A.C.I.T., Circle-3(1), Gwalior V. M/s Sarthi Construtions, Gwalior

ITA 294/AGR/2013

• Counselvise Citation: 29420314 RSA 2013
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 06-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ATHESHAM ANSARI
• Assessee Lawyers: RAJENDRA SHARMA
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO. 294/AGRA/ 2013 ASSESSMENT YEAR: 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S. SARTHI CONSTRUCTIONS, CIRCLE-3(1), GWALIOR. 369, JIWAJI NAGAR, THATIPUR, GWALIOR. (PAN ABHFS 6828 A) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ATHESHAM ANSARI, JR. D.R. RESPONDENT BY : SHRI RAJENDRA SHARMA, ADVOCATE DATE OF HEARING : 05.02.2014 DATE OF PRONOUNCEMENT : 14.02.2014 ORDER PER PRAMOD KUMAR, ACCOUNTANT MEMBER: 1. BY WAY OF THIS APPEAL, THE A.O. HAS CHALLENGED C ORRECTNESS OF ORDER DATED 08.05.2013 PASSED BY THE LD. CIT(A), GWALIOR IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE A.Y. 2009-10. 2. THE GRIEVANCES RAISED BY THE A.O. ARE AS UNDER : - (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE TO RS.3,00,000/- ONLY OUT OF TOTAL DISALLOWANCE OF RS.14,19,116/- MADE BY THE AO AGAINST THE TOTAL EXPENSES DEBITED IN P&L ACCOUNT BY THE AS SESSEE AT RS.4,80,54,311/- WHICH WORKS OUT TO 2.95%. ITA NO.294 /AGRA/2013 A.Y. 2009-10 2 (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER OF LD. CIT(A) MAY BE SET ASIDE AND THE ORDER OF THE AO BE RESTORED. 3. BRIEFLY, THE RELEVANT MATERIAL FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONTRACTOR. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. NOTED THAT WHILE THE ASSESSEE HAS CLAIMED EXPENSES OF RS.2,02,53,361/- UNDER THE HEAD MATERIAL PURCHASE, THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUNT ALONG WITH LEDGERS, BILLS AND VOUC HERS. HOWEVER, ON EXAMINATION IT WAS OBSERVED THAT CERTAIN BILLS WERE MISSING AN D VOUCHERS WERE NOT PROPERLY MAINTAINED. IT WAS FOR THIS REASON THE A.O. DISAL LOWED RS.5,00,000/- OUT OF THE EXPENSES. SIMILARLY AS REGARDS OTHER EXPENSES OF R S.41,91,169/- DEBITED TO THE P&L ACCOUNT, THE A.O. WAS OF THE VIEW THAT EVEN THO UGH THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUNT ALONG WITH LEDGERS, BILLS, VOUCHES ETC, CERTAIN BILLS WERE MISSING AND VOUCHERS WERE NOT PROPERLY MAINTAINED. ACCORD INGLY, HE DISALLOWED 10% OF EXPENSES AMOUNTING TO RS.4,19,116/- OUT OF THIS EXP ENDITURE AS WELL. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFOR E THE CIT(A). THE CIT(A) AFTER EXTENSIVELY REPRODUCING THE WRITTEN SUBMISSIO N MADE BY THE ASSESSEE RESTRICTED THE DISALLOWANCE TO RS.3,00,000/- BY, IN TER ALIA, OBSERVING AS FOLLOWS:- I HAVE GONE THROUGH THE ASSESSMENT ORDER AND WRITT EN SUBMISSION. THE DISALLOWANCE OUT OF MATERIAL PURCH ASE EXPENSES, LABOUR & WAGES AND OTHER VARIOUS EXPENSES DEBITED I N THE P&L ACCOUNT HAS BEEN MADE MAINLY ON THE GROUND THAT CER TAIN VOUCHERS OF EXPENSES WERE NOT COMPLETE AND SOME VOUCHERS WERE N OT PROPERLY ITA NO.294 /AGRA/2013 A.Y. 2009-10 3 MAINTAINED. IN VIEW OF THESE FACTS, I AM OF THE CO NSIDERED OPINION THAT SOME DISALLOWANCE OUT OF THE ABOVE EXPENSES WAS REQ UIRED TO BE MADE BY THE AO. HOWEVER, THE DISALLOWANCE MADE BY THE A .O. APPEARS TO BE ON HIGHER SIDE. I AM OF THE CONSIDERED VIEW THA T IT WOULD BE FAIR AND REASONABLE IF THE TOTAL DISALLOWANCE OUT OF ABO VE EXPENSES IS RESTRICTED TO RS.3 LACS. ACCORDINGLY, THE DISALLOW ANCE IS RESTRICTED TO RS.3 LACS. THE ASSESSEE GETS RELIEF OF RS.11,19,11 6/- (5,00,000+5,00,000+4,19,116-3,00,000). 5. THE A.O. IS AGGRIEVE AND IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED POSITION THAT THE ASSESSEE HAD PRODUCED LEDGER, BILLS & VOUCHERS AND SUPPORTING EVIDENCE FOR VERIFICATION BY THE A.O. BU T THE A.O. HAS MADE THE DISALLOWANCE BY MAKING VAGUE OBSERVATION WITHOUT AN Y COGENT REASONS. THE A.O. HAS STATED THAT CERTAIN BILLS WERE MISSING BUT HE H AS NOT LISTED OUT THE BILLS WHICH WERE NOT AVAILABLE. SIMILARLY, HIS OBSERVATION THA T VOUCHERS WERE NOT PROPERLY MAINTAINED IS MEANINGLESS IN THE ABSENCE OF POINTI NG OUT SPECIFIC DEFECT IN MAINTAINING THE VOUCHERS. THE IMPUGNED DISALLOWANC ES WERE NOT MADE ON THE BASIS OF COGENT REASONS AND SPECIFIC DEFECTS IN THE SUPPORTING EVIDENCE WHICH HAVE BEEN PRODUCED BEFORE THE A.O. IN VIEW OF THESE DIS CUSSIONS AND BEARING IN MIND THE FACT THAT THE CIT(A) HAS ANY WAY CONFIRMED THE DISALLOWANCE TO THE EXTENT OF RS.3,00,000/- AGAINST WHICH THE ASSESSEE IS NOT IN APPEAL, WE ARE OF THE CONSIDERED VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE MATT ER. THE RELIEF GRANTED BY THE ITA NO.294 /AGRA/2013 A.Y. 2009-10 4 CIT(A) IS CONFIRMED AND UPHELD. THE CONCLUSION ARR IVED BY THE CIT(A) IS SUSTAINED. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 14.02.2014) SD/- SD/- (BHAVNESH SAINI) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 14.02.2014 PBN/* COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY