Shri Jagrutbhai Kesharbhai Mehta, Ahmedabad V. The Income tax Officer,Ward-11(1), Ahmedabad

ITA 2556/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89409 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 14-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: S N SHAH

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD 0 0 , !' , # $ BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER NO.2556/AHD/2011 % &% / ASSESSMENT YEAR: 2008-09 JAGRUTBHAI K. MEHTA, PROP. ROYAL MARKETING, RACHANA 25-B SAMAST BRAHMKSHATRIYA SOCIETY, NR.SHANTIVAN,NARAYANNAGAR ROAD, PALDI, AHMEDABAD-380 007. VS INCOME TAX OFFICER, WARD 11(1), AHMEDABAD. '( / (APPELLANT) )' '( / (RESPONDENT) APPELLANT BY SHRI S.N. SHAH RESPONDENT BY SMT. SONIA KUMAR, SR.D.R. / DATE OF HEARING : 06/05/2015 / DATE OF PRONOUNCEMENT: 13/05/2015 IT A NO.2556/AHD/2011 2 * / O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT (A) XVI AHMEDABAD DATED 7-9-2011. 2. GROUND NUMBER ONE OF THE APPEAL IS GENERAL IN NA TURE AND HENCE REQUIRES NO SEPARATE ADJUDICATION BY US. 3. GROUND NUMBER TWO OF THE APPEAL IS DIRECTED AGAI NST THE ORDER OF CIT (A) IN CONFIRMING THE ADDITION OF RS.3,26,368/- BEING DISCOUNT CHARGES UNDER SECTION 40 (A) (IA) OF THE INCOME TAX ACT 1961. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRA DING IN KITCHEN WARE. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA S DEBITED RS.3,26, 368/- UNDER THE HEAD DISCOUNT EXPENSES. THE ASSESSE E EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE SAID AMOUNT REPRESEN TS CASH DISCOUNT AND THE AMOUNT WHICH IS NOT RECEIVABLE AGAINST SALE OF GOODS AND NO TDS WAS LEGALLY REQUIRED TO BE DEDUCTED THEREON. HOWEVE R, THE ASSESSING OFFICER DISALLOWED THE AFORESAID AMOUNT BY INVOKING PROVISIONS OF SECTION 40(A) (IA) ON THE GROUND OF FAILURE OF THE ASSESSEE TO DEDUCT TDS THEREON. 5. ON APPEAL CIT (A) CONFIRMED THE ACTION OF THE AS SESSING OFFICER. 6. BEFORE US THE AUTHORISED REPRESENTATIVE OF THE A SSESSEE SUBMITTED THAT THE ASSESSEE WAS NOT LIABLE TO DEDUC T TDS ON THE ABOVE DISCOUNT AND THEREFORE THE DISALLOWANCE WAS NOT JUS TIFIED. IT A NO.2556/AHD/2011 3 7. ON THE OTHER HAND THE DEPARTMENTAL REPRESENTATIV E SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 8. WE FIND THAT IT IS NOT IN DISPUTE THAT THE AMOUN T IN QUESTION REPRESENTED DISCOUNT WHICH WAS ALLOWED BY THE ASSES SEE TO THE PARTIES TO WHOM GOODS WERE SOLD BY THE ASSESSEE. THUS THE D ISCOUNT IN FACT GOES ON TO REDUCE OR ABATE THE SALE VALUE OF THE GO ODS. NO MATERIAL COULD BE BROUGHT ON RECORD BY THE ASSESSING OFFICER TO SHOW WHY AND UNDER WHICH SECTION OF THE INCOME TAX ACT THE ASSES SEE WAS LEGALLY OBLIGED TO DEDUCT TDS IN RESPECT OF THE AMOUNT IN Q UESTION. THE ONUS WHICH WAS ON THE REVENUE HAS NOT AT ALL BEEN DISCHA RGED BEFORE ALLEGING THAT THE ASSESSEE MADE A DEFAULT IN DEDUCTING TDS . THUS THE AFORESAID DISALLOWANCE MADE BY INVOKING PROVISIONS OF SECTION 40 (A) (IA) IS NOT SUSTAINABLE. WE THEREFORE DELETE THE DISALLOWANCE O F RS. 3,26,368/-AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 9. THE GROUND NUMBER 3 OF THE APPEAL OF THE ASSESSE E IS DIRECTED AGAINST THE ORDER OF THE CIT (A) IN CONFIRMING THE ADDITION OF RS.74,050/-BEING ONE FIFTH OF RS.3,70,293/- BEING M ISCELLANEOUS EXPENSES, MOBILE EXPENSES AND VEHICLE EXPENSES TREA TING IT AS FOR PERSONAL PURPOSES. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE O N RECORD. IN THE INSTANT CASE THE ASSESSING OFFICER DISALLOWED 20% O F EXPENSES UNDER THE HEAD MISCELLANEOUS EXPENSES, MOBILE EXPENSES AND VE HICLE EXPENSES ON THE GROUND OF PERSONAL USE. THE AUTHORISED REPRESEN TATIVE OF THE ASSESSEE SUBMITTED THAT NO MATERIAL WOULD BE BROUGH T ON RECORD BY THE ASSESSING OFFICER TO SHOW ANY PERSONAL EXPENSES WER E DEBITED AND ALSO SUBMITTED THAT THE DISALLOWANCE AT THE RATE 20% WAS EXCESSIVE AND WITHOUT BASIS. IT A NO.2556/AHD/2011 4 11. WE FIND THAT THE DISALLOWANCE WAS MADE ON ESTIM ATE. IN OUR CONSIDERED VIEW IT SHALL BE FAIR AND TO MEET THE IN TEREST OF THE JUSTICE TO RESTRICT THE DISALLOWANCE AT THE RATE 10% OF THE EX PENSES. THUS WE CONFIRM THE DISALLOWANCE TO THE EXTENT OF RS. 37,02 5/-AND DELETE THE BALANCE DISALLOWANCE OF RS.37,025/-. THUS THIS GROU ND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 12. IN THE DESERT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED ORDER PRONOUNCED IN THE COURT ON WEDNESDAY THE 13 TH MAY, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 13 /05/2015 * + )#',- .-&' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III 5. !' ## , / DR, ITAT, 6. '$% & / GUARD FILE. * / BY ORDER, / / 0 ( DY./ASSTT.REGISTRAR) IT A NO.2556/AHD/2011 5 , / ITAT, AHMEDABAD PATKI 1. DATE OF DICTATION- : 13-5-2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13-5-2015 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. -13-5-2015 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 13-5-2015. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14-5 -2015 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER