Smt. Karpagam, CHENNAI V. DCIT, CHENNAI

ITA 2693/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3927 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 22-12-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO. 2693/MDS/2016 / // / ASSESSMENT YEAR : 2010-11 SMT. KARPAGAM, C/O. SHRI S. SRIDHAR, ADVOCATE, NEW NO.14,OLD NO.82, FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI 600 020. PAN : AKAPK5121A V. THE DEPUTY COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE III, CHENNAI ( / APPELLANT) ( !' / RESPONDENT) # / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE !' # / RESPONDENT BY : SMT. SUMATHY VENKATRAMAN, JCIT # / DATE OF HEARING : 22.12.2016 # / DATE OF PRONOUNCEMENT : 27.12.2016 / // / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 14, CHENNA I DATED 23.06.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2010 -11. 2. SHRI S. SRIDHAR, THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE ASSESSEE CLAIMED EXPENDITURE OF 73,18,704/- TOWARDS 2 I.T.A. NO. 2693/MDS/2016 WAGES AND CARRIAGE OUTWARDS TO THE EXTENT OF 39,63,216/-. THE ASSESSING OFFICER FOUND THE BILLS AND VOUCHERS PROD UCED BY THE ASSESSEE BEFORE HIM WERE NOT IN ORDER. ACCORDINGLY , HE DISALLOWED 20% OF THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSE E. ON APPEAL BY THE ASSESSEE, THE CIT (APPEALS) FOUND THAT IT IS NOT A CASE OF TOTAL ABSENCE OF EVIDENCE FOR THE EXPENDITURE CLAIM ED. ACCORDINGLY, HE RESTRICTED THE DISALLOWANCE TO 15%. THE LD. COUNSEL SUBMITTED THE FACT, THAT THE EXPENDITUR E INCURRED FOR CARRYING OUT THE BUSINESS CANNOT BE DOUBTED, MERELY BECAUSE THE ASSESSEE COULDNT PRODUCE THE BILLS AND VOUCHERS IN THE FORM IN WHICH THE ASSESSING OFFICER EXPECTED. THERE CANNOT BE ANY REASON FOR DISALLOWING THE CLAIM OF THE ASSESSEE. THEREFO RE, THE LD. COUNSEL SUBMITTED THAT THE CIT (APPEALS) OUGHT TO H AVE DELETED THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER. 3. ON THE CONTRARY, SMT. SUMATHY VENKATRAMAN, THE L D. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE TOTA L EXPENDITURE CLAIMED BY THE ASSESSEE WAS NOT SUBSTANTIATED BY PR ODUCING NECESSARY BILLS AND VOUCHERS. SINCE THE GENUINENES S OF THE EXPENDITURE WAS IN DOUBT, THE ASSESSING OFFICER BY TAKING A LENIENT VIEW DISALLOWED THE CLAIM OF THE ASSESSEE TO THE EX TENT OF 20%. THE CIT (APPEALS) FURTHER RESTRICTED THE DISALLOWAN CE TO 15%. ACCORDING TO THE LD. DEPARTMENTAL REPRESENTATIVE, I T IS A CLEAR CASE FOR DISALLOWING THE ENTIRE CLAIM OF THE ASSESSEE. SINCE BOTH THE AUTHORITIES BELOW ARE VERY LENIENT AND CONSIDERED T HE CASE OF THE ASSESSEE SYMPATHETICALLY NO INTERFERENCE IS CALLED FOR. 3 I.T.A. NO. 2693/MDS/2016 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE IS ENGAGED IN THE BUSINESS OF TRADING IN WASTE NEWSPAPER COLLE CTED FROM THE STREET VENDORS. THE WASTE PAPERS COLLECTED FROM TH E STREET VENDORS ARE SEGREGATED IN DIFFERENT CATEGORIES AND DISPOSED OFF. IN THE COURSE OF BUSINESS ACTIVITY, THE ASSESSEE CLAIMED T HAT ALL THE WASTER PAPERS AND THE MATERIAL COLLECTED IN THE COURSE OF THE BUSINESS WERE SORTED OUT AND THE REJECTED PAPERS WERE THROWN AWAY . THE ASSESSEE HAS PAID WAGES ON WEEKLY BASIS TO THE EMPL OYEES. THE ASSESSEE HAS CLAIMED 73,18,704/- TOWARDS WAGES AND TRANSPORT CHARGES TO THE EXTENT OF 39,63,216/-. THE ASSESSING OFFICER HOWEVER FOUND THAT THE BILLS AND VOUCHERS PRODUCED BY THE ASSESSEE ARE NOT IN ORDER. ACCORDINGLY, HE RESTRI CTED THE DISALLOWANCE OF 20% ON THE CLAIM OF THE ASSESSEE. ON FURTHER APPEAL, THE CIT (APPEALS) HOWEVER RESTRICTED TO 15% . THIS TRIBUNAL IS OF CONSIDERABLE OPINION THAT UNLESS THE ASSESSEE INCURRED THE EXPENDITURE, SHE CANNOT CARRY ON THE BUSINESS. NO DOUBT, THERE ARE CERTAIN DISCREPANCIES IN THE BILLS AND VOUCHERS PRO DUCED BY THE ASSESSEE. HOWEVER, AS RIGHTLY OBSERVED BY THE CIT (APPEALS), THIS IS NOT A CASE OF ABSENCE OF ANY EVIDENCE. THE VERY FACT THAT THE ASSESSING OFFICER ALLOWED 80% OF THE TOTAL CLAIM AN D RESTRICTED THE DISALLOWANCE ONLY TO 20% SHOWS THAT THE ASSESSEE HA S INFACT INCURRED THE EXPENDITURE. THEREFORE THIS TRIBUNAL IS OF THE CONSIDERED OPINION, DISALLOWANCE OF 10% OF THE TOTA L CLAIM WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITIES ARE MODIFIED AND THE ASSESSING OFFICER IS DIRECTED TO DISALLOW 10% OF THE TOTAL CLAIM OF THE EXPENDITURE. 4 I.T.A. NO. 2693/MDS/2016 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED ON 27 TH DECEMBER, 2016 AT CHENNAI. SD/- SD/- ( . . ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 27 TH DECEMBER, 2016. JR. # ! $ % $ /COPY TO: 1. /APPELLANT 2. !' /RESPONDENT 3. &' ( ) /CIT(A) 4. &' /CIT 5. ! $ /DR 6. () /GF.