IRBAZ SHOE COMPANY, CHENNAI V. ITO NCW 10(2), CHENNAI

ITA 3040/CHNY/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2675 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 07-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T VASUDEVAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , , $ BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 3040/CHNY/2018 / ASSESSMENT YEAR : 2009-10 M/S. IRBAZ SHOE COMPANY, NO. 2(487), KILPAUK GARDEN ROAD, CHENNAI 600 010. [PAN: AAAFI 5586M] VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD 10(2), CHENNAI. ( / APPELLANT) ( %&' /RESPONDENT ) ' ( / APPELLANT BY : SHRI. T. VASUDEVAN, ADVOCATE %&' ( / RESPONDENT BY : SHRI. AR V SREENIVASAN, JCIT ( /DATE OF HEARING : 18.12.2019 ( /DATE OF PRONOUNCEMENT : 09.03.2020 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNAI IN ITA NO. 75/CIT( A)-12/13-14 DATED 20.08.2018 FOR ASSESSMENT YEAR 2009-10. 2. THE LD. AR SUBMITTED THERE IS 12 DAYS DELAY IN F ILING THE APPEAL. THE PARTNERS OF THE FIRM WERE AWAY FROM THE STATION AND HENCE, THE :-2-: ITA NO. 3040/CHNY/2018 APPEAL PAPERS COULD NOT BE SIGNED. AS SOON AS THEY CAME, THE APPEAL PAPERS WERE SIGNED AND FILED. SINCE, THE DELAY IS NEITHER WILFUL NOR WANTON, DUE TO THE CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE IT WAS PLEADED THAT THE DELAY IN FILING THE APPEAL MAY BE CONDONED. 3. WE HEARD THE RIVAL PARTIES AND CONDONE THE DELAY . 4. M/S. IRBAZ SHOE COMPANY, THE ASSESSEE, IS A MANU FACTURER AND EXPORTER OF SHOE UPPERS ETC. WHILE MAKING THE ASSE SSMENT FOR ASSESSMENT YEAR 2009-10, THE ASSESSING OFFICER FOUN D THAT THE ASSESSEE HAS INCURRED EXPENDITURE UNDER THE HEAD CAR MAINTEN ANCE/GENERAL EXPENSES AND POSTAGE. HE REQUIRED THE ASSESSEE TO PRODUCE VOUCHERS AND BILLS IN SUPPORT OF SUCH EXPENDITURE AND OBSERV ED THAT IN SOME CASES EITHER THE BILLS/VOUCHERS ARE NOT PRODUCED OR THE B ILLS/VOUCHERS PRODUCED WERE FOUND TO BE SELF-MADE. THEREFORE, HE DISALLOW ED RS. 2,49,000/- AND COMPLETED THE ASSESSMENT. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL . AGGRIEVED AGAINST THAT ORDER THE ASSESSEE FILED THIS APPEAL. 5. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS INCU RRED THE IMPUGNED EXPENDITURE FOR THE PURPOSE OF BUSINESS AN D HE SUPPORTED THAT SUCH EXPENDITURES ARE WHOLLY AND EXCLUSIVELY INCURR ED FOR THE PURPOSES :-3-: ITA NO. 3040/CHNY/2018 BY COMPARING THE CORRESPONDING FIGURES OF ASSESSMEN T YEARS 2008-09, 2009-10 & 2010-11. HE SUBMITTED THAT WITHOUT POINT ING OUT THE SPECIFIC DEFECTS VIS-A-VIS THE BILLS/VOUCHERS, THE ASSESSING OFFICER DISALLOWED THE EXPENDITURE ON SURMISES. ON SIMILAR ISSUE, THIS TR IBUNAL HAS ALREADY ALLOWED THE ASSESSEES APPEAL IN THE ASSESSMENT YEA R 2010-11, IN ITA NO. 1435/MDS/2015 DATED 12.02.2016. THEREFORE, HE PLEADED THAT THE ASSESSEES APPEAL MAY BE ALLOWED. PER CONTRA, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT PRODUCED THE BILLS/VOUCHERS BE FORE THE APPELLATE AUTHORITY AND HENCE, HE SUPPORTED THE ORDER OF THE LD. CIT(A). 6. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. WE FIND THAT THE ASSESSING OFFICER HAS N OT SPECIFICALLY POINTED OUT WHICH OF THE BILLS/VOUCHERS ON WHICH HE WAS UNS ATISFIED AND FOR WHAT REASONS. FURTHER, THE RELEVANT PORTION OF THIS TRI BUNAL ORDER, SUPRA, RELIED ON BY THE ASSESSEE IS EXTRACTED AS UNDER: GROUND NO.2:- ADDITION OF `1,90,080/- BEING DISALLO WANCE OF VEHICLE MAINTENANCE EXPENSES ON ESTIMATE BASIS:- ASSESSING OFFICER 9. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT W AS OBSERVED BY THE LEARNED ASSESSING OFFICER THAT THE ASSESSEE HAD DEBIT ED ITS PROFIT AND LOSS ACCOUNT ON ACCOUNT OF VEHICLE MAINTENANCE OF RS. 38,0 1,617/- . SINCE CERTAIN VEHICLES ON WHICH SUCH EXPENDITURE INCURRED WERE NO T OWNED BY THE ASSESSEE, THE LEARNED ASSESSING OFFICER OPINED THAT T HE EXPENDITURE CLAIMED BY THE ASSESSEE WAS ON THE HIGHER SIDE AND THEREFOR E DISALLOWED 5% OF THE SAME. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESSING OFFICER A CCEPTING HIS VIEW. 10. WE DO NOT FIND ANY MERIT IN THIS ADDITION MADE B Y THE REVENUE ON THE BASIS OF SURMISES AND CONJECTURES. ANY EXPENDITURE INCURRED TOWARDS THE :-4-: ITA NO. 3040/CHNY/2018 BUSINESS OF THE ASSESSEE IS ALLOWABLE AS DEDUCTION A S PER PROVISIONS OF THE ACT, UNLESS IT IS PROVED THAT THOSE EXPENSES WERE N OT INCURRED FOR THE BUSINESS OF THE ASSESSEE. THEREFORE, WE HEREBY DELET E THE ADDITION OF RS.1,90,080/-MADE BY THE LEARNED ASSESSING OFFICER ON THE BASICS OF PRESUMPTION THAT THE EXPENDITURE INCURRED BY THE AS SESSEE IS EXCESSIVE, WHICH WAS FURTHER SUSTAINED BY THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS). IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, FOLLO WING THE ABOVE ORDER, THE DISALLOWANCE MADE ON THE BASIS OF SURMISES AND CONJECTURES OF THE AO CANNOT BE SUSTAINED. THEREFORE, THE ASSESSEES APPEAL IS ALLOWED. 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON MONDAY, 09 TH MARCH, 2020 AT CHENNAI. SD/- ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ! /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 09 TH MARCH, 2020 JPV (%2343 /COPY TO: 1. ' / APPELLANT 2. %&' /RESPONDENT 3. 5 ) ( /CIT(A) 4. 5 /CIT 5. 3% /DR 6. /GF