DCIT CEN CIR 6(3), MUMBAI V. E-LAND APPARELS LTD, MUMBAI

ITA 2355/MUM/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 3571 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 03-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D G
• Assessee Lawyers: PRAVESH ADVANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2355/M/2017 ASSESSMENT YEAR: 2012-13 DCIT, CENTRAL CIRCLE 6(3), 19 TH FLOOR, AIR INDIA BLDG., NARIMAN POINT, MUMBAI - 400021 VS. M/S. E-LAND APPARELS LIMITED, OFFICE NO.509, 5 TH FLOOR, WESTERN EDGE-1, WESTERN EXPRESS HIGHWAY, MAGATHANE, BORIVALI (E), MUMBAI 400 066 PAN: AACCM 6461E (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI PRAVESH ADVANI, A.R. REVENUE BY : SHRI D.G. PANSARI, D.R. DATE OF HEARING : 19.09.2018 DATE OF PRONOUNCEMENT : 27.09.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 31.01.2017 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2012-13. 2. THE ONLY GROUND RAISED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) RESTRICTING THE DISALLOWANCE TO 2% OF THE CASH EXPENDITURE INCURRED BY THE ASSESSEE AS AGAINST 5% DISALLOWED BY THE AO ON ACCOUNT OF NON PRODUCTION OF DOCUMENTA RY EVIDENCE AND OTHER RECORDS. ITA NO.2355/M/2017 M/S. E-LAND APPARELS LIMITED 2 3. THE FACTS IN BRIEF ARE THAT AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT ASSESSEE HAS IN CURRED SOME EXPENSES IN CASH FOR WHICH EITHER NO BILLS, VO UCHERS WERE AVAILABLE OR SELF MADE VOUCHERS WERE PREPARED AND A FTER ISSUING SHOW CAUSE NOTICE TO THE ASSESSEE THE AO DISALLOWED 5% OF THE SAID EXPENDITURE. 4. AT THE OUTSET, THE LD. A.R. SUBMITTED THAT THE I SSUE INVOLVED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL I N ASSESSEES OWN CASE IN ITA NO.6330/M/2016 A.Y. 2011-12 ORDER D ATED 17.01.2018 WHEREIN IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO- ORDINATE BENCH OF THE TRIBUNAL DIRECTING THE AO TO MAKE THE DISALLOWANCE AT 3% OF THE CASH EXPENDITURE AND THER EFORE THE SAME SHOULD BE FOLLOWED IN THE CURRENT YEAR. 5. THE LD. D.R., ON THE OTHER HAND, DID NOT OBJECT TO THE SUBMISSION OF THE LD. A.R. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSE ES OWN CASE IN ITA NO.6330/M/2016 A.Y. 2011-12 (SUPRA). THE OP ERATIVE PART IS REPRODUCED AS UNDER: 12. WE NOTICED THAT THERE IS MERIT IN THE SUBMISSI ONS OF LEARNED AR. IN A.Y. 2008- 09 TO 2010-11, BOTH THE ASSESSEE AND THE REVENUE HA D FILED APPEALS. AS IN THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER HAD MADE ADHOC DISALLOWANCE OF 5% OF ENTIRE AMOUNT OF EXPENDITURE IN THOSE YEARS ALSO, E VEN THOUGH HE PROPOSED TO MAKE DISALLOWANCE FROM OUT OF EXPENSES INCURRED BY WAY OF CASH. THE LD CIT(A) RESTRICTED THE DISALLOWANCE TO 2%. SINCE BOTH THE P ARTIES HAD FILED THE APPEALS CHALLENGING THE DECISION OF LEARNED CIT(A), THE TRI BUNAL COULD INTERFERE WITH THE DECISION OF LD CIT(A) AND COULD SUSTAIN ADDITION TO THE EXTENT OF 3% OF THE CASH COMPONENT OF THE EXPENDITURE. HOWEVER, DURING THE Y EAR UNDER CONSIDERATION, THE ASSESSEE HAS ACCEPTED THE ORDER PASSED BY THE LEARN ED CIT(A) ON THIS ISSUE. WE ITA NO.2355/M/2017 M/S. E-LAND APPARELS LIMITED 3 HAVE NOTICED THAT THE LD CIT{A) HAS SUSTAINED ADDIT ION TO THE EXTENT OF 2% OF THE ENTIRE AMOUNT OF EXPENDITURE AND WE ARE OF THE VIEW THAT THE DISALLOWANCE SO SUSTAINED WOULD MEET THE OBJECTIVE SOUGHT TO BE ACH IEVED BY THE ASSESSING OFFICER. ACCORDINGLY, WE UPHOLD THE ORDER PASSED BY THE LEAR NED CIT(A) ON THIS ISSUE. 7. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISI ON OF THE CO- ORDINATE BENCH OF THE TRIBUNAL, DIRECT THE AO TO DI SALLOW THE EXPENDITURE AT 3% OF THE TOTAL EXPENDITURE AS AGAIN ST THE 5%. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.09.2018. SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 27.09.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.