V.Amsaveni, CHENNAI V. ITO Non Corporate Ward 11(1), CHENNAI

ITA 2296/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0824 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 03-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V R VASANTHANARAYANAN
• Keywords: Gift

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , ! . , ! & BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.2296/CHNY/2018 /ASSESSMENT YEAR: 2012-13 SMT. V. AMSAVENI, NO.14, PERUMAL KOIL STREET, ROYAPETTAH, CHENNAI-600 014. [PAN: AEGPA 6753 G] VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD-11(1), CHENNAI. ( ( /APPELLANT) ( )*( /RESPONDENT) ( + / APPELLANT BY : MR.V.R.VASANTHANARAYANAN, FCA )*( + /RESPONDENT BY : MR.AR.V.SREENIVASAN, JCIT + /DATE OF HEARING : 03.06.2019 + /DATE OF PRONOUNCEMENT : 03.06.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNAI, I N ITA NO.105/CIT(A)-13/2012-13 DATED 08.05.2018 FOR THE A Y 2012-13. 2. SHRI AR.V.SREENIVASAN, JCIT, REPRESENTED ON BEHA LF OF THE REVENUE AND SHRI V.R.VASANTHANARAYANAN, FCA, REPRESENTED ON BEHALF OF THE ASSESSEE. ITA NO.2296/CHNY/2018 :- 2 -: 3. IT WAS SUBMITTED BY THE LD.AR THAT THE ASSESSEE IS AN INDIVIDUAL WHO IS THE WHOLESALE DEALER OF LUBE ITEMS. IT WAS A SU BMISSION THAT UNDER INSTRUCTIONS FROM PRINCIPAL M/S.SHELL INDIA MARKETS PVT. LTD., THE ASSESSEE HAD PROVIDED VARIOUS ITEMS ON ACCOUNT OF SALES PROM OTION. IT WAS A SUBMISSION THAT PRINCIPAL M/S.SHELL INDIA MARKETS P VT. LTD., HAD DIRECTED THE ASSESSEE TO SUPPLY VARIOUS ITEMS AS GIFTS TO TH E DISTRIBUTORS WHO HAD MET THE TARGETS. IT WAS A SUBMISSION THAT CONSEQUE NTLY, THE ASSESSEE HAD TO PURCHASE GOLD COINS, SPLIT AIR CONDITIONERS AND GOLD WINNER REFINED OIL. IT WAS A SUBMISSION THAT THE ASSESSEE HAD MADE THE PURCHASES IN CASH FOR THE SAID PURPOSE AND HAD CLAIMED REIMBURSEMENT FROM ITS PRINCIPAL M/S.SHELL INDIA MARKETS PVT. LTD. IT WAS A SUBMISS ION THAT THE AO HAD DISALLOWED THE SAME BY INVOKING THE PROVISIONS OF S EC.40A(3) OF THE ACT. IT WAS A SUBMISSION THAT THE TELEVISION SETS WERE P URCHASED FROM M/S.VASANTH & CO. BILLS WERE ALSO RAISED AND M/S.VA SANTH & CO., DID NOT ACCEPT THE CHEQUE AND DEMANDED THE CASH. SIMILARLY , IN RESPECT OF THE GOLD COINS ALSO, M/S.VIKESH JEWELLERY HAD DEMANDED CASH. IT WAS A SUBMISSION THAT IN RESPECT OF THE GOLD WINNER OIL, AS IT WAS A CONSUMABLE ITEM, THE SUPPLIER DEMANDED CASH AND CASH HAD TO BE PAID. IT WAS ONLY BECAUSE THE SUPPLIER HAD DEMANDED THE CASH, THE SAM E HAD TO BE PAID. IT WAS A SUBMISSION THAT THE EXPENDITURE BEING GENUINE , THE SAME IS LIABLE TO BE ALLOWED. 4. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AO AND THE LD.CIT(A). ITA NO.2296/CHNY/2018 :- 3 -: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 6. A PERUSAL OF THE FACTS IN THE PRESENT CASE, THE ASSESSEE HAS PURCHASED ALL THE ITEMS AS AN AGENT OF THE PRINCIPA L M/S.SHELL INDIA MARKETS PVT. LTD. THE ASSESSEE WAS COMPELLED TO PA Y CASH AS THE SUPPLIER OF THE SALES PROMOTION ITEMS HAD DEMANDED CASH. BI LLS ARE ALSO AVAILABLE AND THE BILLS ARE NOT QUESTIONED NOR SHOWN TO BE FA LSE OR FABRICATED. IT IS AN ADMITTED FACT THAT WHEN PURCHASING GOLD, CASH HA S TO BE PAID FAILING WHICH THE GOLD WOULD NOT BE HANDED OVER UNLESS THE CHEQUE IS CLEARED. FURTHER, IT IS ALSO AN ACCEPTED FACT THAT FOR PURCH ASING THE CONSUMABLES, CASH IS DEMANDED. IF CHEQUE IS TO BE ISSUED THEN TH E SUPPLY WOULD BE DONE AFTER CLEARANCE OF CHEQUE WHICH AGAIN RESULTS IN DELAY. IT IS ALSO NOTICED THAT BY PAYING CASH, THE ASSESSEE HAS OBTAI NED DISCOUNTS. UNDER THE ABOVE SAID CIRCUMSTANCES, WE ARE OF THE VIEW TH AT THE DISALLOWANCE U/S.40A(3) OF THE ACT WOULD NOT BE CALL FOR IN THE CASE OF THE ASSESSEE. CONSEQUENTLY, THE DISALLOWANCE STANDS DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 3 RD DAY OF JUNE, 2019, IN CHENNAI. SD/- SD/- ( . ) ( S. JAYARAMAN ) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER ITA NO.2296/CHNY/2018 :- 4 -: /CHENNAI, 2 /DATED: 3 RD JUNE, 2019. TLN + )34 54 /COPY TO: 1. ( /APPELLANT 4. 6 /CIT 2. )*( /RESPONDENT 5. 4 ) /DR 3. 6 ( ) /CIT(A) 6. /GF