Shiv Hari Computers, V. ITO, Ward-36(2),

ITA 2814/DEL/2004

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6865 (ITAT-DELHI)
• Duration Of Justice: 12 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 12-07-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 09-06-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN SENIOR
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH C CC C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND S SS SMT. BEENA A. PILLAI MT. BEENA A. PILLAI MT. BEENA A. PILLAI MT. BEENA A. PILLAI, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 2814/DEL/2004 2814/DEL/2004 2814/DEL/2004 2814/DEL/2004 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2001 2001 2001 2001 - -- - 02 0202 02 M/S SHIV HARI COMPUTERS, M/S SHIV HARI COMPUTERS, M/S SHIV HARI COMPUTERS, M/S SHIV HARI COMPUTERS, PLOT NO.7, 2 PLOT NO.7, 2 PLOT NO.7, 2 PLOT NO.7, 2 ND NDND ND FLOOR, FLOOR, FLOOR, FLOOR, PANKAJ PANKAJ PANKAJ PANKAJ PLAZA, PLAZA, PLAZA, PLAZA, NEW RAJDHANI ENCLAVE, NEW RAJDHANI ENCLAVE, NEW RAJDHANI ENCLAVE, NEW RAJDHANI ENCLAVE, DELHI DELHI DELHI DELHI 110 092. 110 092. 110 092. 110 092. PAN : AAJFS6559H. PAN : AAJFS6559H. PAN : AAJFS6559H. PAN : AAJFS6559H. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -36(2), 36(2), 36(2), 36(2), H HH H- -- -BLOCK, VIKAS BHAWAN, BLOCK, VIKAS BHAWAN, BLOCK, VIKAS BHAWAN, BLOCK, VIKAS BHAWAN, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 002. 110 002. 110 002. 110 002. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SACHIN JAIN, FCA. RESPONDENT BY : SHRI T. VASANT HAN, SENIOR DR. DATE OF HEARING : 12.07.2016 12.07.2016 12.07.2016 12.07.2016 DATE OF PRONOUNCEMENT : 20.07.2016 20.07.2016 20.07.2016 20.07.2016 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: :- -- - THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2001-0 2 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXVII, NEW DELHI DATED 29 TH MARCH, 2004. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. THAT THE ASSESSING OFFICER HAS ERRED IN MAKING AN ADDITION OF RS.2,95,000/- ON ACCOUNT OF PAYMENTS MADE IN CASH IN EXCESS OF RS.20,000/- U/S 40A(3) OF THE INCOME T AX ACT, 1961. HOWEVER THE ASSESSEE HAS NOT MADE ANY SINGLE PAYMENT IN EXCESS OF RS.20,000/- TO THE PARTY DURING T HE YEAR. 2. THAT THE ASSESSING OFFICER HAS ALSO ERRED IN MAKING AN ADDITION OF RS.2,05,200/- ON ACCOUNT OF NON VERIF ICATION ITA-2814/DEL/2004 2 OF PARTY. WHEREAS THE PARTY HAS PRODUCED DOCUMENTARY EVIDENCE VERIFYING THE TRANSACTION MADE DURING THE YEAR BEFORE THE COMMISSIONER (APPEALS). 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTN ERSHIP FIRM WHICH IS ENGAGED IN THE BUSINESS OF COMPUTER EDUCATION. THE ASSESSING OFFICER DISALLOWED THE TWO EXPENSES, ONE OF `2,9 5,000/- CLAIMED TO HAVE BEEN PAID BY THE ASSESSEE FOR ADVERTISEM ENT AND `2,05,200/- FOR REPAIRS AND MAINTENANCE CHARGES OF CO MPUTERS. THE ASSESSING OFFICER DISALLOWED THE SUM OF `2,95,000/- BY AP PLYING SECTION 40A(3) AND HE ALSO DISALLOWED THE SUM OF `2,05 ,200/- BECAUSE THE PAYEE VIZ., M/S SAM COMPUTERS WAS NOT FOUND AT THE ADDRESS GIVEN BY THE ASSESSEE. ON APPEAL, LEARNED CIT(A) REDUCED THE DISALLOWANCE IN RESPECT OF PAYMENT FOR ADVERTISEMENT TO M/S SAMAR A DVERTISING AT 20% OF THE EXPENSES CLAIMED BUT HE SUSTAINED THE DISALLO WANCE FOR COST OF REPAIRS AND MAINTENANCE OF COMPUTERS PAID TO M /S SAM COMPUTERS. THE ASSESSEE, AGGRIEVED BY THE ORDER OF LEAR NED CIT(A), IS IN APPEAL BEFORE US WHILE THE REVENUE HAS ACCEPTED THE ORDER OF THE CIT(A). 4. AFTER CONSIDERING THE FACTS OF THE CASE AND ARGUMEN TS OF BOTH THE SIDES, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF LEARNED CIT(A) WITH REGARD TO DISALLOWANCE OUT OF AD VERTISEMENT EXPENSES WHICH IS ALREADY REDUCED TO 20% BY THE CIT(A) . 5. SO FAR AS GROUND NO.2 IS CONCERNED, WE ARE OF THE OPINION THAT 100% DISALLOWANCE OF REPAIRS AND MAINTENANCE CHARGES O F THE COMPUTERS IS NOT JUSTIFIED. ADMITTEDLY, THE ASSESSEE IS I N THE BUSINESS OF PROVIDING COMPUTER LEARNING TO THE STUDENTS. THER EFORE, USE OF LARGE NUMBER OF COMPUTERS BY THE ASSESSEE IS NOT IN DISPUTE. IN SUCH CIRCUMSTANCES, EXPENDITURE ON REPAIRS AND MAINTENANCE OF COMPUTERS IS CERTAINLY FOR THE PURPOSE OF BUSINESS. MERELY BECAU SE THE PAYEE IS ITA-2814/DEL/2004 3 NOT FOUND AVAILABLE AT THE ADDRESS GIVEN BY THE ASSESSEE IN A VERIFICATION WHICH IS MADE SOME YEARS AFTER THE ACTUAL PAYMENT, IN OUR OPINION, 100% DISALLOWANCE OF THE EXPENDITURE IS NOT JUSTIFIED. IN OUR OPINION, IT WOULD MEET THE ENDS OF JUSTICE IF THE DI SALLOWANCE IS RESTRICTED TO 20%. ACCORDINGLY, GROUND NO.1 OF THE ASSESSEES APPEAL IS REJECTED AND GROUND NO.2 OF THE ASSESSEES APPEAL IS P ARTLY ALLOWED AND THE ASSESSING OFFICER IS DIRECTED TO RESTRICT THE DIS ALLOWANCE AT 20% OF `2,05,200/-. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY AL LOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 20.07.2016. SD/- SD/- (BEENA A. PILLAI (BEENA A. PILLAI (BEENA A. PILLAI (BEENA A. PILLAI ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S SHIV HARI COMPUTERS, M/S SHIV HARI COMPUTERS, M/S SHIV HARI COMPUTERS, M/S SHIV HARI COMPUTERS, PLOT NO.7, 2 PLOT NO.7, 2 PLOT NO.7, 2 PLOT NO.7, 2 ND NDND ND FLOOR, PANKAJ PLAZA, FLOOR, PANKAJ PLAZA, FLOOR, PANKAJ PLAZA, FLOOR, PANKAJ PLAZA, NEW RAJDHANI ENCLAVE, DELHI NEW RAJDHANI ENCLAVE, DELHI NEW RAJDHANI ENCLAVE, DELHI NEW RAJDHANI ENCLAVE, DELHI 110 092. 110 092. 110 092. 110 092. 2. RESPONDENT : INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD- -- -36(2), 36(2), 36(2), 36(2), H HH H- -- -BLOCK, VIKAS BHAWAN, NEW DELHI BLOCK, VIKAS BHAWAN, NEW DELHI BLOCK, VIKAS BHAWAN, NEW DELHI BLOCK, VIKAS BHAWAN, NEW DELHI 110 002. 110 002. 110 002. 110 002. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR