Gaurav Industries, Ahmedabad V. The DCIT.,Circle-3, Ahmedabad

ITA 2191/AHD/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9353 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 19-11-2010
• Assessment Year: 2007-2008
• Appeal Filed On: 28-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: KEDAR LADDHA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND T.K. SHARMA, JUDICIAL MEMBER) ITA NO.2191/AHD/2010 [ASSTT. YEAR : 2007-2008] M/S.GAURAV INDUSTRIES C-1/1212-1213, PHASE-IV GIDC, NARODA, AHMEDABAD. VS. ITO, DCIT, CIR.3 AHMEDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KEDAR LADDHA REVENUE BY : SHRI SANJEEV KASHYAP O R D E R PER G.D. AGARW AL, VICE-PRESIDENT : THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), GANDHINAGAR, DATED 6.4.2010 ARISING OUT OF THE ORDER OF THE ASSE SSING OFFICER PASSED UNDER SECTION 143(3) OF THE I.T. ACT, 1961. 2. THE GROUND NO.1 OF THE ASSESSEES APPEAL READS A S UNDER: 1. LD.CIT(A) HAS ERRED IN LAW BY CONSIDERING ASSES SMENT ORDER AND MADE DISALLOWANCE OF RS.75,000/- IN RESPECT OF PAYM ENT PERTAINED TO THE PREVIOUS YEAR. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATER IAL PLACED BEFORE US. DURING THE YEAR UNDER CONSIDERATION, THE AO DISALLO WED A SUM OF RS.75,000/- BEING THE PART OF THE POLLUTION CONTROL EXPENSES PA ID TO NARODA ENVIRONMENT PROJECT LTD. (NEPL FOR SHORT) . THE AO DISALLOWE D THE SAME ON THE GROUND THAT OUT OF THE TOTAL BILL OF RS.1,40,000/- RAISED BY THE NEPL, RS.75,000/- DID NOT PERTAIN TO THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. IT WAS POINTED OUT BY THE LEARNED C OUNSEL THAT NEPL IS A COMMON EFFLUENT TREATMENT PLANT PROMOTED BY ALL THE MEMBERS IN NARODA INDUSTRIAL ESTATE WITH NO-PROFIT-NO-LOSS BASIS FOR PROVIDING FACILITY TO ITS MEMBERS. THE NEPL HAS DECIDED IN THE YEAR UNDER CONSIDERATION TO INCREASE THE CHARGE AND ACCORDINGLY THE BILL OF RS.1,40,000/ - WAS RAISED ON 1-11-2006. ITA NO.2191/AHD/2010 -2- THAT THE BILL WAS RAISED DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND THEREFORE SINCE THE LI ABILITY AROSE DURING THE YEAR UNDER CONSIDERATION, THE SAME WAS RIGHTLY CLAIMED I N THE YEAR UNDER CONSIDERATION. 4. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THE NEPL RAISED THE FOLLOWING BILL FOR RS.1,40,000/- ON 1-11-2006: NARODA ENVIRON PROJECTS LTD. COMMON EFFLUENT TREATMENT PLANT REGD. OFFICE: PLOT NO.512-515, PHASE-I, GIDC, NAROD A, AHMEDABAD 382 330 PHONE : [phone] FAX : [phone] E-MAIL: [e-mail] WEBSITE: WWW.CLEANERPRODUCTION.ORG TO GAURAV INDUSTRIES PLOT NO.C-1/1213, PHASE-IV GIDC, NARODA, AHMEDABAD 382 330 QTY.BOOKED 20000 LTR/DAY PARTICULARS AMOUNT (RS.) DIFFERENCE OF CHARGES FOR THE PERIOD FROM JULY, 2005 TO OCT., 2006 @ RS.8000/- P.M. AS BEING CHARGED FOR REGISTRATION @ 7000 LTRS./DAY INSTEAD OF 20,000 LTRS. 1,28,000 ADD: DIFFERENCE OF PROPORTIONATE ADDITION CHARGES FOR THE MONTH OF JUNE, 2005 = RS.3000 + MAY, 2O006 RS.6000 + OCT., 2006 = RS.3000/- PREVIOUS OUTSTANDING : RS.13000.00 12,000 TOTAL 1,40,000.00 RS.ONE LAC FORTY THOUSAND ONLY. ITA NO.2191/AHD/2010 -3- FROM THE ABOVE, IT IS EVIDENT THAT THE NEPL RAISE D BILL FOR THE DIFFERENCE OF CHARGES ON 1-11-2006. THUS, THE LIABILITY OF ADDIT IONAL CHARGES AROSE DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDE R APPEAL. THEREFORE, THE SAME IS ALLOWED FOR THE YEAR UNDER CONSIDERATION. WE, THEREFORE, DELETE THE DISALLOWANCE OF RS.75,000/-. THE GROUND NO.1 OF TH E ASSESSEES APPEAL IS ALLOWED. 6. GROUND NO.2 OF THE ASSESSEES APPEAL READS AS UN DER: 2. THE LD.CIT(A) HAS ERRED IN LAW BY CONSIDERING T HE ASSESSMENT ORDER AND MADE DISALLOWANCE OF RS.40,000/- IN RESPE CT OF TRAVELING AND TELEPHONE AND MOBILE EXPENSES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THE AO HAS DISALLOWED A SUM OF RS .15,000/- OUT OF TELEPHONE AND MOBILE EXPENSES AND A SUM OF RS.25,000/- OUT OF THE TRAVELLNG EXPENSES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE C LAIMED TELEPHONE AND MOBILE EXPENSES OF RS.1,40,899/-. THE PERSONAL USE R OF THE TELEPHONE BY THE PARTNERS OF THE ASSESSEE FIRM CANNOT BE RULED OUT. THE DISALLOWANCE MADE BY THE AO IS APPROXIMATELY 10% OF THE TOTAL EXPENSES C LAIMED. WE THEREFORE DID NOT FIND ANY JUSTIFICATION TO INTERFERE IN THIS REG ARD. THE SAME IS UPHELD. 8. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E HAS ALSO CLAIMED TRAVELLING EXPENSES AMOUNTING TO RS.2,37,701/-. AF TER VERIFICATION OF THE DETAILS OF THE TRVELLING EXPENSES, THE AO NOTICED T HAT THE POSSIBILITY OF PERSONAL EXPENSES DEBITED UNDER THE HEAD TRAVELLING EXPENSES CANNOT BE RULED OUT. THE DETAILS OF THE TRAVELLING EXPENSES HAVE NOT BEEN FU RNISHED BEFORE US. THE AD HOC DISALLOWANCE MADE BY THE ASSESSEE IS APPROXIMAT ELY 10% OF THE TOTAL EXPENDITURE CLAIMED. CONSIDERING THE FACTS OF THE CASE AND IN THE ABSENCE OF DETAILS OF TRAVELLING EXPENSES, FURNISHED BEFORE US , WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LO WER AUTHORITIES IN THIS REGARD. ITA NO.2191/AHD/2010 -4- ACCORDINGLY, THE DISALLOWANCE OUT OF THE TRAVELLING EXPENSES IS SUSTAINED. THUS GROUND NO.2 OF THE ASSESEES APPEAL IS REJECTED. 9. IN RESULT, THE ASSESSEESS APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 30 TH NOVEMBER, 2010. SD/- SD/- (T.K. SHARMA) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 30-11-2010 COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD