Anil Kumar Paik, Kolkata V. J.C.I.T (OSD) under CIT - III, Kol, Kolkata

ITA 2297/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1637 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 26-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MIHIR BANDYOPADHYAY
• Keywords: Business income; Non-deduction of tax; Corroborative evidences
• Section: 44AD; 143(3); 194C

Judgement Text

I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 13 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 2297/KOL/ 2013 ASSESSMENT YEAR: 2009-2010 ANIL KUMAR PAIK,................................... .........................................APPELLANT FLAT 2ABC, 2B, S.N. ROY ROAD, BEHALA, KOLKATA-700 034 [PAN: AFLPP 6567 R] -VS.- JOINT COMMISSIONER OF INCOME TAX (OSD),............ .......................RESPONDENT C.I.T.-III, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI MIHIR BANDYOPADHYAY, A.R., FOR THE ASSESSEE SHRI SAURABH KUMAR, ADDITIONAL CIT, D.R., FOR THE D EPARTMENT DATE OF CONCLUDING THE HEARING : MAY 17, 2017 DATE OF PRONOUNCING THE ORDER : JUNE 21, 2017 O R D E R PER SHRI P.M. JAGTAP, A.M. .: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-VIII, KOLKATA DATED 23.01.2013. 2. THE RELEVANT FACTS OF THE CASE GIVING RISE TO TH IS APPEAL ARE AS FOLLOWS. THE ASSESSEE IS AN INDIVIDUAL, WHO IS ENGA GED IN THE BUSINESS OF CONSTRUCTION, TRADING IN COUNTRY SPIRIT AND RUNNING A MEDICAL SHOP. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED BY HIM DECLARING TOTAL INCOME OF RS.21,00,893/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY BY THE ASSESSING OFFICER AND IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 08.12.2011, THE TOTAL I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 13 INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESS ING OFFICER AT RS.55,23,192/- AFTER MAKING VARIOUS ADDITIONS/DISAL LOWANCES. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEAL S) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) CONFIRMED SOME ADDITIONS/DISALLOWANCES MADE BY THE ASSESSING OFFIC ER WHILE DELETING OTHER ADDITIONS/DISALLOWANCES OR SUSTAINING THE SAM E PARTLY. THE LD. CIT(APPEALS) THUS ALLOWED THE APPEAL OF THE ASSESSE E PARTLY VIDE HIS APPELLATE ORDER DATED 23.01.2013, WHICH IS IMPUGNED BY THE ASSESSEE IN THE PRESENT APPEAL FILED BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS:- 1. THE LD CIT(A) ERRED IN CONFIRMING ADDITION AGAI NST INTEREST TO THE EXTENT OF RS. 2,34,084/-. 2. THE LD CIT CA) ERRED IN TREATING TOTAL RECEIPTS OF RS. 3,33,468/- AGAINST SERVICE CHARGES, LICENSE FEES AN D MISC. RECEIPTS REALISED FROM TATA TELESERVICES LTD AS NOT INCLUDIBLE IN THE TURNOVER WHILE COMPUTING PROFITS U/S 44AD IN THE APPELLANTS BUSINESS RELATING TO CONSTRU CTION AND SALE OF BUILDING FLAT. 3. THE LD. CIT(A) ERRED IN RESTRICTING THE DISALLOW ANCE OF RS.1,50,097/- TO RS.1,00,000/- IN CONNECTION WITH I NTERIOR DECORATION OF THE APPELLANT'S COUNTRY SPIRIT SHOP. 4. THE LEARNED CIT(A) ERRED IN RESTRICTING THE DISALLOWANCE OF RS.1,90,531/- TO 50% OF THE SAME IN RESPECT OF REPAIRS AND MAINTENANCE EXPENSES OF THE OLD COUNTRY SPIRIT SHOP OF THE APPELLANT. 5. THE LEARNED CIT CA) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,41,953/- SPENT BY THE APPELLAN T FOR MUSIC ETC IN THE LIQUOR SHOP OF THE APPELLANT DURIN G FESTIVE OCCASION. 6. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE AGAINST EXPENSES ON SNACKS, PEANUTS, FRIED GRAMS ET C PROVIDED TO CUSTOMERS TO THE EXTENT OF 50% OF THE C LAIM. 7. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE AGAINST EXPENSES ON TEA AND TIFFIN PROVIDED TO STAF F TO THE EXTENT OF 50% OF THE CLAIM. I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 13 8. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE AGAINST CONVEYANCE EXPENSES TO THE EXTENT OF 25% OF THE CLAIM. 9. THE LD CIT(A) ERRED IN CONFIRMING THE DISALLOWAN CE AGAINST EXPENSES ON CARRIAGE INWARD TO THE EXTENT O F 50% OF THE CLAIM. 10. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE MADE @ 20% AGAINST TELEPHONE CHARGES. 11. THE LD. CIT (A) ERRED IN CONFIRMING THE ADDITIO N OF THE ENTIRE TRANSPORT CHARGES DIRECTLY PAID TO TRUCK OWN ERS FOR ALLEGED ABSENCE OF T.D.S. 4. AS NOTED AT THE OUTSET, THERE IS A DELAY OF 117 DAYS ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL BEFORE THE TRIBU NAL. IN THIS REGARD, AN APPLICATION IS FILED BY THE ASSESSEE SEEKING CONDON ATION OF THE SAID DELAY AND KEEPING IN VIEW THE REASONS GIVEN THEREIN, WHIC H ARE DULY SUPPORTED BY AN AFFIDAVIT FILED BY THE ASSESSEE AS WELL AS ME DICAL CERTIFICATE ISSUED BY A DOCTOR, WE ARE SATISFIED THAT THERE WAS A SUFF ICIENT CAUSE FOR THE DELAY OF 117 DAYS ON THE PART OF THE ASSESSEE IN FI LING HIS APPEAL BEFORE THE TRIBUNAL. EVEN THE LD. D.R. HAS NOT RAISED ANY MATERIAL OBJECTION IN THIS REGARD. WE, THEREFORE, CONDONE THE SAID DELAY AND PROCEED TO DISPOSE OF THE APPEAL OF THE ASSESSEE ON MERIT. 5. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE HAS FILED A WRITTEN SUBMISSION IN SUPPORT OF THE ASSESS EES CASE ON THE VARIOUS ISSUES RAISED IN THIS APPEAL. THE LD. D.R., ON THE OTHER HAND, HAS RELIED ON THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) IN SUPPO RT OF THE REVENUES CASE BY STATING THAT THE SAME IS WELL REASONED AND WELL DISCUSSED ON ALL THE ISSUES RAISED BY THE ASSESSEE IN THIS APPEAL. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD INCLUDING THE ORDERS OF AUTHORITIES BELOW AS WELL AS THE WRITTEN SUBMISSION FILED BY TH E LD. COUNSEL FOR THE ASSESSEE. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 13 HAS NOT PRESSED GROUND NO. 1 RAISED BY THE ASSESSEE IN THIS APPEAL. THE SAME IS ACCORDINGLY DISMISSED AS NOT PRESSED. 7. AS REGARDS THE ISSUE RAISED IN GROUND NO. 2, IT IS OBSERVED THAT THE PROFIT OF THE CONSTRUCTION BUSINESS WAS DECLARED BY THE ASSESSEE AT SPECIFIED RATE AS PER THE PROVISIONS OF SECTION 44A D ON THE TURNOVER OF THE SAID BUSINESS. THE TURNOVER ADOPTED BY THE ASSE SSEE FOR THIS PURPOSE, HOWEVER, WAS INCLUSIVE OF A SUM OF RS.3,33,468/- RE CEIVED FROM M/S. TATA TELE SERVICES LIMITED ON ACCOUNT OF SERVICE CHARGES , LICENCE FEES, ETC. ACCORDING TO THE ASSESSING OFFICER, THE SAID AMOUNT WAS CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES SEPARATELY AND THE SAME, THEREFORE, WAS NOT ELIGIBL E FOR INCLUSION IN THE TURNOVER WHILE COMPUTING THE INCOME OF THE ASSESESE BY APPLYING THE SPECIFIED NET PROFIT RATE. ALTHOUGH IT WAS CONTENDE D ON BEHALF OF THE ASSESSEE IN THIS REGARD BEFORE THE LD. CIT(APPEALS) THAT THE RECEIPTS FROM TATA TELE SERVICES LIMITED WERE PART AND PARCEL OF THE BUSINESS RECEIPTS OF SALE OF FLATS AS FLATS WERE SOLD ALONG WITH THE SERVICES PROVIDED BY THE TATA TELE SERVICES LIMITED, THE LD. CIT(APPEALS) DI D NOT ACCEPT THE SAME AS THE ASSESSEE COULD NOT SUBSTANTIATE HIS CLAIM WI TH ANY DOCUMENTARY EVIDENCE. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS REITERATED THE SUBMISSION MADE ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(APPEALS). HE, HOWEVER, HAS FAILED TO ESTABL ISH ON THE EVIDENCE THAT THE AMOUNT IN QUESTION RECEIVED FROM M/S. TATA TELE SERVICES LIMITED ON ACCOUNT OF SERVICE CHARGES, LICENCE FEES, ETC. WAS PART OF THE TOTAL TURNOVER OR GROSS RECEIPTS OF THE ASSESEE ON ACCOUN T OF CONSTRUCTION BUSINESS AND THIS BEING SO, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) UPHOLDING THE ACTION OF THE AS SESSING OFFICER IN NOT TAKING INTO ACCOUNT THE SAID AMOUNT FOR THE PURPOSE OF COMPUTING THE INCOME OF THE ASSESSEE FROM CONSTRUCTION BUSINESS B Y APPLYING THE PRESCRIBED NET PROFIT RATE AS PER THE PROVISIONS OF SECTION 44AD. THE SAME IS, THEREFORE, UPHELD AND GROUND NO. 2 OF THE ASSES SEES APPEAL IS DISMISSED. I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 5 OF 13 8. AS REGARDS THE ISSUE RAISED IN GROUND NO. 3 RELA TING TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUST AINED PARTLY BY THE LD. CIT(APPEALS) ON ACCOUNT OF EXPENSES CLAIMED TO BE INCURRED BY THE ASSESSEE ON INTERIOR DECORATION, IT IS OBSERVED TH AT THE EXPENSES CLAIMED BY THE ASSESSEE ON RENOVATION OF SHOP WERE DISALLOW ED BY THE ASSESSING OFFICER AS THE ASSESESE WAS NOT THE OWNER OF ANY FI XED ASSETS AS SEEN FROM THE RELEVANT BALANCE-SHEET. MOREOVER, THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS CLAIM FOR THE SAID EXPENSES. BEFORE THE LD. CIT(APPEALS), A DIFFERENT STAND WAS TAKEN BY THE ASSESSEE BY SUBMITTING THAT THE EXPENSES IN QUESTIO N WERE ACTUALLY INCURRED FOR THE PURPOSE OF PUBLICITY AND TO ATTRAC T MORE CUSTOMERS BY DECORATING THE SHOP PARTICULARLY DURING DURGA PUJA, DEEPAVALI, CHRISTMAS, BENGALI AND ENGLISH NEW YEAR, HOLI, ETC. BY COLOURF UL LIGHTS ETC. ALTHOUGH THIS NEW STAND TAKEN BY THE ASESSEE WAS ALSO NOT SU PPORTED BY ANY BILLS/VOUCHERS, THE LD. CIT(APPEALS) CONSIDERED IT REASONABLE THAT SOME EXPENSES OF THIS NATURE MIGHT HAVE BEEN INCURRED BY THE ASSESSEE DURING FESTIVE SEASONS. HE ACCORDINGLY RESTRICTED THE DISA LLOWANCE OF RS.1,50,097/- MADE BY THE ASSESSING OFFICER ON THIS ISSUE TO RS.1,00,000/- . 9. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE HAS REITERATED THE STAND TAKEN BY THE ASSESSEE ON THIS ISSUE BEFORE THE LD. CIT(APPEALS). HE HAS ALSO POINTED OUT THAT THE EXPE NDITURE INCURRED BY THE ASSESSEE ON RENOVATION/DECORATION IS ONLY 0.80% OF THE TOTAL TURNOVER OF THE LIQUOR SHOP. HOWEVER, KEEPING IN VIEW ALL TH E FACTS OF THE CASE INCLUDING THE NATURE OF THE ASSESSEES BUSINESS AS WELL AS HIS FAILURE TO PRODUCE ANY BILLS/VOUCHERS TO SUPPORT HIS CLAIM FOR RENOVATION/DECORATION EXPENSES, WE ARE OF THE VIEW THAT THE DISALLOWANCE SUSTAINED BY THE LD. CIT(APPEALS) ON THIS ISSUE AT RS.1,00,000/- IS QUITE FAIR AND REASONABLE AND HIS IMPUGNED ORDER ON THIS ISSUE DOES NOT CALL FOR ANY INTERFERENCE. GROUND NO. 3 OF THE ASSESSEES AP PEAL IS ACCORDINGLY DISMISSED. I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 6 OF 13 10. AS REGARDS THE ISSUE RAISED IN GROUND NO. 4 REL ATING TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUST AINED PARTLY BY THE LD. CIT(APPEALS) ON ACCOUNT OF REPAIRS AND MAINTENA NCE, IT IS OBSERVED THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE ON REP AIRS AND MAINTENANCE WAS DISALLOWED BY THE ASSESSING OFFICER AS THE ASSE SSEE DURING THE YEAR UNDER CONSIDERATION HAD NO ASSETS EXCEPT A WATER FI LTER. MOREOVER, THE ASSESSEE ALSO FAILED TO FURNISH THE RELEVANT DETAIL S AND DOCUMENTS IN SUPPORT OF HIS CLAIM FOR THE SAID EXPENDITURE. BEFO RE THE LD. CIT(APPEALS), IT WAS SUBMITTED BY THE ASSESSEE THAT THE STOCK OF LIQUOR WAS REQUIRED TO BE KEPT IN OLD RACKS AND SHOWCASES MAINTAINED IN TH E SHOP AND THE EXPENDITURE IN QUESTION WAS INCURRED FOR THE SAME. ALTHOUGH THE LD. CIT(APPEALS) FOUND SOME FORCE IN THIS SUBMISSION MA DE BY THE ASSESSEE, HE HELD THAT THE EXPENSES OF RS.1,90,531/- CLAIMED BY THE ASSESSEE ON REPAIRS AND MAINTENANCE WAS ON THE HIGHER SIDE. ACC ORDINGLY, HE SUSTAINED THE DISALLOWANCE MADE BY THE ASSESSING OF FICER ON THIS ISSUE TO THE EXTENT OF 50%. 11. AT THE TIME OF HEARING BEFORE US, THE LD. COUNS EL FOR THE ASSESSEE HAS SUBMITTED IN THE WRITTEN SUBMISSION THAT THE EXPEND ITURE IN QUESTION INCURRED BY THE ASSESESE ON REPAIRS AND MAINTENANCE OF OLD RACKS DID NOT RESULT IN CREATION OF ANY NEW ASSET AND THE SAME BE ING ONLY 1% OF THE TOTAL TURNOVER OF THE LIQUOR BUSINESS, THE LD. CIT( APPEALS) IS NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE MADE BY THE ASSESSI NG OFFICER ON THIS ISSUE TO THE EXTENT OF 50%. WE ARE UNABLE TO ACCEPT THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. AS RIGHTLY OBSERVED B Y THE LD. CIT(APPEALS), THE EXPENDITURE CLAIMED BY THE ASSESSEE ON REPAIRS AND MAINTENANCE WAS CERTAINLY ON THE HIGHER SIDE KEEPING IN VIEW THE NA TURE OF THE SAID EXPENDITURE AS WELL AS THE NATURE OF THE BUSINESS O F THE ASSESSEE. MOREOVER, THE RELEVANT DETAILS AND DOCUMENTS WERE N OT FURNISHED BY THE ASSESESE TO SUPPORT AND SUBSTANTIATE HIS CLAIM FOR THE SAID EXPENDITURE. HAVING REGARD TO ALL THESE FACTS OF THE CASE, WE AR E OF THE VIEW THAT THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) SUSTAINING T HE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE TO THE EXTEN T OF 50% DOES NOT CALL I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 7 OF 13 FOR ANY INTERFERENCE BEING FAIR AND REASONABLE. WE ACCORDINGLY UPHOLD THE SAME AND DISMISS THE GROUND NO. 4 OF THE ASSESSEES APPEAL. 12. THE ISSUE RAISED IN GROUND NO. 5 RELATES TO THE DISALLOWANCE OF RS.1,41,953/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF ENTERTAINMENT EXPENSES. THE EXPENSES OF RS.1,41,953/- CLAIMED TO BE INCURRED BY THE ASSESES E ON PAYMENT OF CONTRIBUTION TO LOCAL CLUB, ASSOCIATION, ETC. WHO A RRANGED CULTURAL PROGRAMMES WERE DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND OF LACK OF BUSINESS EXPEDIENCY. BEFORE THE LD. CIT(APP EALS), IT WAS CONTENDED BY THE ASSESSEE THAT HE HAD TO GIVE AWAY PASSES/TIC KETS OF VARIOUS CULTURAL OR MUSICAL PROGRAMMES TO SOME OF HIS REGUL AR CUSTOMERS FOR MAINTAINING GOOD CLIENT RELATIONSHIP. HOWEVER, KEEP ING IN VIEW THE NATURE OF THE BUSINESS OF THE ASSESSEE OF PURCHASE AND SALE OF LIQUOR ON RETAIL BASIS, THE LD. CIT(APPEALS) DID NOT ACCEPT T HIS CONTENTION OF THE ASSESSEE BY OBSERVING THAT THERE WAS NO NEED OF ENT ERTAINMENT OF CUSTOMERS IN THIS TYPE OF BUSINESS. HE ALSO NOTED T HAT NO SUPPORTING BILLS OR DOCUMENTS WERE PRODUCED BY THE ASSESSEE TO ESTAB LISH THE EXACT NATURE OF THE EXPENSES OR THE BUSINESS EXPEDIENCY THEREOF. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE IN THE WRITTEN SUBMISSION HAS REITERATED THE STAND TAKEN ON BEHALF OF THE ASSESSE E BEFORE THE LD. CIT(APPEALS). WE, HOWEVER, FIND NO MERIT IN THE SAM E KEEPING IN VIEW THE NATURE OF THE BUSINESS OF THE ASSESESE WHICH, IN OU R OPINION, HARDLY JUSTIFIED ANY CUSTOMER ENTERTAINMENT BY PROVIDING P ASSES/TICKETS OF VARIOUS CULTURAL OR MUSICAL PROGRAMMES. MOREOVER, A S CATEGORICALLY NOTED BY THE LD. CIT(APPEALS), NO DETAILS OR ANY DOCUMENT ARY EVIDENCE COULD BE FILED BY THE ASSESSEE EITHER BEFORE THE ASSESSING O FFICER OR EVEN BEFORE THE LD. CIT(APPEALS) TO SUPPORT AND SUBSTANTIATE HI S CLAIM OF ENTERTAINMENT EXPENDITURE. WE, THEREFORE, UPHOLD TH E IMPUGNED ORDER OF THE LD. CIT(APPEALS) CONFIRMING THE DISALLOWANCE MA DE BY THE ASSESSING OFFICER ON THIS ISSUE AND DISMISS GROUND NO. 5. I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 8 OF 13 13. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 6 R ELATING TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUST AINED PARTLY BY THE LD. CIT(APPEALS) ON ACCOUNT OF COST INCURRED BY THE ASSESSEE FOR PROVIDING SNACKS TO THE CUSTOMERS, IT IS OBSERVED THAT THE DI SALLOWANCE ON THIS ISSUE WAS MADE BY THE ASSESSING OFFICER IN THE ABSENCE OF ANY SUPPORTING EVIDENCE PRODUCED BY THE ASSESSEE. BEFORE THE LD. C IT(APPEALS), IT WAS CONTENDED BY THE ASSESSEE THAT HE DISTRIBUTED PACKE TS OF DRY SNACKS LIKE NUTS, CHIPS, ETC. FREE OF COST TO CUSTOMERS, WHO LI FTED LARGER QUANTITY OF LIQUORS. KEEPING IN VIEW THE NATURE OF THE ASSESSEE S BUSINESS, THE LD. CIT(APPEALS) HELD THAT INCURRING OF CERTAIN EXPENDI TURE OF THIS NATURE COULD NOT BE RULED OUT. HOWEVER, KEEPING IN VIEW TH E ABSENCE OF ANY SUPPORTING EVIDENCE, HE FOUND IT FAIR AND REASONABL E TO RESTRICT THE DISALLOWANCE TO 50% AS AGAINST 100% MADE BY THE ASS ESSING OFFICER. HAVING CONSIDERED THE SUBMISSIONS MADE BY THE ASSES SEE IN WRITING AS WELL AS THE MATERIAL AVAILABLE ON RECORD INCLUDING THE ORDERS OF THE AUTHORITIES BELOW, WE ARE OF THE VIEW THAT THE ORDE R OF THE LD. CIT(APPEALS) ALLOWING THE CLAIM OF THE ASSESSEE ON THIS ISSUE TO THE EXTENT OF 50% IS QUITE FAIR AND REASONABLE KEEPING IN VIE W THE NATURE OF THE ASSESSEES BUSINESS AS WELL AS THE FAILURE OF THE A SSESSEE TO PRODUCE ANY DOCUMENTARY EVIDENCE TO SUPPORT AND SUBSTANTIATE HI S CLAIM. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LD. CIT (APPEALS) ON THIS ISSUE AND DISMISS GROUND NO. 6. 14. THE ISSUE INVOLVED IN GROUND NO. 7 RELATES TO T HE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED PARTLY BY THE LD. CIT(APPEALS) ON ACCOUNT OF TEA & TIFFIN EXPENDITURE AND STAFF WELFARE CLAIMED BY THE ASSESSEE. 15. THE EXPENDITURE CLAIMED UNDER THE HEAD TEA AND TIFFIN AND STAFF WELFARE WERE EXPLAINED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AS THE EXPENSES INCURRED FOR PROVIDING LUNCH, SNACKS, ETC. TO STAFF DURING DUTY HOURS. IT WAS, HOWEVER, NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD ALSO CLAIMED SHOP EXPENSES AND GENERAL EXPENSES I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 9 OF 13 SEPARATELY. HE, THEREFORE, HELD THAT THE TEA & TIFF IN EXPENSES AND STAFF WELFARE EXPENSES CLAIMED BY THE ASSESSEE WERE IN TH E NATURE OF PERSONAL EXPENDITURE NOT RELATED TO HIS BUSINESS AND THE SAM E WERE DISALLOWED BY HIM. ON APPEAL, THE LD. CIT(APPEALS) RESTRICTED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE TO 50% OBSERVIN G THAT THE DISALLOWANCE ONLY TO THAT EXTENT WAS JUSTIFIED ON A CCOUNT OF PERSONAL AND NON-VERIFIABLE ELEMENT INVOLVED IN THE RELEVANT EXP ENDITURE. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, WE FIND NO INFIRMITY IN THE IM PUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE. EVEN THOUGH THE PERSONA L AND NON-VERIFIABLE ELEMENTS WERE INVOLVED IN THE TEA & TIFFIN EXPENSES AND STAFF WELFARE EXPENSES CLAIMED BY THE ASSESSEE AS POINTED OUT BY THE ASSESSING OFFICER, THE DISALLOWANCE OF THE ENTIRE CLAIM OF THE ASSESSE E AS MADE BY THE ASSESSING OFFICER WAS NOT JUSTIFIED IN THE FACTS OF THE CASE INCLUDING THE NATURE OF THE ASSESSEES BUSINESS AND IN OUR OPINIO N, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE WAS RIG HTLY RESTRICTED BY THE LD. CIT(APPEALS) TO 50% KEEPING IN VIEW THE INVOLVE MENT OF PERSONAL ELEMENT AS WELL AS NON-VERIFIABLE ELEMENT. WE, THER EFORE, UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSU E AND DISMISS GROUND NO. 7. 16. THE ISSUE INVOLVED IN GROUND NO. 8 RELATES TO T HE DISALLOWANCE OF 50% MADE BY THE ASSESSING OFFICER OUT OF CONVEYANCE EXPENSES, WHICH IS RESTRICTED BY THE LD. CIT(APPEALS) TO 25%. 17. THE EXPENSES OF RS.2,08,259/- CLAIMED BY THE AS SESSEE ON ACCOUNT OF CONVEYANCE WERE DISALLOWED BY THE ASSESSING OFFI CER TO THE EXTENT OF 50% KEEPING IN VIEW THE NATURE OF THE BUSINESS OF T HE ASSESSEE TO RUN LIQUOR SHOP. HE HELD THAT HARDLY ANY EXPENDITURE ON CONVEYANCE WAS REQUIRED TO BE INCURRED FOR THE BUSINESS OF THE ASS ESSEE AND ALSO NOTED THAT THE ENTIRE EXPENSES INCURRED BY THE ASSESSEE I N CASH ON CONVEYANCE WERE CLAIMED ON THE BASIS OF SELF-MADE VOUCHERS. ON APPEAL, THE LD. CIT(APPEALS) FOUND THE DISALLOWANCE OF 50% MADE BY THE ASSESSING I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 10 OF 13 OFFICER TO BE EXCESSIVE AND RESTRICTED THE SAME TO 25% KEEPING IN VIEW THE NATURE OF BUSINESS ACTIVITIES OF THE ASSESSEE A S WELL AS THE VOLUME OF TURNOVER. 18. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE A SSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIE W THAT THE INVOLVEMENT OF PERSONAL ELEMENT IN CONVEYANCE EXPENSES CLAIMED BY THE ASSESSEE CANNOT BE RULED OUT. KEEPING IN VIEW THE SAME AS WE LL AS THE FACT THAT THE ENTIRE CLAIM FOR THE CONVEYANCE EXPENSES INCURRED I N CASH WAS MADE BY THE ASSESSEE ON THE BASIS OF SELF-MADE VOUCHERS WIT HOUT GIVING THE RELEVANT DETAILS, WE FIND THAT THE DISALLOWANCE AS FINALLY MADE BY THE LD. CIT(APPEALS) TO THE EXTENT OF 25% OF THE ASSESSEES CLAIM FOR CONVEYANCE EXPENSES IS QUITE FAIR AND REASONABLE. THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE IS ACCORDINGLY UPHELD AN D GROUND NO. 8 OF THE ASSESSEES APPEAL IS DISMISSED. 19. AS REGARD THE ISSUE INVOLVED IN GROUND NO. 9 RE LATING TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUST AINED PARTLY BY THE LD. CIT(APPEALS) ON ACCOUNT OF CARRIAGE INWARD, IT IS OBSERVED THAT THE EXPENSES CLAIMED BY THE ASSESSEE ON CARRIAGE INWARD AMOUNTING TO RS.5,14,222/- WERE DISALLOWED BY THE ASSESSING OFFI CER AS HE FOUND THAT SIMILAR EXPENSES INCURRED FOR TAKING OF DELIVERY OF LIQUOR BOTTLES AND SENDING EMPTY BOTTLES WERE SEPARATELY CLAIMED BY TH E ASSESSEE AS DELIVERY EXPENSES. HE ALSO NOTED THAT THERE WAS FAI LURE ON THE PART OF THE ASSESSEE TO FURNISH ANY RELEVANT DETAILS OR DOCUMEN TS TO SUPPORT HIS CLAIM ON ACCOUNT OF CARRIAGE INWARD EXPENSES. BEFOR E THE LD. CIT(APPEALS), IT WAS SUBMITTED BY THE ASSESSEE THAT THE CARRIAGE INWARD EXPENSES RELATED TO BRINGING LOADED BOTTLES TO THE SHOP PREMISES WHILE DELIVERY CHARGES RELATED TO RETURNING OF EMPTY BOTT LES. IT WAS ALSO BROUGHT TO THE NOTICE OF THE LD. CIT(APPEALS) BY TH E ASSESSEE THAT THE EXPENSES INCURRED ON CARRIAGE INWARD WERE ONLY TO T HE EXTENT OF 2.76% OF HIS TURNOVER. THE LD. CIT(APPEALS) FOUND SOME MERIT IN THE SUBMISSIONS I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 11 OF 13 MADE BY THE ASSESSEE. HE ACCORDINGLY RESTRICTED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CARRIAGE INWARD EXPENSES TO 50%. 20. AT THE TIME OF HEARING BEFORE US, THE LD. COUNS EL FOR THE ASSESSEE HAS SUBMITTED THAT CONSIDERING THE HUGE NUMBER OF BOTTL ES BROUGHT IN AND LARGE NUMBER OF TRIPS INVOLVED, THE EXPENDITURE CLA IMED BY THE ASSESSEE ON CARRIAGE INWARD WHICH IS ONLY 2.76% OF HIS TURNO VER IS QUITE REASONABLE AND THE SAME SHOULD BE FULLY ALLOWED. WE ARE UNABLE TO ACCEPT THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE. IT IS OBSERVED THAT SEPARATE CLAIM ON ACCOUNT OF DELIVERY EXPENSES WAS MADE BY THE ASSESESE AND ALTHOUGH THE SAME WAS EXPLAINED BEFORE THE LD. CIT(APPEALS) AS RELATED TO RETURNING OF EMPTY BOTTLES, THERE IS NOT HING BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT ANY INCOME BY WAY OF S ALE OF EMPTY BOTTLES WAS DECLARED BY THE ASSESSEE. MOREOVER, THE RELEVAN T DETAILS AND DOCUMENTS TO SUPPORT AND SUBSTANTIATE HIS CLAIM FOR CARRIAGE INWARD EXPENSES WERE NOT FURNISHED BY THE ASSESSEE EITHER BEFORE THE ASSESSING OFFICER OR EVEN BEFORE THE LD. CIT(APPEALS). KEEPIN G IN VIEW ALL THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE DISALLOWAN CE OF 50% OUT OF CARRIAGE INWARD EXPENSES AS FINALLY MADE BY THE LD. CIT(APPEALS) IS FULLY JUSTIFIED. WE ACCORDINGLY UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND DISMISS GROUND NO. 9 . 21. GROUND NO. 10 IS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US. THE SAME IS ACCORDIN GLY DISMISSED. 22. THE ISSUE INVOLVED IN GROUND NO. 11 RELATES TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF TRANSPORT CHARGES. 23. WHILE EXPLAINING TRANSPORT CHARGES OF RS.3,34,3 97/- CLAIMED BY HIM, IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSI NG OFFICER THAT AS PER I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 12 OF 13 C&F AGREEMENT, TRANSPORT CHARGES ON INWARD DELIVERY WERE TO BE BORNE BY PRINCIPAL WHILE THAT ON OUTWARD DELIVERY WERE TO BE BORNE BY AGENT. THE RELEVANT DETAILS IN THIS REGARD, HOWEVER, COULD NOT BE FURNISHED BY THE ASSESSEE. THE ASSESSING OFFICER ALSO NOTED THAT NO TAX AT SOURCE WAS DEDUCTED BY THE ASSESSEE FROM THE PAYMENT OF TRANSP ORT CHARGES AS REQUIRED BY SECTION 194C. KEEPING IN VIEW THE FAILU RE OF THE ASSESSEE TO FURNISH THE RELEVANT DETAILS AS WELL AS THE COPY OF AGREEMENT AND HIS FAILURE TO DEDUCT TAX AT SOURCE AS REQUIRED BY SECT ION 194C, THE TRANSPORT CHARGES CLAIMED BY THE ASSESSEE WERE DISALLOWED BY THE ASSESSING OFFICER. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SAID DISALLOWANCE FOR THE SAME REASONS AS GIVEN BY THE ASSESSING OFFICER IN T HE ASSESSMENT ORDER. 24. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THERE WAS NO WRITTEN CONTRACT BETWEE N THE ASSESSEE AND THE TRANSPORT AGENTS AND IN ABSENCE OF THE SAME, TH E PROVISIONS OF SECTION 194C WERE NOT APPLICABLE AS HELD BY THE HONBLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF CIT(TDS), CHANDIGARH VS.- UNI TED RICE LAND LIMITED [174 TAXMAN 286]. WE ARE UNABLE TO ACCEPT THIS CONT ENTION OF THE LD. COUNSEL FOR THE ASSESSEE. FIRST OF ALL, IT IS OBSER VED THAT THE RELEVANT DETAILS AND DOCUMENTS TO SUPPORT AND SUBSTANTIATE T HIS CONTENTION ARE NOT PLACED ON RECORD BEFORE US. SECONDLY, IT WAS CL AIMED ON BEHALF OF THE ASSESSEE HIMSELF BEFORE THE ASSESSING OFFICER THAT THE OUTWARD DELIVERY CHARGES WERE BORNE BY THE AGENT AS PER C&F AGREEMEN T, BUT THE COPY OF THE SAID AGREEMENT WAS NEVER PRODUCED BY THE ASSESS EE. EVEN THE RELEVANT DETAILS OF THE TRANSPORT CHARGES WERE NOT FURNISHED BY THE ASSESSEE. THE DISALLOWANCE ON ACCOUNT OF TRANSPORT CHARGES THUS WAS MADE NOT ONLY BECAUSE OF THE FAILURE OF THE ASSESSE E TO DEDUCT TAX AT SOURCE BUT ALSO BECAUSE OF THE FAILURE OF THE ASSES SEE TO FILE THE RELEVANT DETAILS AND DOCUMENTS TO SUPPORT AND SUBSTANTIATE H IS CLAIM FOR DEDUCTION ON ACCOUNT OF TRANSPORT CHARGES. WE, THER EFORE, FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(APPE ALS) CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOU NT OF TRANSPORT I.T.A. NO. 2297/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 13 OF 13 CHARGES AND UPHOLDING THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE, WE DISMISS GROUND NO. 11 OF THE ASSESSEES A PPEAL. 25. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 21, 2017 . SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT M EMBER KOLKATA, THE 21 ST DAY OF JUNE, 2017 COPIES TO : (1) SHRI ANIL KUMAR PAIK, FLAT 2ABC, 2B, S.N. ROY ROAD, BEHALA, KOLKATA-700 034 (2) JOINT COMMISSIONER OF INCOME TAX (OSD), C.I.T.-III, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-VIII, KOL KATA; (4) COMMISSIONER OF INCOME TAX ,KOLKAT A (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/DDO INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.