Farmgate Agro Milch P.Ltd, New Delhi V. ACIT, Circle-9(1), New Delhi

ITA 2541/DEL/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3059 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 12-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMPOORN ANAND SETH SENIOR
• Assessee Lawyers: K SAMPATH SHRI V RAJA KUMAR
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.2541/DEL./2018 (ASSESSMENT YEAR : 2013-14) M/S. FARMGATE AGRO MILCH P. LTD., VS. ACIT, CIRCLE 9 (1), 9, PARK AREA, GANGESHWAR DHAM ROAD, NEW DELHI. KAROL BAGH, NEW DELHI 110 005. (PAN : AABCF6486D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH, ADVOCATE SHRI V. RAJA KUMAR, ADVOCATE REVENUE BY : SHRI SAMPOORN ANAND SETH, SENIOR DR DATE OF HEARING : 23.02.2021 DATE OF ORDER : 03.03.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. FARMGATE AGRO MILCH P. LTD. (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 27.03.2018 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-34, NEW DELHI QUA THE ASSESSMENT YEAR 2013-14 ON THE GROUNDS INTER ALIA T HAT :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) ERRED IN : ITA NO.2541/DEL./2018 2 1. CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N MAKING AN ADDITION OF RS.2,50,000/- ON ACCOUNT OF T RAVELLING EXPENSES ON AD HOC BASIS; 2. NOT GIVING CLEAR FINDING AND ONLY DIRECTING THE ASSESSING OFFICER TO RECOMPUTE THE INCOME TAX CHARG ED ON ASSESSED INCOME AS PER ASSESSMENT ORDER AT RS.1,66, 00,401/-. ' 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE COMPANY DURING T HE YEAR UNDER ASSESSMENT WAS INTO THE BUSINESS OF MANUFACTURING A ND TRADING OF DAIRY PRODUCTS. ASSESSING OFFICER (AO) FROM THE PR OFIT & LOSS ACCOUNT NOTICED THAT THE ASSESSEE HAS DEBITED A SUM OF RS.42,75,093/- ON ACCOUNT OF TRAVELLING AND CONVEYA NCE EXPENSES AND SUBSTANTIAL PORTIONS OF THE BILLS AND VOUCHERS UNDER THESE EXPENSES WERE INTERNALLY VOUCHED AND, THEREFORE, PE RSONAL ELEMENT CANNOT BE RULED OUT. FINDING NO EXPLANATION ON THE PART OF THE ASSESSEE, AO DISALLOWED A LUMP-SUM AMOUNT OF RS.2,5 0,000/- OUT OF THE TOTAL EXPENSES OF RS.42,75,093/- CLAIMED BY THE ASSESSEE AND THEREBY ASSESSED THE TOTAL INCOME AT RS.1,66,00,401 /-. 2. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING AN APPEAL WHO HAS CONFIRMED THE ADDITION BY DISMISSING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ITA NO.2541/DEL./2018 3 ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. GROUND NO.1 4. BARE PERUSAL OF THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) CONFIRMING THE LUMP SUM ADDITION OF RS.2,50,000 /- MADE BY AO GOES TO PROVE THAT BOTH AO AS WELL AS LD. CIT (A ) HAVE MADE/CONFIRMED THE ADDITION ON THE BASIS OF CONJECT URE AND SURMISES WITHOUT BRINGING ON RECORD ANY SUCH FACT C ALLING FOR DISALLOWANCE EITHER ON THE BASIS OF DEFECTS IN THE BOOKS OF ACCOUNT, WHICH HAVE OTHERWISE BEEN ACCEPTED OR ON THE BASIS OF ANY OTHER MATERIAL. 5. ASSESSEE COMPANY HAS GIVEN COMPLETE DETAIL OF TH E TRAVELLING EXPENSES CLAIMED, AVAILABLE AT PAGES 4 T O 26 OF THE PAPER BOOK, QUA WHICH NO FAULT HAS BEEN POINTED OUT BY TH E AO AS WELL AS LD. CIT (A). LD. CIT (A) IN PARA 5.3.4 OF THE IMPU GNED ORDER SPECIFICALLY ADMITTED THE FACT THAT, IT IS A FACT THAT AO HAS NOT POINTED OUT ANY SPECIFIC DEFECTS IN THE INTERNAL BI LLS AND VOUCHERS MAINTAINED BY THE ASSESSEE AND PRODUCED BEFORE THE AO DURING THE COURSE OF PROCEEDINGS. SO, MERELY ON THE BASIS OF CONJECTURE AND SURMISES THAT THERE COULD BE A PERSONAL ELEMENT INV OLVED IN THE TRAVELLING EXPENSES, NO SUCH DISALLOWANCE IS PERMIS SIBLE UNDER LAW. IN THESE CIRCUMSTANCES, DISALLOWANCE MADE BY THE AO AND ITA NO.2541/DEL./2018 4 CONFIRMED BY THE LD. CIT (A) IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE DELETED AND GROUND NO.1 RAISED BY THE ASSESSE E IS ALLOWED. GROUND NO.2 6. UNDISPUTEDLY, ASSESSEES INCOME HAS BEEN ASSESSE D AT RS.1,66,00,401/- BUT THE AO HAS WRONGLY CHARGED THE INCOME-TAX ON RS.2,25,04,372/-. 7. WHILE DECIDING THIS ISSUE, LD. CIT (A) RETURNED THE FOLLOWING FINDINGS :- 5.4. GROUND NO. 3 IS AGAINST AO'S ACTION OF WRONG LY CHARGING INCOME TAX ON RS.2,25,04,372/- AS AGAINST THE ASSESSED INCOME AT RS.L,66,00,401/-. AR HAS SUBMITTED THAT THE ASSESSED INCOME WAS OF RS.L,66,00,401/-, HOWEVER AO HAS WRON GLY ADOPTED TAXABLE INCOME AS RS.2,25,04,372/-. 5.4.1. DECISION:I HAVE CONSIDERED THE WRITTEN SUBMI SSIONS. AO IS DIRECTED TO ADOPT THE CORRECT FIGURE OF ASSES SED INCOME AS PER RECORDS/ASSESSMENT ORDER AND ACCORDINGLY COMPUT E TAX LIABILITY OF THE APPELLANT. 8. PERUSAL OF THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) AS WELL AS ASSESSMENT FRAMED U/S 143 (3) OF THE INCOME -TAX ACT, 1961 (FOR SHORT THE ACT) BY THE AO SHOWS THAT INCOME HAS BEEN ASSESSED AT RS.1,66,00,401/- BUT IT IS SURPRISING H OW AND UNDER WHAT CIRCUMSTANCES AO HAS ADOPTED THE TAXABLE INCOM E AT RS.2,25,04,372/-. IN OUR CONSIDERED VIEW, WHEN LD. CIT (A) HAS ALREADY DIRECTED THE AO TO ADOPT THE CORRECT FIGURE OF ASSESSED INCOME AS PER ASSESSMENT ORDER DATED 31.03.2016, AO WAS DUTY BOUND TO ADOPT THE CORRECT FIGURE OF ASSESSED INCOM E. IN THESE ITA NO.2541/DEL./2018 5 CIRCUMSTANCES, AO IS DIRECTED TO CHARGE INCOME-TAX ON THE ASSESSED INCOME OF RS.1,66,00,401/- AS PER ASSESSMENT ORDER, HENCE GROUND NO.2 IS ALLOWED. 8. RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 3 RD DAY OF MARCH, 2021. SD/- SD/- (ANIL CHATURVEDI) (KULDIP SING H) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 3 RD DAY OF MARCH, 2021. TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-34, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.