The ITO, Ward-5(2), Ahmedabad V. Pioneer Irrigation Pvt. Ltd., Ahmedabad

ITA 2774/AHD/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2042 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-02-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 30-09-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K I THAKKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C. AGRAWAL, AM) ITA NO.2774/AHD/2010 A. Y.: 2001-02 THE INCOME TAX OFFICER, WARD -5 (2), C. U. SHAH BUILDING, 2 ND FLOOR, AHMEDABAD VS PIONEER IRRIGATION PVT. LTD. 1, KANCHI CO-OPERATIVE SOCIETY, OPP. THALTEJ TEKRA, AHMEDABAD PA NO. AABCP 1492 K (APPELLANT) (RESPONDENT) APPELLANT BY SHRI DARSI SUMAN RATNAM, DR RESPONDENT BY SHRI K. I. THAKKAR, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XI , AHMEDABAD DATED 16 TH JULY,2010 FOR ASSESSMENT YEAR 2001-02, CHALLENGIN G THE DELETION OF ADDITION OF RS.7,38,395/- ON ACCOUNT OF DIESEL EXPENSES. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT IN THE O RIGINAL ASSESSMENT ORDER INCOME WAS DETERMINED AT RS.9,92,880/-. IN TH E SAID ORDER, THE AO MADE CERTAIN DISALLOWANCES/ ADDITIONS TO THE INC OME DECLARED BY THE ASSESSEE. ON APPEAL, THE LEARNED CIT(A) PARTLY ALLOWED AND CONFIRMED THE ADDITION MADE BY THE AO ON ACCOUNT OF DIESEL EXPENSES OF RS.7,38,395/-. ON FURTHER APPEAL, THE T RIBUNAL RESTORED BACK THE MATTER TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH. THE TRIBUNAL IN THE ORDER NOTED THAT THE LETTERS PRODUC ED BY THE ASSESSEE ITA NO.2774/AHD/2010 ITO, WARD- 5(2), AHMEDABAD VS PIONEER IRRIGATION PV T. LTD. 2 ISSUED BY THE EXECUTIVE ENGINEER, BHAVNAGAR SHOWS W ORK SANCTIONED IN ITS MEETING HELD ON 2-12-2000. THE TR IBUNAL, THEREFORE, DIRECTED THAT EXPENSES BE REEXAMINED TO ASCERTAIN T HE CLAIM OF THE ASSESSEE. THE AO CONSIDERING THE EXPLANATION OF THE ASSESSEE AGAIN MADE THE ADDITION. 3. THE ASSESSEE FILED DETAILED WRITTEN SUBMISSION B EFORE THE LEARNED CIT(A) WHICH IS INCORPORATED AT PAGES 3 TO 5 OF THE IMPUGNED ORDER IN WHICH IT WAS BRIEFLY EXPLAINED THAT SEVERA L LETTERS FROM GOVERNMENT DEPARTMENT WERE FILED TO SHOW THAT THE W ORK STARTED FROM 5 TH DECEMBER,2000 AND THE TRIBUNAL DIRECTED TO VERIFY THE SAME CORRESPONDENCE. IT WAS, THEREFORE, SUBMITTED THAT S INCE THE WORK STARTED FROM 5 TH DECEMBER, 2000, THEREFORE, ENTIRE EXPENDITURE SHAL L HAVE TO BE ALLOWED AS DEDUCTION. FURTHER, DETAILS W ERE FILED TO SHOW THAT CONTRACT RECEIPTS WERE RECEIVED AND DIESEL EXP ENSES BEING NECESSARY FOR EXECUTION OF THE SUB CONTRACT WERE SP END FOR THE PURPOSE OF BUSINESS. THE LEARNED CIT(A) EXAMINING T HE DETAILS ON RECORD AND THE CORRESPONDENCE NOTED THAT THE EXECUT IVE ENGINEER, BHAVNAGAR SANCTIONED THE TENDER ON 2 ND DECEMBER, 2000 AND WORK WAS STARTED FROM 5 TH DECEMBER,2000. THEREFORE, EXPENDITURE IS INCURRED FOR THE PURPOSE OF BUSINESS. DISALLOWANCE WAS ACCORDINGLY DELETED. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. THE LEARNED DR REFERRED TO THE LETTERS ISSUED BY THE EXECUTIVE ENGINEER, BHAVNAGAR WHICH WERE IN THE NAME OF M/S. B. PATEL INFRASTRUCTURE PVT. LTD. AND ARGUED THAT NO ITA NO.2774/AHD/2010 ITO, WARD- 5(2), AHMEDABAD VS PIONEER IRRIGATION PV T. LTD. 3 CONTRACT WAS SANCTIONED TO THE ASSESSEE AND NO WORK STARTED BY THE ASSESSEE. HOWEVER, WE FIND THAT THE ASSESSEE IN THE EARLIER PROCEEDINGS BEFORE THE TRIBUNAL PLEADED THAT THE AS SESSEE IS A SUB CONTRACTOR AND ORIGINAL WORK WAS ALLOTTED IN FAVOUR OF B. PATEL INFRASTRUCTURE PVT. LTD. IN URGENT CIRCUMSTANCES A S THE PIPE LINES WERE TO GET IMMEDIATELY INSTALLED, THE AUTHORITIES ASKED THE ASSESSEE TO COMPLETE THE WORK. THE MAJOR WORK WAS OF DIGGIN G BY JCB MACHINERY WHICH REQUIRED DIESEL. THE TRIBUNAL ACCOR DINGLY DIRECTED TO VERIFY THE LETTERS ISSUED BY THE EXECUTIVE ENGINEER , BHAVNAGAR IN ORDER TO ASCERTAIN THE CLAIM OF THE ASSESSEE. THERE FORE, THERE IS NO MERIT IN THE CONTENTION OF THE LEARNED DR. THE CORR ESPONDENCE AND THE MATERIAL PRODUCED ON RECORD SUPPORT THE CASE OF THE ASSESSEE THAT THE ASSESSEE SPENT DIESEL EXPENSES FOR THE PUR POSE OF BUSINESS AS WERE REQUIRED FOR COMPLETING THE SUB CONTRACT. C ONSIDERING THE FACTS AND CIRCUMSTANCES AND MATERIAL ON RECORD, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. THE SAME IS ACC ORDINGLY DISMISSED. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 18-02-2011 AT 2PM SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 18- 02-2011 LAKSHMIKANT/- ITA NO.2774/AHD/2010 ITO, WARD- 5(2), AHMEDABAD VS PIONEER IRRIGATION PV T. LTD. 4 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 D Y. REGISTRAR, ITAT, AHMEDABAD