ACIT, UDAIPUR V. M/s. Kundan Mineals Processing Co-operative Society Ltd., UDAIPUR

ITA 284/JODH/2013

• Counselvise Citation: 28423314 RSA 2013
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-12-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO.284/JODH/2013 ASST. YEAR: 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S. KUNDAN MINERALS PROCESSING CIRCLE-1, UDAIPUR. CO-OPERATIVE SOCIETY, 205, VINAYAKA BUSINESS CENTRE, PULLA ROAD, FATEHPURA, UDAIPUR (PAN: AAAJK 1105 C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.A. JOSHI, D.R. RESPONDENT BY : NONE DATE OF HEARING : 05.12.2013 DATE OF PRONOUNCEMENT : 09.12.2013 ORDER PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE FOR A.Y. 2009-10 IS DIR ECTED AGAINST THE ORDER OF LD. CIT(A), UDAIPUR DATED 05.02.2013. 2. THIS CASE WAS HEARD ON THE BASIS OF WRITTEN REQU EST AND AFTER RELYING ON THE WRITTEN SUBMISSION FILED BY THE ASSESSEE RESPONDENT . 2 ITA NO.284/JODH/2013 A.Y. 2009-10 3. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS A PPEAL:- ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN:- 1) DELETING THE TRADING ADDITION OF RS.20,00,000/- MADE ON ACCOUNT OF NON-MAINTENANCE OF BILL/VOUCHERS IN RESPECT OF E XPENSES. 2) DELETING THE ADDITION OF RS.6,25,000/- MADE ON A CCOUNT OF EXPENSES INCURRED ON TRUCK BODY BUILDING BEING TREA TED AS CAPITAL EXPENDITURE AGAINST THE REVENUE EXPENDITURE CLAIMED BY THE ASSESSEE.. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A CO-OPERATIVE SOCIETY WHICH IS ENGAGED IN THE BUSINESS OF MINERAL PROCESSING AND ALSO EXECUTING CONTRACT WORK. FOR A.Y. 2009-10, THE ASSESSEE FILE D ITS RETURN OF INCOME ON 25.09.2009 AND DECLARED TOTAL INCOME OF RS.20,46,82 0/-. THE ASSESSEE IS DOING BUSINESS IN THE STATUS OF CO-OPERATIVE SOCIETY TAKI NG CONTRACT WORK/JOB WORK FROM M/S RAJASTHAN STATE MINES & MINERALS LIMITED, UDAIP UR. DURING THE YEAR, THE ASSESSEE TOOK JOB WORK AT MINES SITUATED IN THE VIL LAGE GOTAN, DISTRICT NAGAUR, RAJASTHAN. FOR EXECUTING THIS WORK THE ASSESSEE HA S TO DEPLOY SUITABLE MACHINERIES AND RAISING THE PRODUCTION OF LIME STONE WHICH IS U SED FOR CEMENT FACTORY. WHEN THE A.O. STARTED VERIFYING OF THE BOOKS OF ACCOUNT, IT WAS NOTICED THAT CERTAIN BILLS AND VOUCHERS ARE HANDMADE. WHEN REQUIRED TO EXPLAI N THIS, THE ASSESSEE FILED PHOTOCOPY OF BILLS AND VOUCHERS REGARDING EXPENSES AND GAVE PAN ALONG WITH NAMES AND ADDRESSES AND STATED THAT THE EXPENSES AR E FULLY VOUCHED. HOWEVER, THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNT, BILL S/VOUCHERS. IN THE ABSENCE OF 3 ITA NO.284/JODH/2013 A.Y. 2009-10 PROPER AND COMPLETE BILLS/VOUCHERS, THE GENUINENESS , CORRECTNESS AND THE VERACITY OF THE EXPENSES CLAIMED BY THE ASSESSEE IN RESPECT OF MINING EXPENSES, WAGES, INTERNAL SHIFTING CHARGES, REPAIRS & MAINTENANCE ET C. COULD NOT BE VERIFIED. THE ASSESSEE ALSO FAILED TO FILE THE DETAILS OF DIESEL EXPENSES CLAIMED AT RS.55,51,644-. THEREFORE, THE A.O. HAS DISALLOWED LUMP SUM AMOUNT OF RS.20,00,000/- OUT OF EXPENSES CLAIMED UNDER VARIOUS HEADS LIKE MINING E XPENSES, WAGES, INTERNAL SHIFTING CHARGES, REPAIRS & MAINTENANCE ETC. AGAIN ST THIS LUMP SUM ADDITION OF RS.20,00,000/-, THE ASSESSEE FILED APPEAL AND THE L D. CIT(A) HAS DELETED THE ENTIRE ADDITION AFTER COMPARING THIS ASSESSMENT YEAR WITH THE IMMEDIATELY PASSED A.Y. NAMELY A.Y. 2008-09 IN WHICH UNDER IDENTICAL FACTS AND CIRCUMSTANCES, THE ITAT VIDE THEIR ORDER IN ITA NO.284/JOD/2012 DATED 17.12 .2012 HAS HELD THAT THE A.O. HAS NOT FOUND ANY SPECIFIC INSTANCES OF EXPENSES WH ICH CAN BE EITHER SAID TO BE INFLATED OR TO BE NOT PROPERLY VOUCHED. ACCORDINGL Y, THE IMPUGNED ADDITION OF RS.20,00,000/- BASED ON ESTIMATED BASIS HAS BEEN DE LETED. 5. BEFORE US BOTH THE PARTIES HAVE MAINTAINED THEIR ORIGINAL ARGUMENTS IN THIS REGARD. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAVE FOUND THAT THE ASSESSEE IS MAINTAINING PROPER BOOKS OF ACCOUNT ALONG WITH BILL S/VOUCHERS FOR EACH EXPENDITURE ALONG WITH NAME AND FULL ADDRESSES OF T HE PAYEES FROM WHOM THE 4 ITA NO.284/JODH/2013 A.Y. 2009-10 ASSESSEE HAD PURCHASED MATERIALS. THE ADDITION OF RS.20,00,000/- HAS BEEN MADE ONLY ON ACCOUNT OF DIESEL AND OIL PURCHASE MADE DUR ING THE YEAR. THE ASSESSEE HAS FILED COMPLETE DETAILS OF DIESEL AND OIL EXPENSES B Y FILING COPY OF ACCOUNT MAINTAINED IN THIS REGARD. IT IS NOTICED THAT DIES EL AND OIL WERE PURCHASED FROM M/S. RAM & SHYAM PETROL BUNK AT VILLAGE GOTAN, DIST RICT NAGAUR, RAJASTHAN. THESE PAYMENTS ARE MADE THROUGH CHEQUES. THE ASSES SEE USES THE OIL AND DIESEL FOR RUNNING ITS MACHINERY LIKE TATA, HITACHI, DUMPE R TRACTOR, JCB ETC. FOR THE MINES. DURING THE YEAR THE ASSESSEE HAS PURCHASED DIESEL/OIL WORTH RS.75,67,377/-. OUT OF THIS AMOUNT, THE ASSESSEE HAS RECOVERED A SU M OF RS.20,31,172/- FROM VARIOUS PARTIES. THE ASSESSEE HAS ALSO PURCHASED O IL FOR RS.15,439/-. ALL THESE PURCHASES ARE MADE THROUGH BILLS AND PAYMENTS WERE MADE THROUGH CHEQUES. THE ASSESSEE HAS MAINTAINED STOCK REGISTER AND DIESEL C ONSUMPTION ON DAY TO DAY BASIS AT MINES ITSELF. THEREFORE, WE DO NOT FIND ANY BAS IS FOR MAKING THE HUGE ADDITION OF RS.20,00,000/- ON ACCOUNT OF DIESEL EXPENSES AND WE DO NOT FIND ANY REASON TO INTERFERE IN THE IMPUGNED DELETION. WE, THEREFORE, DISMISS GROUND NO.1 OF THIS APPEAL. 7. THE SECOND GROUND OF THIS APPEAL PERTAINS TO DEL ETION OF ADDITION OF RS.6,25,000/- MADE ON ACCOUNT OF EXPENSES INCURRED ON TRUCK BODY BUILDING. THE A.O. TREATED THIS AS CAPITAL EXPENDITURE ONLY BY SE EING THE HUGE AMOUNT INVOLVED. HOWEVER, THE NARRATION MADE IN THE BILLS OF THE BOD Y-BUILDERS CLEARLY EXHIBITS THAT 5 ITA NO.284/JODH/2013 A.Y. 2009-10 THE ENTIRE EXPENSE PERTAINS TO REPAIRS OF THE VEHIC LES. THERE IS NO DISPUTE ABOUT THE STATEMENTS OF FACTS. SINCE THE ASSESSEE HAS PROVED THAT THIS EXPENDITURE PERTAINS TO ONLY REPAIR WORK AND THE ENTIRE REPAIR WORK HAS TO BE TREATED AS REVENUE EXPENDITURE ONLY. THE AMOUNT OF EXPENDITURE CANNOT DEFINE ITS NATURE BUT ONLY NATURE OF EXPENDITURE DEFINES SO. WE DO NOT FIND A NY EVIDENCE ON RECORD TO SHOW THAT THIS EXPENDITURE IS CAPITAL EXPENDITURE. ACCO RDINGLY, WE DO NOT FIND ANY MERIT IN THE SECOND GROUND OF APPEAL OF REVENUE AND THUS THE SAME IS DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 09.12.2013) SD/- SD/- (N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 9 TH DECEMBER, 2013 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, JODHPUR BENCH, JODHPUR 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, JODHPUR