The ACIT, Circle-6, Surat V. M/s. Susha Founders & Engineers, Surat

ITA 2675/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9894 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-09-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 28-07-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDIP GARG

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM) ITA NO.2675/AHD/2008 A. Y: 2005-06 THE A. C. I. T., CIRCLE-6, ROOM NO.623, AAYAKAR BHAVAN, MAJURA GATE, SURAT VS M/S. SUSHA FOUNDERS & ENGINEERS, 158, GIDC, PANDESARA, SURAT PA NO. AAJSF 6039 E (APPELLANT) (RESPONDENT) APPELLANT BY SHRI SANDIP GARG, AR RESPONDENT BY SHRI HARDIK VORA, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-IV, SURAT D ATED 08-05-2008 FOR ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A)-IV, SURAT HAS ERRED IN DELETING THE ADDITION OF RS.5,40,328/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF SALES COMMISS ION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A)-IV, SURAT HAS ERRED IN RESTRICT ING THE ADDITION OF RS.4,11,780/- TO RS.1,01,942/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF VAR IOUS EXPENSES. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND ALSO CONSIDERED THE MATERIAL AVAILABLE ON RECORD. 3. ON GROUND NO.1 OF THE APPEAL, REGARDING DISALLOW ANCE OF RS.5,40,328/- OUT OF COMMISSION, THE AO OBSERVED TH AT THE ASSESSEE HAD PAID COMMISSION TO SHRI MANOJ SHARMA WHICH WAS MUCH HIGHER THAN THAT OF THE LAST YEAR. THE ADDITION WAS ACCORDINGLY MADE. THE LEARNED ITA NO.2675/AHD/2008 ACIT CIR-6, SURAT VS SUSHA FOUNDERS & ENGINEERS 2 CIT(A) NOTED THAT THIS ISSUE AROSE IN THE CASE OF T HE SAME ASSESSEE IN THE PRECEDING ASSESSMENT YEARS 2003-04 AND 2004-05 IN W HICH THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE VIDE HIS APPELLATE ORDERS DATED 22-12-2006 AND 24-05-2006. THE LEARNED CIT(A) ACCORDINGLY DELETED THE ADDITION. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT REVENUE PREFERRED APPEALS BEFORE ITAT AHMEDABAD D BENCH I N THE CASE OF THE SAME ASSESSEE FOR PROCEEDING YEARS 2003-04 AND 2004 -05 IN ITA NOS. 969 AND 3315/AHD/2007 AND DEPARTMENTAL APPEALS ON THE SIMILAR GROUND HAVE BEEN DISMISSED VIDE ORDER DATED 30-07-2 010. COPY OF THE ORDER IS FILED ON RECORD AND GIVEN TO THE LEARNED D R ALSO. THE LEARNED DR DID NOT DISPUTE THE ORDER OF THE TRIBUNAL AND SUBMI TTED THAT THE ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL AS NOTED ABOVE. 5. ON CONSIDERATION OF THE ABOVE FACTS, WE DO NOT F IND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LE ARNED CIT(A) IN ALLOWING THE APPEAL OF THE ASSESSEE. THE LEARNED CIT(A) FOLL OWED HIS APPELLATE ORDER FOR PRECEDING ASSESSMENT YEARS 2003-04 AND 2 004-05 FOR DELETING THE ABOVE ADDITION ON GROUND NO.1. THE ORDER OF THE LEARNED CIT(A) HAS BEEN CONFIRMED BY THE TRIBUNAL IN THE CASE OF THE SAME ASSESSEE VIDE ORDER DATED 30-07-2010 WHEREBY THE APPEALS OF REVEN UE ON THIS GROUND ARE DISMISSED. BY FOLLOWING THE SAME ORDER, WE DISM ISS THE GROUND NO.1 OF THE APPEAL OF THE REVENUE. 6. ON GROUND NO.2 OF THE APPEAL, THE AO DISALLOWED 20% OUT OF VARIOUS EXPENSES. THE AO MADE THE DISALLOWANCE ON T HE GROUND THAT THESE EXPENSES COULD HAVE BEEN INFLATE TO SOME EXTE NT AND SUFFICIENT DETAILS WERE NOT AVAILABLE IN SOME OF THE VOUCHERS. THE LEARNED CIT(A) DID NOT APPROVE THE FINDINGS OF THE AO. HOWEVER, HE HAS NOTED THAT SINCE NO DETAILS ARE MAINTAINED IN SOME OF THE VOUCHERS, THE REFORE, DISALLOWANCE OF ITA NO.2675/AHD/2008 ACIT CIR-6, SURAT VS SUSHA FOUNDERS & ENGINEERS 3 RS. 50,000/- IS REASONABLE AND OUT OF PERSONAL EXPE NSES ALSO 20% IS REASONABLE WHICH HAS ELEMENTS OF NON-BUSINESS AND P ERSONAL USER. THIS GROUND OF APPEAL WAS ACCORDINGLY PARTLY ALLOWED. 7. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LE ARNED CIT(A). THE AO HAS NOT GIVEN ANY SPECIFIC FINDING IN DISALLOWING THE E XPENDITURE OUT OF VARIOUS EXPENSES. THE FINDINGS OF THE AO SHOW THAT AD HOC ADDITION HAS BEEN MADE WITHOUT POINTING OUT ANY SPECIFIC ITEM OF THE EXPENDITURE WHICH IS NOT ADMISSIBLE OR WAS NOT SPENT FOR BUSINE SS PURPOSE. THE LEARNED CIT(A) ON PROPER APPRECIATION OF THE FACTS RIGHTLY DELETED SUBSTANTIAL ADDITION ON THIS GROUND. WE, THEREFORE, DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE SAME I S ACCORDINGLY DISMISSED. 8. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED ON 22-09-2010. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 22-09-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD