M/s.Swapna Traders, Alappuzha V. The ITO, Alappuzha

ITA 224/COCH/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96773 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 30-10-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 15-05-2014
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM S.P. NOS. 39&40/COCH/2014 (ARSG. OUT OF . I.T.A. NOS.224&225/COCH/ 2014) ASSESSMENT YEARS : 2005-06 AND 2006-07 M/S. SWAPANA TRADERS, CHUNGOM, NEAR STONE BRIDGE, ALAPUPUZHA- 688 011. [PAN: AAMFS 2934F] VS. THE INCOME TAX OFFICER, WARD-4, ALAPPUZHA. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) I.T.A. NOS.224&225/COCH/ 2014 ASSESSMENT YEARS : 2005-06 AND 2006-07 M/S. SWAPANA TRADERS, CHUNGOM, NEAR STONE BRIDGE, ALAPUPUZHA- 688 011. [PAN: AAMFS 2934F] VS. THE INCOME TAX OFFICER, WARD-4, ALAPPUZHA. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SMT. DIVYA RAVINDRAN, ADV. REVENUE BY SHRI K.P. GOPAKUMAR, SR. DR DATE OF HEARING 30/10/2015 DATE OF PRONOUNCEMENT 02/11/2015 O R D E R PER B.P.JAIN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THE STAY PETITIONS BEARING NOS. 39&40/COCH/2014 ARISING OUT OF I.T.A. NOS. 224&225/ COCH/2014 FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07. I.T.A. NOS.224&225/COCH/2014 & S.P. NOS. 39&40/COCH/2014 2 2. SINCE BOTH THE PARTIES AGREED TO ARGUE THE MAT TER TODAY, I.E., 30/10/2015, THEREFORE, THE SAID STAY PETITIONS FILE D BY THE ASSESSEE ARE REJECTED. 3. ACCORDINGLY, WE PROCEED TO HEAR THE MAIN APPE ALS FILED BY THE ASSESSEE BEARING NOS. 224&225/COCH/2014 FOR THE ASSESSMENT Y EARS 2005-06 AND 2006-07 AS UNDER: 4. THE ISSUE IN BOTH THE APPEALS IS IDENTICAL A ND THEREFORE, BOTH THE APPEALS ARE DECIDED BY THIS CONSOLIDATED ORDER. 5. THE MAIN GROUND RAISED BY THE ASSESSEE IS WITH R ESPECT TO THE DISALLOWANCE OF RS.1,00,000/- ON ESTIMATE BASIS OUT OF THE LORRY EXPENSES INCURRED BY THE ASSESSEE. SINCE THE FACTS IN BOTH THE APPEALS ARE IDENTICAL, WE SHALL TAKE UP THE APPEAL FILED BY THE ASSESSEE I N I.T.A. NO. 224/COCH/2014 FOR THE ASSESSMENT YEAR 2005-06. THE FACTS AS NARRATED BY THE ASSESSING OFFICER IN PARA 3 ARE REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER: 3. SHRI P.SANKARANARAYANAN, FCA, AUTHORISED REPRE SENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME WITH BOOKS OF A CCOUNTS AND OTHER DOCUMENTS ON WHICH THE ASSESSEE COULD RELY TO PROVE HIS ARGUMENTS. THE BOOKS OF ACCOUNTS AND DOCUMENTS WERE VERIFIED. THE ASSESSEE HAD CLAIMED EXCESSIVE EXPENSES IN RESPECT OF LORRIE S OWNED BY IT. THE AMOUNT SHOWN AGAINST THE ITEM LORRY EXPENSES IN THE PROFIT AND LOSS I.T.A. NOS.224&225/COCH/2014 & S.P. NOS. 39&40/COCH/2014 3 ACCOUNT FILED, ALONE SHOWS RS.19,84,332/-. THE VOUC HERS/BILLS PRODUCED TO PROVE THE GENUINENESS OF THE EXPENSES C LAIMED UNDER THIS HEAD WERE VERIFIED. I FIND THAT SOME OF THE VOUCHE RS/BILLS ARE SELF- MADE. THE AUTHORISED REPRESENTATIVE OF THE ASSESSE E ARGUED THAT IT WAS NOT ALWAYS POSSIBLE TO VERIFY EACH AND EVERY VO UCHERS/BILLS, CONSIDERING THAT THE BUSINESS OF THE AS IS NOT HIRI NG OF LORRIES. I CANNOT FULLY ACCEPT THE ARGUMENTS OF THE AUTHORISED REPRES ENTATIVE OF THE ASSESSEE. THEREFORE, I AM DISALLOWING AN AMOUNT OF RS.1,00,000/- ON THIS COUNT. 6. THE LD. CIT(A) CONFIRMED THE ACTION OF THE A SSESSING OFFICER. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT THE VOUCHERS FOR THE PETTY AMOUNTS ARE NOT AVAILABLE AND THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN FORCING THE ASSESSEE TO PRODUCE THE SE LF MADE VOUCHERS IN SUPPORT OF THE LORRY EXPENSE. MOREOVER, THERE WAS A CREDIT OF RS. 21,44,256/- IN THE PROFIT AND LOSS ACCOUNT UNDER TH E HEAD LORRY EXPENSE RECEIVED. THE ADDITION HAVING BEEN MADE ON FLIMSY GROUNDS, THE SAME IS, THEREFORE, PRAYED TO BE DELETED. 8. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF BOTH THE AUTHORITIES BELOW. 9. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THA T THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH WERE VERIFIED BY THE ASSESSING OFFICER. THE LORRY EXPENSES CLAIMED IN T HE PROFIT AND LOSS ACCOUNT I.T.A. NOS.224&225/COCH/2014 & S.P. NOS. 39&40/COCH/2014 4 ALONE WERE DECLARED AT RS.19,84,332/-. THE ASSESSI NG OFFICER HAD VERIFIED THE VOUCHERS/BILLS PRODUCED BY THE ASSESSEE TO PROV E THE GENUINENESS OF THE EXPENSES CLAIMED BY THE ASSESSEE. WHILE VERIFY ING THE SAID VOUCHERS/BILLS IN RESPECT OF LORRY EXPENSES, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT CERTAIN VOUCHERS/BILLS ARE SELF MADE W HICH ARE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. THERE IS NO DISPUTE TO T HE FACT THAT THE ASSESSEE HAD CREDITED RS.21,44,256/- IN THE PROFIT AND LOSS ACCOUNT UNDER THE HEAD LORRY EXPENSE BUT THE FACT REMAINS THAT CE RTAIN VOUCHERS/BILLS ARE SELF MADE WHICH ARE NOT SUPPORTED BY ANY DOCUMENTAR Y EVIDENCE TO PROVE THE GENUINENESS OF THE EXPENSES SO CLAIMED. THEREF ORE, IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE POSSIBILIT Y OF LEAKAGE CANNOT BE RULED OUT AND THEREFORE, THERE HAS TO BE CERTAIN DI SALLOWANCE ON THIS ASPECT. THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE OF RS.1,00,000/- WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A) WHICH APPEARS TO B E ON THE HIGHER SIDE. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THEREFO RE, TO MEET BOTH THE ENDS OF JUSTICE, WE MODIFY THE ORDER OF BOTH THE AU THORITIES BELOW AND RESTRICT THE DISALLOWANCE TO RS.50,000/-. ACCORDIN GLY, THE ORDER OF BOTH THE AUTHORITIES BELOW ARE MODIFIED AND THE ASSESSEE GET S A RELIEF OF RS.50,000/-. THUS, THE APPEAL OF THE ASSESSEE IN I.T.A. NO. 224/ COCH/2014 IS PARTLY ALLOWED. I.T.A. NOS.224&225/COCH/2014 & S.P. NOS. 39&40/COCH/2014 5 10. WE SHALL NOW TAKE UP THE APPEAL FILED BY TH E ASSESSEE IN I.T.A. NO. 225/COCH/2015 FOR THE ASSESSMENT YEAR 2006-07. 11. THE FACTS OF THE PRESENT CASE ARE IDENTICA L WHEREIN THE ASSESSING OFFICER HAS MADE A DISALLOWANCE OF RS.1,00,000/- ON ACCOUNT OF SELF MADE VOUCHERS IN RESPECT OF LORRY EXPENSE WHICH WAS CONF IRMED BY THE LD. CIT(A). SINCE THE FACTS IN THE PRESENT CASE ARE ID ENTICAL TO THE FACTS IN THE ASSESSEES APPEAL IN I.T.A. NO. 224/COCH/2015 FOR T HE ASSESSMENT YEAR 2005-06, THEREFORE, AS PER OUR ORDER IN I.T.A. NO.2 24/COCH/2015, WE RESTRICT THE DISALLOWANCE OF RS.1,00,000/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) IN RESPECT TO LORRY EXP ENSE TO RS.50,000/-. ACCORDINGLY, THE ORDER OF BOTH THE AUTHORITIES BELO W ARE MODIFIED AND THE ASSESSEE GETS A RELIEF OF RS.50,000/-. THUS, THE A PPEAL OF THE ASSESSEE IS I.T.A. NO. 225/COCH/2014 IS PARTLY ALLOWED. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE I N I.T.A. NOS. 224&225/COCH/2014 ARE PARTLY ALLOWED AND THE STAY P ETITIONS IN S.P. NOS. 39&40/COCH/2014 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 02-11-2015. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 2ND NOVEMBER, 2015 I.T.A. NOS.224&225/COCH/2014 & S.P. NOS. 39&40/COCH/2014 6 GJ COPY TO: 1. M/S. SWAPANA TRADERS, CHUNGOM, NEAR STONE BRIDGE , ALAPUPUZHA- 688 011. 2. THE INCOME TAX OFFICER, WARD-4, ALAPPUZHA. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-V, KOCHI . 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. D.R., I.T.A.T.,COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN