Apple Equipment Pvt. Ltd., Mehsana V. The Jt. CIT, Mehsana Range, Mehsana

ITA 2474/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6314 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 03-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 21-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNANI
• Assessee Lawyers: D K PARIKH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2474/AHD/2013 (ASSESSMENT YEAR: 2009-10) APPLE EQUIPMENT PVT. LTD. 102, GIDC PHASE II, DEDIYASAN MEHSANA V/S JOINT CIT MEHSANA RANGE, MEHSANA (APPELLANT) (RESPONDENT) PAN: AAGCA 2350Q APPELLANT BY : SHRI D.K. PARIKH, AR RESPONDENT BY : SHRI SANTOSH KARNANI, SR. D. R. ( )/ ORDER DATE OF HEARING : 03 -04-201 7 DATE OF PRONOUNCEMENT : 06 -04-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), GANDHINAGAR DATED 12.08.2013 PERTAINING TO A.Y. 200 9-10. ITA NO. 2474 /AHD/2013 . A.Y. 2009-10 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 5.70 LACS DISALLOWED BY THE A.O. IN RESPECT OF CERTAIN EXPENSES. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE IS ENGAGED IN MANUFACTURING ROAD CONSTRUCTION EQUIPMENT. THE RETU RN FOR THE YEAR WAS FILED ON 24.09.2009 DECLARING TOTAL INCOME OF RS. 2 0.35 LACS. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY ST ATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE COMPANY DEBITED FOLLOWING EXPENSE S IN THE PROFIT AND LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION: SR. NO. NAME OF THE PAYEE DESCRIPTION OF SERVICE AMOUNT (RS.) 1 HARIDUTT L. PARIHAR COMMISSION/ADMINISTRATIVE CHARGES FOR SALES 1,70,000/ - 2 NI LAYKUMAR HITENDRABHAI PATEL TECHNICAL SERVICE CHARGES 2,00,000/ - 3 DHAWNI RAJESH ROHRA PROFESSIONAL FEES. 2,00,000/ - 5. THE ASSESSEE WAS ASKED TO JUSTIFY THE GENUINENESS O F THE AFORE-STATED EXPENSES. THE ASSESSEE COMPANY FILED COPIES OF BILL S OBTAINED FROM THE PAYEES. ON PERUSAL OF THE BILLS SUBMITTED BY THE AS SESSEE, THE A.O. DOUBTED ABOUT THE GENUINENESS OF THE PAYMENTS BECAUSE IN TH E CASE OF PAYMENT TO HARIDUTT L. PARIHAR AND NILAYKUMAR HITENDRABHAI PAT EL THE BILLS WHICH WERE COMPUTER GENERATED ISSUED ON 31.03.2009 ONLY. BOTH THESE BILLS HAD SERIAL NO. 1 AND IN THE CASE OF HARIDUTT L. PARIHAR THE D ATE WAS TYPED AS ITA NO. 2474 /AHD/2013 . A.Y. 2009-10 3 04.04.2009 BUT LATER IT WAS CHANGED MANUALLY TO 31. 03.2009. THE A.O. FURTHER FOUND THAT THE PAYMENT TO DHAWNI RAJESH ROH RA HAS BEEN MADE FOR DESIGNING MINUS CHAMBER UNIT OF COLD STORAGE WHEREA S THE ASSESSEE COMPANY IS DEALING IN ROAD CONSTRUCTION EQUIPMENTS. THE A.O. FURTHER NOTICED THAT THE ASSESSEE COMPANY WHICH IS DEALING IN A SPECIFIC PRODUCT I.E. BITUMEN TANK AND CONTROL CABIN FOR ROAD CONSTRUCTIO N EQUIPMENT HAS MADE ENTIRE SALE TO M/S. APOLLO GROUP OF COMPANIES OF GU JARAT IN THE FINANCIAL YEAR UNDER CONSIDERATION. THEREFORE, THERE WAS NO NECESSITY TO PAY COMMISSION ON THE SALES SINCE THE ENTIRE SALES HAVE BEEN MADE TO ONLY ONE BUYER. ON FINDING NO REASONABLENESS FOR THE IMPUGNE D PAYMENTS, THE A.O. MADE THE ADDITION OF RS. 5.70 LACS. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT ALL THE PAYMENTS HAVE BEEN MADE BY ACCOUNT PAYEE CHEQUES AN D TAX HAVE BEEN DEDUCTED AT SOURCE AS PER THE PROVISIONS OF THE LAW . IT IS THE SAY OF THE LD. COUNSEL THAT THE A.O. CANNOT DECIDE WHICH EXPENSE, THE ASSESSEE SHOULD INCUR. THE LD. COUNSEL CONCLUDED BY SAYING THAT THE A.O. HAS SIMPLY DISREGARDED THE DOCUMENTARY EVIDENCES FILED IN SUPP ORT OF THE CLAIM OF THE EXPENSES. THE LD. CIT(A) FURTHER ERRED IN CONFIRMI NG THE DISALLOWANCES MADE BY THE A.O. ITA NO. 2474 /AHD/2013 . A.Y. 2009-10 4 8. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE REVENUE AUTHORITIES. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE RIV AL CONTENTIONS AND HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW. THE BONE OF CONTENTION IS THE PAYMENTS MADE TO THREE PERSONS AS MENTIONED ELSEWHERE. PAYMENT MADE TO HARIDUTT L. PARIHAR IS O N ACCOUNT OF COMMISSION/ADMINISTRATIVE CHARGES FOR SALES. IT IS TRUE THAT SHRI PARIHAR WORKED AS TRAINEE WITH THE ASSESSEE COMPANY IN F.Y. 2008-09. IT IS ALSO A FACT THAT THE COMPANY HAD DEPOSITED RS. 2 LACS IN H IS SAVINGS BANK ACCOUNT AND WAS WITHDRAWN BY THE COMPANY IMMEDIATELY. NILA YKUMAR HITENDRABHAI PATEL HAS BEEN PAID FOR TECHNICAL SERV ICES, THOUGH HE IS NOT HAVING ANY TECHNICAL QUALIFICATION BUT HAS CLAIMED TO BE WORKING WITH ASSESSEE COMPANY SINCE 2007. DHAWNI RAJESH ROHRA H AS BEEN PAID PROFESSIONAL FEES FOR DESIGNING A MINUS CHAMBER UNI T OF A COLD STORAGE, THOUGH IT IS AN ADMITTED FACT THAT THE ASSESSEE COM PANY IS DEALING IN ROAD CONSTRUCTION EQUIPMENT. 10. MERELY, BECAUSE THE PAYMENTS HAVE BEEN MADE BY ACCO UNT PAYEE CHEQUES SUBJECT TO TDS WOULD NOT JUSTIFY THE RENDERING OF T HE SERVICES BY THE AFOREMENTIONED THREE PERSONS. IT IS TRUE THAT THE A .O. CANNOT DECIDE WHICH EXPENDITURE, THE ASSESSEE HAS TO INCUR FOR CARRYING OUT THE BUSINESS BUT AT THE SAME TIME THE ONUS IS CLEARLY UPON THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE PAYMENTS AND IN THE CASE IN HAND , WE DO NOT FIND THAT THE ASSESSEE HAS DISCHARGED ITS ONUS. ITA NO. 2474 /AHD/2013 . A.Y. 2009-10 5 11. ALL THE PAYMENTS HAVE BEEN MADE TO TECHNICALLY UNQU ALIFIED PERSONS. THE COMMERCE GRADUATE IS BEING PAID FOR PROFESSIONAL CH ARGES FOR DRAWING MINUS CHAMBER FOR A COLD STORAGE, A PRODUCT WHICH I S NOT DEALT BY THE ASSESSEE IN ITS ORDINARY COURSE OF BUSINESS. WE FIN D THAT SHRI PARIHAR IN HIS STATEMENT, AS STATED THAT HE WAS GETTING RS. 8,000 /- TO 9,000/- AND IN CASE OF ANY REQUIREMENT HE USED TO GET CASH ON DEMAND BU T THERE IS NO MENTION OF SUCH PAYMENTS IN THE REGULAR BOOKS OF ACCOUNTS. WE FURTHER FIND THAT ALL THE PAYMENTS HAVE BEEN MADE BY A SINGLE TRANSACTION WHICH ITSELF SHOW THAT THROUGHOUT THE YEAR, NO PAYMENT WAS MADE TO TH E THREE PARTIES MENTIONED ELSEWHERE. 12. CONSIDERING THE CLINCHING FACTS IN TOTALITY, WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). APPEAL FILED BY THE ASSESSEE IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 06 - 04- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 06/04/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD