Mirza Md.Razi A.Beig, Surat V. The Income tax Officer,)OSD)-III,Range-2, Surat

ITA 2944/AHD/2009

• Counselvise Citation: 294420514 RSA 2009
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 29-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: K N BHATT

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. L. GEHL OT, AM) ITA NO.2944/AHD/2009 A. Y.: 2006-07 MIRZA MD. RAZI A. BEIG, 202-3, 2 ND FLOOR, FATEMA BUILDING, KAMELA DARWAJA, SALABATPURA, SURAT VS THE INCOME TAX OFFICER (OSD)-III, AAYAKAR BHAVAN, MAJURA GATE, SURAT PA NO. AAYPM 1147 Q (APPELLANT) (RESPONDENT) APPELLANT BY SHRI K. N. BHATT, AR RESPONDENT BY SHRI S. K. GUPTA, CIT DR DATE OF HEARING: 10-10-2011 DATE OF PRONOUNCEMENT: 14-10-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)- I I, SURAT DATED 25-08-2009, FOR ASSESSMENT YEAR 2006-07. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. 3. ON GROUND NO.1 OF THE APPEAL, THE ASSESSEE CHALL ENGED THE DISALLOWANCE OF RS.92,096/- OUT OF VEHICLE REPAIRS AND GODOWN REPAIRS EXPENSES. THE ASSESSEE HAS DEBITED REPAIRS OF VEHIC LE EXPENSES AND GODOWN MAINTENANCE EXPENSES IN A SUM OF RS.9,20,964 /-. THE AO NOTED THAT FOR 25% OF THE EXPENSES EITHER VOUCHERS WERE NOT ITA NO.2944/AHD/2009 MIRZA MD. RAZI A. BEIG VS THE ITO (OSD) III, SURA T 2 PRODUCED AND IF IT WAS THERE, IT WAS NOT POSSIBLE F ROM THE SAME TO MAKE OUT AS TO FOR WHAT FOR THE SAME HAS BEEN ISSUE D. THE ASSESSEE OFFERED FOR DISALLOWANCE OF EXPENSES @ 20%. THE AO ACCORDINGLY DISALLOWED RS.1,84,193/-. THE ASSESSEE SUBMITTED BE FORE THE LEARNED CIT(A) THAT ADDITION IS MADE ON ASSUMPTION AND ESTI MATE AND COMPLETE RECORDS WERE PRODUCED AND ALL THE PAYMENTS HAVE BEEN MADE THROUGH ACCOUNT PAYEE CHEQUES. THE LEARNED CIT (A) CONSIDERING THE EXPLANATION OF THE ASSESSEE RESTRIC TED THE ADDITION TO RS.92,096/-. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LE ARNED CIT(A). THE LEARNED CIT(A) ON PROPER APPRECIATION OF THE FACTS HAS ALREADY GRANTED SUFFICIENT RELIEF TO THE ASSESSEE. THE AO N OTED IN THE ASSESSMENT ORDER THAT FOR 25% OF THE EXPENSES, EITH ER VOUCHERS WERE NOT PRODUCED OR IF THE SAME WERE PRODUCED, IT WAS N OT POSSIBLE TO MAKE OUT AS TO FOR WHAT PURPOSES THE SAME HAVE BEEN ISSUED. THE ASSESSEE WAS ASKED TO EXPLAIN THE ISSUE AND SUBSTAN TIATE HIS STAND. THE ASSESSEE DID NOT FILE ANY PROPER EXPLANATION BE FORE THE AO AND ASSESSEES REPRESENTATIVE AGREED TO OFFER DISALLOWA NCE OF 20% OF THE EXPENDITURE. THE LEARNED CIT(A) HOWEVER REDUCED THE ADDITION AS AGAINST THE OFFER MADE BY THE ASSESSEES REPRESENTA TIVE BEFORE THE AO. IT IS SETTLED LAW THAT NO APPEAL LIES IF THE AD DITION IS MADE ON AGREED BASIS. WE RELY UPON THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF JIVATLAL PURTAPSHI VS CIT, 65 ITR 261 IN WHICH IT WAS HELD AS UNDER: ITA NO.2944/AHD/2009 MIRZA MD. RAZI A. BEIG VS THE ITO (OSD) III, SURA T 3 HELD, THAT THE DEPARTMENT, HAVING AGREED TO DELETE THE AMOUNT FROM THE ASSESSMENT AND HAVING CONCEDED THE DELETION BEFORE THE APPELLATE ASSISTAN T COMMISSIONER CANNOT BE HELD TO BE AGGRIEVED BY THIS PART OF THE ORDER TO ENABLE IT TO FILE AN APPEAL TO THE TRIBUNAL; THE APPEAL OF THE DEPARTMENT REGARDING TH E DELETION OF THE AMOUNT WAS NEITHER COMPETENT NOR CAPABLE OF BEING ENTERTAINED BY THE TRIBUNAL 4.1 THE HONBLE KERALA HIGH COURT IN THE CASE OF CI T VS VAMADEVAN BHANU, 330 ITR 559 HELD AS UNDER: HELD, ALLOWING THE APPEAL, THAT ASSESSMENT WAS MADE ON THE BASIS OF THE ASSESSEES AGREEMENT THAT INTEREST INCOME IN THE FINANCING BUSINESS COULD BE ADOPTED AT 27 PER CENT. AS AGAINST 20 PER CENT. BOR NE OUT BY THE ACCOUNTS. IN THE PRECEDING YEAR VIZ., FO R THE ASSESSMENT YEAR 1996-97, THE ASSESSEE AGREED FOR ASSESSMENT OF INTEREST INCOME IN THE FINANCING BUSINESS AT 27 PER CENT. AS AGAINST 20 PER CENT. TH E CHARTERED ACCOUNTANT HAD GIVEN THE COMMITMENT ON BEHALF OF THE ASSESSEE AGREEING FOR ASSESSMENT OF INTEREST INCOME AT 27 PER CENT. FOR BOTH THE ASSESSMENT YEARS 1997-98 AND 1998-99 SPECIFICALLY ON CONDITION THAT NO PENALTY PROCEEDINGS WOULD BE INITIATED UNDER SECTION 271 (1 ) ( C ). HENCE IT WA S NOT OPEN TO THE ASSESSEE TO APPEAL AGAINST ASSESSMENT ORDERS. 4.2 THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF BANTA SINGH KARTAR SINGH, 125 ITR 239 HELD AS UNDER: AN ORDER BASED ON AN AGREEMENT CANNOT GIVE RISE TO GRIEVANCES AND THE SAME CANNOT BE AGITATED IN APPEAL ITA NO.2944/AHD/2009 MIRZA MD. RAZI A. BEIG VS THE ITO (OSD) III, SURA T 4 SINCE THE LEARNED CIT(A) HAS ALREADY GRANTED RELIEF TO THE ASSESSEE AND THERE IS NO FURTHER DEPARTMENTAL APPEAL, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LE ARNED CIT(A). WE ACCORDINGLY, DISMISS GROUND NO.1 OF THE APPEAL OF T HE ASSESSEE. 5. ON GROUND NO.2 OF THE APPEAL, THE ASSESSEE CHAL LENGED THE DISALLOWANCE OF RS.4,09,365/- OUT OF VARIOUS EXPENS ES. THE AO LISTED SEVERAL EXPENSES IN PARA 5 OF THE ASSESSMENT ORDER WHICH HAVE BEEN DEBITED TO THE PROFIT & LOSS ACCOUNT AND NOTED THAT THE ASSESSEE HAS MADE CLAIM OF VARIOUS EXPENSES IN A SUM OF RS.40,93 ,651/-. THE AO OBSERVED THAT PERSONAL ELEMENT IN THESE EXPENSES CA NNOT BE RULED OUT. HE THEREFORE, TOOK THE VIEW THAT IT WAS NOT PO SSIBLE TO ACCEPT THAT ALL SUCH EXPENSES HAVE BEEN INCURRED WHOLLY AND EXC LUSIVELY FOR THE PURPOSE OF ASSESSEES BUSINESS, HE THEREFORE, DISAL LOWED 20% OF THE EXPENSES AND MADE ADDITION OF RS.8,18,730/-. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT NO PERSONAL ELEMENT IN THESE EXPENSES IS THERE EXCEPT FOR CAR MAINTENANCE EXPEN SES. CONVEYANCE ALLOWANCE, OUT OF STATION EXPENSES, STAF F WELFARE EXPENSES AND WAY EXPENSES WERE INCURRED FOR THE DRI VERS, CLEANERS AND OTHER STAFF. CERTAIN OTHER FESTIVAL EXPENSES WE RE INCURRED INCLUDING FEES AND TAXES PAID ON THE VEHICLE TO THE REGIONAL TRANSPORT AUTHORITY. THE LEARNED CIT(A) ON GOING TH ROUGH THE SAME NOTED THAT MOST OF THE EXPENSES WERE INCURRED ON DA Y TO DAY FOR RUNNING OF THE BUSINESS. THEREFORE, THE EXPENSES CL AIMED WERE QUITE REASONABLE. THE LEARNED CIT(A) HOWEVER, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE NOTED THAT IT WOULD MEET THE ENDS OF JUSTICE ITA NO.2944/AHD/2009 MIRZA MD. RAZI A. BEIG VS THE ITO (OSD) III, SURA T 5 IF DISALLOWANCE IS RESTRICTED TO 10% OUT OF EXPENSE S AND ACCORDINGLY DISALLOWED RS.4,09,365/- AND GRANTED PART RELIED TO THE ASSESSEE. 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LE ARNED CIT(A). THE AO HAS SPECIFICALLY NOTED IN THE ASSESSMENT ORDER THAT ASSESSEES REPRESENTATIVE AGREED FOR ADDITION @ 20% OF THE EXP ENSES AND SIGNED THE ORDER SHEET. IT WOULD, THEREFORE, INDICA TE THAT AT THE STAGE OF THE ASSESSMENT, THE ASSESSEE COULD NOT SATISFY T HE REQUIREMENTS OF THE AO AND COULD NOT PROVE THAT EXPENSES WERE IN CURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. SINCE, THE ASSESSEES REPRESENTATIVE AGREED FOR DISALLOWANCE OF 20% OF TH E EXPENSES, THEREFORE, IT WOULD PROVE THAT THE ASSESSEE HAS AGR EED FOR THE PROPOSED ADDITION MADE BY THE AO. NO MATERIAL IS PR ODUCED BEFORE US TO CONTRADICT THE FINDINGS OF THE AO RECORDED IN THE ASSESSMENT ORDER. IT IS WELL SETTLED LAW THAT NO APPEAL WOULD LIE IF THE ADDITIONS ARE MADE ON AGREED BASIS. DECISIONS OF VARIOUS HIGH COU RTS HAVE BEEN NOTED ABOVE ON GROUND NO.1 WHICH WOULD SUPPORT OUR VIEW THAT THE ASSESSEE IS NOT ENTITLED FOR FURTHER RELIEF IN THE MATTER. THE LEARNED CIT(A) HAS ALREADY REDUCED 20% DISALLOWANCE OF THE EXPENSES TO 10% AS AGAINST UNDERTAKING GIVEN BEFORE THE AO, THE REFORE, NO FURTHER REDUCTION IS REQUIRED IN THE MATTER. THERE IS NO DEPARTMENTAL APPEAL FILED IN THE MATTER. WE ACCORDINGLY, DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BEL OW. WE CONFIRM THE ADDITION AND DISMISS GROUND NO.2 OF THE APPEAL OF T HE ASSESSEE. ITA NO.2944/AHD/2009 MIRZA MD. RAZI A. BEIG VS THE ITO (OSD) III, SURA T 6 7. NO OTHER POINT IS ARGUED OR PRESSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT 14/10/2011 SD/- SD/- (A. L. GEHLOT) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- 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