M/s. Minal Intermediates, Ahmedabad V. The Asstt. Commissioner of Income Tax, Circel-7(2), Ahmedabad

ITA 2496/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2539 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 13-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHRIS K DEV
• Assessee Lawyers: SHRIS N DIVATIA
• Keywords: TDS
• Section: 143(3)

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER &SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./I.T.A. NO.2496/AHD/2017 ( / ASSESSMENT YEAR: 2014-15) M/S MINAL INTERMEDIATES PLOT NO. 1504 PHASE IV GIDC ESTATE, NARODA AHMEDABAD- 382330 / VS. ACIT CIRCLE- 7(2) NATURE VIEW BUILDING OFF ASHRAM ROAD AHMEDABAD ./ ./PAN/GIR NO. : AAE FM5 214 A ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRIS. N. DIVATIA, A.R. / RESPONDENTBY: SHRIS. K. DEV, SR. DR !' /DATE OFHEARING 13/06/2019 #$!' / DATE OF PRONOUNCEMENT 18/06/2019 %& /O R D E R PER AMARJIT SINGH - AM: THE APPEAL FILED BY THE ASSESSEE FOR A.Y. 2014-15, ARISE FROM ORDER OF THE CIT(A)-7, AHMEDABAD DATED 21.08.2017, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. ALL THE THREE GROUND OF APPEAL OF THE ASSESSEE A GAINST THE ORDER OF LD. CIT(A) ARE PERTAINED TO THE SOLITARY ISSUE OF DISALL OWANCE OF VARIOUS EXPENSES TO THE AMOUNT OF RS. 3,88,890/-. 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLAR ING INCOME OF RS. 1,54,50,068/- WAS FILED ON 30.11.2014. SUBSEQUENTL Y THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE OF U/S. 143(2) OF THE ACT ON 01.09.2015. ITA NO. 2496/AHD/2017 A.Y. 2014-15 2 DURING THE COURSE OF ASSESSMENT THE A.O. HAS NOTIC ED THAT ASSESSEE HAS CLAIMED FOLLOWING EXPENSES IN THE PROFIT AND LOSS A CCOUNT: 1. MACHINERY REPAIRS RS. 14,16,591/- 2. TECHNICAL STAFF SALARY RS. 16,08,308/- 3. POLLUTION EXP. RS. 8,64,040/- THE A.O. HAS ASKED THE ASSESSEE TO FURNISH THE NAME , ADDRESS AND PAN OF THE PERSON TO WHOM THE AFORESAID EXPENSES HAVE BEEN PAID ALONG WITH TDS DETAIL. THE ASSESSEE HAS FAILED TO FURNISH THE DETAIL REQUIR ED BY THE ASSESSEE, THEREFORE, THE A.O. HAS DISALLOWED 10% OF THE AFORESAID EXPENSES T O THE AMOUNT OF RS. 3,88,890/- (10% OF RS. 38,88,939/-) AND ADDED TO THE TOTAL INC OME OF THE ASSESSEE. 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. DURING THE COURSE OF APPELLATE PROCEEDING BEFORE U S THE LD. COUNSEL HAS FILED PAPER BOOK CONTAINING DETAIL OF INFORMATION A ND DOCUMENT SUBMITTED BEFORE AO AND CIT(A) DURING THE COURSE OF ASSESSMENT AND A PPELLATE PROCEEDINGS. THE COUNSEL HAS ALSO CONTENDED THAT ASSESSEE HAS FILED SUFFICIENT INFORMATION AND DETAIL OF THE EXPENDITURE, THEREFORE, LD. CIT(A) IS NOT JUS TIFIED IN CONFIRMING THE DISALLOWANCE OF 10% OF THE EXPENSES MADE BY THE A.O . 5. ON THE OTHER HAND THE LD. DR HAS SUPPORTED THE OR DER OF LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED T HE MATERIAL ON RECORD. IT IS NOTICED THAT THE ASSESSEE HAS CLAIMED TOTAL EXPENSE S TO THE AMOUNT OF RS. 3,88,939/- UNDER THE HEAD MACHINERY REPAIR EXPENSES, POLLUTION EXPENSES AND TECHNICAL STAFF SALARY. THE A.O. HAS DISALLOWED 10% OF SUCH EXPENS ES ON ACCOUNT OF NOT FURNISHING THE SPECIFIED INFORMATION BY THE ASSESSE E. IN THIS REGARD, WE HAVE NOTICED THAT ASSESSEE IN ITS SUBMISSION MENTIONED A T PAGE 9 TO 14 OF THE CIT(A) ORDER HAS FURNISHED THE DETAIL OF TECHNICAL STAFF T O WHOM THE SALARY WAS PAID BY A/C PAYEE CHEQUE UNDER THE HEAD TECHNICAL STAFF SALARY AND ALSO GIVEN THE DETAIL OF ITA NO. 2496/AHD/2017 A.Y. 2014-15 3 MAJOR AMOUNT OF EXPENSES IN RESPECT OF REPAIRING OF MACHINERY AND MOST OF THE PAYMENT WERE MADE BY A/C PAYEE CHEQUE. SIMILARLY I N RESPECT OF POLLUTION CONTROL EXPENSES IT WAS SUBMITTED THAT MOST OF THE PAYMENTS WERE MADE BY A/C PAYEE CHEQUE AND A COPY OF HIGH AMOUNT OF EXPENSES WERE A LSO ENCLOSED. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES I T IS CLEAR THAT THE ASSESSEE HAS FAILED TO FURNISH THE COMPLETE SUPPORTING EVIDE NCES IN RESPECT OF AFORESAID EXPENSES AS DESIRED BY THE A.O., HOWEVER, AFTER CON SIDERING THE DETAILED FURNISHED BY THE ASSESSEE WE CONSIDER THAT IT WILL BE REASONA BLE TO RESTRICT THE DISALLOWANCE TO THE EXTENT OF 5% OF THE EXPENSES AS AGAINST DISALLO WANCE OF 10% OF SUCH EXPENSES MADE BY THE A.O. THEREFORE, WE RESTRICT THE DISALLO WANCE 5% OF THE ABOVE EXPENSES I.E. RS. 1,94,445/- (5% OF RS. 3,88,939/-) . ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. SD/- SD/- (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEM BER AHMEDABAD: DATED 18/06/2019 TANMAY TRUE COPY / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. % / ASSESSEE 3. '( ! )! / CONCERNED CIT 4. )! - / CIT (A) 5. *+, ! ( , ' ( , -.%'% / DR, ITAT, AHMEDABAD 6. ,/ 0 / GUARD FILE. BY ORDER / %& , 1 / - ' ( , -.%'% 2 THIS ORDER PRONOUNCED IN OPEN COURT ON 18/06/2019