GAGAN INTERNATIONAL, MUMBAI V. ITO 23(1)(2), MUMBAI

ITA 3255/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2946 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 26-05-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 07-05-2014
• Court: TRIBUNAL
• Department Lawyers: K RAVIKIRAN
• Assessee Lawyers: D C JAIN
• Keywords: Depreciation; Corroborative evidences; Condonation of delay
• Section: 147; 144

Judgement Text

, , G , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.3255/MUM/2014 ASSESSMENT YEAR: 2004-05 GAGAN INTERNATIONAL UNIT NO.16, SARDAR PRATAP SINGH INDUSTRIAL ESTATE, LBS MARG, BHANDUP (W) MUMBAI-400078 / VS. ITO 23(1)(2) C-10 PRATHYAKSHKAR BHAVAN, BKC MUMBAI-400051 ( ASSESSEE ) (REVENUE) P.A. NO. AAAFG0745N APPELLANT BY SHRI D. C. JAIN (A R) RESPONDENT BY SHRI K. RAVI KIRAN (D R) / DATE OF HEARING: 26/05/2016 / DATE OF ORDER: 24/06/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI- 36 {(IN SHORT CIT(A)}, DATED 04.09.2013 PASSED AG AINST ASSESSMENT ORDER U/S 144 R.W.S. 147 DATED 31.07.200 7 FOR THE ASSESSMENT YEAR 2004-05 ON THE FOLLOWING GROUNDS: GAGAN INTERNATIONAL 2 1. DISALLOWANCE OF PURCHASES OF RS. 9,42,532/- I. THE COMMISSIONER OF INCOME-TAX (APPEALS) -36 ERRED IN CONFIRMING THE DISALLOWANCE OF PURCHASE OF RS. 9,42 ,532, WITHOUT CONSIDERING THE DETAILS OF PURCHASES MADE B Y THE APPELLANT; II) THE SAID CIT (A) ERRED IN OBSERVING THAT SUFFICIENT EVIDENCE TO PROVE THOSE PURCHASES WERE NOT PROVIDED BY THE APPELLANT. III) THE APPELLANT SUBMITS THAT COMPLETE DETAILS OF PURCHASE WERE SUBMITTED BEFORE THE A 0 AND SAID CIT (A)-36, FOR THE PURCHASES AND, THEREFORE, DEDUCTION OF RS.9,42,532/= BEING THE PURCHASES MADE FROM THE CUSTOMERS OUGHT TO HAVE BEEN ALLOWED WHILE COMPUTIN G THE TOTAL INCOME OF THE APPELLANT. 2. ADDITION OF RS. 1,50,000/- AS PROFESSIONAL/TECHNICAL FEES IN TOTAL INCOME: I. THE COMMISSIONER OF INCOME-TAX (APPEALS) -36 ERR ED IN CONFIRMING THE ADDITION OF RS. 150,000/- AS PROFESS IONAL FEES WHILE COMPUTING THE TOTAL INCOME OF THE APPELL ANT. II. THE SAID CIT (A) ERRED IN OBSERVING THAT SUFFIC IENT EVIDENCE TO PROVE THAT THESE ITEMS WERE INCLUDED IN THE SALES TURNOVER OF THE APPELLANT. III.THE APPELLANT SUBMITS THAT THE ADDITION OF RS. 1,50,000/- WILL AMOUNT TO TAXING OF AN ITEM FOR TWO TIMES AND THEREFORE DELETION OF RS. I 50,000/ OUGHT TO HA VE BEEN MADE BY THE SAID CIT(A) - 36. 3. DISALLOWANCE OF EXPENSED OF RS. 1,99,130/- I. THE COMMISSIONER OF INCOME-TAX (APPEALS) -36 ERR ED IN CONFIRMING THE DISALLOWANCE OF RS.1,99, 1 30 @ 20% OF CERTAIN EXPENSES. II. THE SAID CIT (A) - 36 ERRED IN OBSERVING THAT S UFFICIENT EVIDENCE TO PROVE THAT THESE EXPENSES WERE SUBMITTE D BEFORE THE CIT(A) -36 II. THE APPELLANT SUBMITS THAT THE DISALLOWANCE OF RS.1,99.130 OUGHT TO HAVE BEEN DELETED, SINCE ALL T HE DETAILS OF EXPENSES WERE SUBMITTED DURING THE COURS E OF HEARING. 4. DISALLOWANCE OF DEPRECIATION OF RS. 59,800/= I. THE CIT(A)- 36 ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION ON THE ADDITION OF FIXED ASSETS MADE D URING THE YEAR UNDER ASSESSMENT; GAGAN INTERNATIONAL 3 II.THE APPELLANT SUBMITS THAT THE DISALLOWANCE OF R S. 59,8001= OUGHT TO HAVE BEEN DELETED. DISALLOWANCE OF VEHICLE EXPESNES OF RS. 59,186/- I. THE CIT(A)- 36 ERRED IN CONFIRMING THE DISALLOWANCE OF VEHICLE EXPENSES OF RS. 59,186/- ON THE ADDITION OF FIXED ASSETS MADE DURING THE YEAR UNDER ASSESSMENT II. THE SAID CIT (A) ERRED IN OBSERVING THAT SUFFICIENT EVIDENCE TO PROVE THE EXPENSES ON ACCOUNT OF VEHICL E EXPENSES WAS NOT PROVIDED BY THE APPELLANT. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI D. C. JAIN, (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI K. RAVI KIRAN, DEPARTMENTAL REPRESENTATIVE (LD. DR) ON BEHALF OF THE REVENUE. 3 . DURING THE COURSE OF HEARING, LD. COUNSEL FILED A PETITION FOR CONDONATION OF DELAY DATED 25.05.2016 ALONG WI TH AN AFFIDAVIT DEPENDING THE FACTS ON OATH WHICH LED TO DELAY IN FILING OF THE APPEAL, DULY SIGNED AND VERIFIED BY M RS. BALBIR KAUR KAUSHAL ONE OF THE PARTNER OF THE ASSESSEE FI RM. THE LD. COUNSEL MADE ARGUMENTS, ON THE BASIS OF THIS PETITI ON AND THE AFFIDAVIT, THAT THERE WERE REASONS BEYOND THE CONTR OL OF THE ASSESSEE DUE TO WHICH DELAY OF 165 DAYS OCCURRED IN THE FILING OF THE APPEAL BEFORE THE TRIBUNAL. 3.1. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AND F IND IT APPROPRIATE TO REPRODUCE THE AFFIDAVIT OF MRS. BALB IR KAUR KAUSHAL: 1. THAT I AM A PARTNER IN THE APPELLANT FIRM GAGAN INTERNATIONAL, ALONG WITH MR. MANVIR SINGH KAUSHAL. GAGAN INTERNATIONAL 4 2. THAT I HAVE PREFERRED AN APPEAL BEFORE YOUR HONO UR AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-36 MUMBAI; 3. THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-36 WAS SERVED ON THE APPELLANT ON 29 TH AUGUST, 2013 ON THE FOLLOWING ADDRESS; GALA NO.16, SARDAR PRATAP SINGH INDUSTRIAL ESTATE, L.B.S. MARG, BHANDUP (W), MUMBAI-400078. 4. THAT HOWEVER, THE SAID ORDER WAS NOT MADE AVAILA BLE TO ME BY THE OTHER PARTNER MR. MANVIER SIGH KAUSHAL, S INCE THERE WAS DISPUTE BETWEEN MR. MANVIR KINGH KAUSHAL AND MR. SURINDERPAL SINGH KAUSHAL (MY SPOUSE). 5. THAT MR. MANVIR SINGH KAUSHAL AND MR. SURINDERPA L SINGH KAUSAHL (BOTH ARE BROTHER) WERE CARRYING ON BUSINESS IN PARTNERSHIP UNDER THE FIRM VIZ. KAUSHAL EQUIPMENT MANUFACTURERS AND KAUSHAL INDUSTRIES. 6. THAT A DISPUTE ARISED BETWEEN THESE BROTHER AND HAS NOW REACHED TO SUCH A POSITION THAT BOTH THE BROTHE RS ARE NOT EVEN IN TAKING TERMS AND BOTH HAVE FILED CASES AGAINST EACH OTHER IN VARIOUS COURTS OF LAW. 7. THAT DUE THESE DIFFERENCE, THE STATE OF AFFAIRS OF THE APPELLANT FIR GAGAN INTERNATIONAL WAS TOTALLY NEGLE CTED AND THE ORDER OF THE CIT-(A)-36, WAS NOT MADE AVAIL ABLE TO ME. 8. THAT WHEN I RECEIVED THE ORDER OF THE CIT(A)-36, THE TIME LIMIT OF FILING THE APPEAL WITH YOUR HONOUR WAS ELA PSED. I IMMEDIATELY INSTRUCTED MY CHARTERED ACCOUNTANT TO F ILE AN APPEAL AGAINST THE SAID ORDER. 9. THAT I SUBMIT THAT THE DELAY IN FILING THE APPEA L PURELY DUE TO A CIRCUMSTANTIAL HAPPENING AND NOT A DELIBER ATE ATTEMPT, I HUMBLY PRAY YOUR HONOUR TO CONDONE THE D ELAY AND TAKE THE MATTER ON BOARD. 10. THAT I HOPE AND DO TRUST YOUR HONOUR WILL CONDO NE THE DELAY AND GIVE THE APPELLANT AND OPPORTUNITY TO REP RESENT THE CASE BEFORE YOUR HONOUR. 3.2. LD. COUNSEL RELIED UPON THESE DOCUMENTS FOR GRANT OF CONDONATION IN DELAY IN FILING OF THIS APPEAL. GAGAN INTERNATIONAL 5 3.3. PER CONTRA, LD. DR HAD NOTHING TO CONTROVERT THE F ACTS DISPOSED ON OATH BY THE PARTNER OF THE ASSESSEE FIR M. IT IS NOTED BY US THAT DUE TO FAMILY DISPUTES THERE WAS A DELAY IN FILING OF THIS APPEAL. IT IS FURTHER NOTED BY US TH AT EVEN IN THE COURSE OF ASSESSMENT PROCEEDINGS PROPER REPRESENTAT ION WERE NOT BEING MADE BECAUSE OF THE ONGOING DISPUTE OF TH E FAMILY OF THE PARTNERS. UNDER THESE CIRCUMSTANCES, IN ALL FAI RNESS AND TO MEET THE ENDS OF JUSTICE, WE GRANT THE CONDONATION IN DELAY OF FILING THE PRESENT APPEAL AND THE SAME IS HERBY ADM ITTED FOR ADJUDICATION ON MERITS. 4. GROUND NOS. 1 & 2: THESE GROUNDS DEAL WITH THE DISALLOWANCE OF PURCHASE OF RS. 9,42,532/- AND PROF ESSIONAL/ TECHNICAL FEE FOR RS.1,50,000/-. IT WAS SUBMITTED T HAT REQUISITE EVIDENCE TO SUBSTANTIATE THESE EXPENSES IN THE FORM OF BILLS AND OTHER EVIDENCES COULD NOT BE PRODUCED BEFORE TH E LOWER AUTHORITIES DUE TO THE FAMILY DISPUTES BETWEEN THE PARTNERS. THE LD. COUNSEL SUBMITTED BEFORE US A BUNCH OF THE EVIDENCES ALONG WITH PETITION FOR ADMISSION OF ADDITIONAL EVI DENCES AND REQUESTED FOR ONE MORE OPPORTUNITY BEFORE THE AO TO SUBSTANTIATE ITS CLAIM. 4.1. PER CONTRA, LD. DR FAIRLY SUBMITTED THAT IN VIEW O F PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE. THIS ISSUE MAY BE SENT BACK TO THE FILE OF THE AO FOR A FRESH ADJU DICATION. 4.2. IT IS NOTED BY US THAT ASSESSEE HAS SUBMITTED COPI ES OF BILLS AND OTHER SUPPORTING EVIDENCES TO SUBSTANTIAT E THE GAGAN INTERNATIONAL 6 AFORESAID EXPENSES. A CURSORY GLANCE UPON THESE BIL LS AND OTHER EVIDENCES SHOWS THAT THESE CANNOT BE IGNORED WITHOUT THEIR VERIFICATION. THEREFORE, WITH A VIEW TO MEET THE ENDS OF JUSTICE, WE SEND BOTH OF THESE ISSUES BACK TO THE F ILE OF THE AO WITH A DIRECTION TO GIVE ADEQUATE OPPORTUNITY OF HE ARING TO THE ASSESSEE TO FILE ALL THE DETAILS AND EVIDENCES AS M AY BE CONSIDERED APPROPRIATE BY THE ASSESSEE. THE AO SHAL L DECIDE THIS ISSUE AFRESH AFTER TAKING INTO ACCOUNT THE SAM E ON OBJECTIVE BASIS. THUS, WITH THESE DIRECTIONS, BOTH OF THESE ISSUES ARE SENT BACK TO THE FILE OF THE AO AND RESU LTANTLY GROUND NOS. 1 & 2 MAY BE TREATED AS ALLOWED FOR STA TISTICAL PURPOSES. 5. GROUND NO.3: IN THIS GROUND THE ASSESSEE HAS CHALLENGED AD-HOC DISALLOWANCE OF CERTAIN EXPENSES @ OF 20%. 5.1. DURING THE COURSE OF HEARING, LD. COUNSEL DREW OUR ATTENTION ON PAGE NOS. 30 TO 166 OF THE PAPER BOOK AND CONTENDED THAT REQUISITE DETAILS AND EVIDENCES WERE FILED BEFORE THE LOWER AUTHORITIES AND THERE WERE NO BASI S TO MAKE AN AD-HOC DISALLOWANCE AND THAT TOO @ OF 20%. 5.2. WE HAVE GONE THROUGH THE DETAILS AND EVIDENCES SHO WN BY THE LD. COUNSEL BEFORE US. IT IS NOTED THAT ON THIS ISSUE REQUISITE DETAILS AND EVIDENCES HAVE BEEN FURNISHED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. THERE WERE N O BASIS TO MAKE AN AD-HOC DISALLOWANCE AS PER LAW AND THEREFOR E, AD HOC DISALLOWANCE OF RS. 1,99130/- IS DIRECTED TO BE DEL ETED. GAGAN INTERNATIONAL 7 6. GROUND NOS. 4 & 5: THESE GROUNDS WERE NOT PRESSED BY THE LD. COUNSEL AND THEREFORE, THESE ARE DISMISSED. 7. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JUNE, 2016. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; # DATED : 24/06/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. % &' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. * * ( % ) / THE CIT, MUMBAI. 4. * * / CIT(A)- , MUMBAI 5. -. / (01 , * % 012 , / DR, ITAT, MUMBAI 6. / 34 5 / GUARD FILE. / BY ORDER, ) -% ( //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI