY IN RESTRICTIN G THE DISALLOWANCE TO 20% OF THE TOTAL DISALLOWANCE AS DETERMI NED BY THE AO. ITA NO.219/ASR/2017 (A.Y.2013-14) DCIT VS. M/S LALLY MO TORS PVT. LTD., JALANDHAR 4 4. NOW, COMING TO THE GROUND NO.2(A),(B) AND (C) WHICH RELATES TO THE DISALLOWANCE OF RS.20,00,000/- MADE BY THE AO QUA INCENTIVES TO EMPLOYEES WHICH WAS RESTRICTED TO RS.3,00,000/- BY THE LD. CIT(A). WHILE RESTRICTING THE ADDITION OF RS.20,00,000/- TO 3,00,000/- THE LD. CIT(A) HAS TAKEN INTO CONSIDERATION DETAILS OF EXPENSES FILED BY THE ASSESSEE QUA INCENTIVES GIVEN TO THE STAFF/EMPLOYEES WORKING IN DIFF ERENT SECTIONS WHICH INCLUDES SALES, INSURANCE AND WORKSHOP AS WELL AS BREAKUP OF PAYMENTS MADE TO VARIOUS EMPLOYEES ENGAGED IN THE AFORESAID DEPARTMENTS AT VARIOUS LOCATIONS SUCH AS AMRTSAR, LUDHIANA, JALANDHAR AND PATIALA. THE LD. CIT(A) HAS ALSO CONSIDERED THE DETAILS FURNISHED OF INCENTIVES GIVEN TO E ACH EMPLOYEE AT JALANDHAR ALONG WITH DETAILS OF BANK ACCO UNT NO., NAME OF THE BANK AND EMPLOYEES OF THE ASSESSEE TO THOSE SU CH PAYMENT HAS BEEN MADE. IT IS ALSO REFLECTS FROM THE RECOR D THAT AMOUNT OF RS.67,59,317/- HAS BEEN PAID BY THE CHEQUE A ND REST RS.14,28,963/- HAS BEEN SHOWN AS PAYABLE AT THE END O F THE YEAR UNDER CONSIDERATION AND ONLY AN AMOUNT OF RS.8,02 ,743/- HAS BEEN PAID IN CASH. ON THE BASIS OF AFORESAID CONSIDERA TION, THE LD. CIT(A) RESTRICTED THE ADDITION QUA INCENTIVE T O EMPLOYEES FROM RS.20,00,000/- TO RS.3,00,000/- ONLY. ON THE AFORESAID ANALYZATION, WE ARE OF THE CONSIDER ED VIEW THAT THE RESTRICTIONS OF DISALLOWANCE QUA INCENTIVE TO EMPLOYEES TO RS.3,00,000/- BY THE LD. CIT(A) IS BASED U PON THE LOGICAL REASONING AND MATERIAL AVAILABLE ON RECORD, TH EREFORE, IT IS ITA NO.219/ASR/2017 (A.Y.2013-14) DCIT VS. M/S LALLY MO TORS PVT. LTD., JALANDHAR 5 NOT JUSTIFIED TO SAY THAT THE AO WAS NOT ALLOWED AN OP PORTUNITY TO EXAMINE THE VARIOUS NEW DETAILS FILED DURING THE A PPELLATE PROCEEDINGS ON THIS ISSUE. HENCE, ON THE AFORESAID REASONING , WE ARE INCLINED TO UPHELD THE DISALLOWANCE QUA INCENTIVES T O EMPLOYEES TO RS.3,00,000/- AS RESTRICTED BY THE LD. CIT( A). 5. NOW COMING TO GROUND NO.3 (A) & (B) WHICH ARE INTERCONNECTED, THEREFORE, TAKEN INTO CONSIDERATION FOR ADJUDICATION SIMULTANEOUSLY. THE GROUND NO.3 RELATES TO THE RESTRICTION OF DISALLOWANCE OF RS.5,00,000/- MADE BY TH E AO QUA TRAVELING AND VEHICLE RUNNING EXPENSES TO RS.1,50,000/- . THE LD. CIT(A) WHILE DECIDING THIS ISSUE HAS CONSIDERED THE DETA ILS FURNISHED BY THE APPELLANT QUA VEHICLE RUNNING EXPEN SES AS WELL AS TRAVELING AND CONVEYANCE EXPENSES. THE LD. CIT(A) AL SO OBSERVED THAT OUT OF TOTAL AMOUNT OF RS.53.84 LAC QUA VEHICLE RUNNING EXPENSES, AN AMOUNT OF RS.1.66 LAC HAVE ONLY BE EN SPENT IN CASH AND WITH REGARDS TO THE TRAVELING AND CONV EYANCE NO BREAKUP OF EXPENSES INCURRED IN CASH AND BY CHEQUE HA S BEEN PROVIDED BY THE ASSESSEE, THEREFORE, CONSIDERING THE CIRCUMSTANCES IN TOTAL, RESTRICTED THE DISALLOWANCE OF RS.5,00,000/- TO RS.1,50,000/- AS JUST AND FAIR, WHICH ACCORDING TO OUR MIND DOES NOT SUFFER FROM ANY ILLEGALITY, PERV ERSITY AND IMPROPRIETY. IN OVERALL CIRCUMSTANCES, THE ORDER UNDER CHALLENGE DOES NOT SUFFER FROM ANY PERVERSITY, ILLEGALITY AND IM PROPRIETY, HENCE, THE SAME IS UPHELD. ITA NO.219/ASR/2017 (A.Y.2013-14) DCIT VS. M/S LALLY MO TORS PVT. LTD., JALANDHAR 6 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE DEPA RTMENT STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.03.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED:16.03.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) M/S LALLY MOTORS PVT. LTD., JALANDAHR (2) THE DCIT, CIRCLE-4, JALANDHAR (3) THE CIT(A)-2, JALANDHAR (4) THE CIT CONCERNED. (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER