Saurashtra Industrial Development Corporation, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-5(2), RAJKOT-GUJARAT

ITA 345/RJT/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8574 (ITAT-RAJKOT)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 03-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: DM RINDANI
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: RAJKOT BENCH, RAJKOT (BEFOR E SHRI ANIL CHATURVEDI , A.M. & SHRI KUL BHARAT, J.M. ) I. T. A. N 345 / RJT / 20 1 4 (A SSESSMENT YEAR: 2009 - 10) SAURASHTRA INDUSTRIAL DEVELOPMENT CORPORATION AJMERA HOUSE, MILL PARA, KANTA STRI VIKAS GRUH ROAD, RAJKOT V/S THE I.T.O., WARD 5(2), RAJKO T (APPELLANT) (RESPONDENT) PAN: AALFS 3890H APPELLANT BY : SHRI D.M. RINDANI, C.A. RESPONDENT BY : SHRI AVINASH KUMAR, D.R. ( )/ ORDER DATE OF HEARING : 3 - 12 - 2014 DATE OF PRONOUNCEM ENT : 05 - 12 - 2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) - I V , RAJKOT, DATED 28.04.2014 FOR A.Y. 2009 - 10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSE SSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF CONSTRUCTION ACTIVITIES, DEVELOP ERS, CONTRACTORS AND BUILDERS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 09 - 10 ON 24.08 .200 9 DE CLARING TOTAL INCOME OF RS. 35,340 / - . THE CASE WAS SEL ECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS ITA NO 345/RJT/2014 . A.Y. 20 09 - 10 2 FRAMED UNDER S ECTION 143(3) VIDE ORDER DATED 9.11.2011 AND THE TOTAL INCOME WAS DETERMINED AT RS. 4,98,024 / - . AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A) , WHO VIDE ORDER DA TED 28 . 04.2014 DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A) ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS ; - 1. THE LD. CIT(A) - IV, RAJKOT HAS ERRED IN UP HELD THE ORDER OF THE ASSESSING OFFICER TO DISALLOWING OF RS. 26,686/ - OUT OF ELECTRICITY EXPENSES IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 2. THE LD. CIT(A) - IV, RAJKOT HAS ERRED IN UP HELD THE ORDER OF THE ASSESSING OFFICER TO DISALLOWING OF RS. 34,000/ - OUT OF AUDIT FEES EXPENSES IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 3. THE LD. CIT(A) - IV, RAJKOT HAS ERRED IN UP HELD THE ORDER OF THE ASSESSING OFFICER TO DISALLOWING OF RS. 3,90,135/ - OUT OF TEMPLE EXPENSES IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 1 ST GROUND IS WITH RESPECT TO D ISALLOWANCE OF ELECTRICITY EXPENSES. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NOTICED THAT ASSESSEE HAS CLAIMED ELECTRICITY EXPENSES OF RS. 63,848/ - WHICH WAS STATED TO HAVE BEEN PAID TO HOTEL KING PALACE. ON VERIFICATION OF THE EXPENSE RECEIPTS , A.O NOTICED THAT THE RECEIPTS WERE NOT IN THE NAME OF THE ASSESSEE AND THE NAME OF THE ASSESSEE WAS WRITTEN BY HAND ON MOST OF THE VOUCHERS. THE ASSESSEE WAS ASKED TO JUSTIFY THE EXPENDITURE TO WHICH ASSESSEE INTERALIA SUBMITTED THAT IT WAS OPERATING FROM HOTEL KING PALACE AND THE PREMISES WAS NOT OWNED BY IT . THE SUBMISSIONS OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O. HE THEREAFTER DISALLOWED RS. 26,686 AND ADDED TO THE INCOME. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE C IT(A) WHO UPHELD THE ORDER OF A.O. 5. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, LD. A.R. SUBMITTED THAT ASSESSEE WAS OPERATING FROM THE PREMISES OF HOTEL KING PALACE AND THEREFORE THE BILLS WERE IN THE NAME OF HOTEL KING PALACE. HE FURTHER SUBMITTED THAT THE INCURRING OF EXPENSES HAS NOT BEEN DOUBTED BY THE A.O AND THEREFORE THE ADDITION NEEDS TO BE DELETED. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O. ITA NO 345/RJT/2014 . A.Y. 20 09 - 10 3 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT A.O HAS DISALLOW ED THE ELECTRICITY EXPENSES FOR THE REASON THAT THE BILLS WERE NOT IN THE NAME OF THE ASSESSEE . BEFORE US, LD. A.R. HAS VERBALLY SUBMITTED THAT ASSESSEE WAS OP ERATING FROM HOTEL KING PALACE BUT IN ITS SUPPO RT NO EVIDENCE HAS BEEN PLACED ON RECORD WE FIND THAT CIT(A) WHILE UPHOLDING THE DISALLOWANCE HAS ALSO NOTED THAT ASSESSEE HAD FAILED TO FURNISH ANY COGENT EVIDENCE BEFORE HIM. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER O F CIT(A) AND THUS THIS GROUND OF ASSESSEE IS DISMISSED. 2 ND GROUND IS WITH RESPECT TO DISALLOWANCE OF EXPENSES OF AUDIT FEES. 8. DURING THE COURSE OF ASSESSMENT PROCEEDING, A.O NOTICED THAT ASSESSEE HAD CLAIMED EXPENSES OF RS. 79,000/ - PAID TO FINAVA & CO . TOWARDS AUDIT FEES. IT WAS ALSO NOTICED BY THE A.O THAT THE RECEIPTS WERE OVER WRITTEN AND THEREAFTER NAME OF THE ASSESSEE WAS WRITTEN ON IT BY HAND . IN THE ABSENCE OF ANY PROPER EXPLANATION OF THE ASSESSEE, A.O DISALLOWED 25,000/ - OF THE EXPENSES. AGGRIE VED BY THE ORD ER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO CONFIRMED THE ORDER OF A.O. 9. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 10. BEFORE US, LD. A.R. POINTED TO THE COPIES OF THE BILLS PLACED AT PAGE 24 TO 26 OF THE PAPER BOOK AND THE COPY O F THE LEDGER ACCOUNT. HE FURTHER SUBMITTED THAT THE GENUINENESS OF THE EXPENSES HAS NOT BEEN DOUBTED AND EXPENSES HAVE BEEN INCURRED DURING THE COURSE OF BUSINESS. HE THEREFORE SUBMITTED THAT THE EXPENDITURE BE ALLOWED. LD. D.R . ON THE OTHER HAND SUPPORTED THE ORDER OF A.O AND CIT(A). 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. FROM THE COPIES OF THE BILLS OF FINAVA AND CO. PLACED ON RECORD IT IS SEEN THAT THE BILLS ITA NO 345/RJT/2014 . A.Y. 20 09 - 10 4 PERTAIN TO CONSULTANCY FOR THE FI NANCIAL YEAR ENDED 31.03.2006 AND THE TAX AUDIT FOR THE YEAR 06 - 07. BEFORE US NO MATERIAL HAS BEEN PLACED ON RECORD BY THE ASSESSEE TO DEMONSTRATE THAT THOUGH THE BILLS PERTAINED TO EARLIER YEARS BUT THE LIABILITY OF EXPENSES CRYSTALLIZED DURING THE YEAR. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF A.O AND CIT(A) AND THUS THIS GROUND OF ASSESSEE IS DISMISSED. 3 RD GROUND IS WITH RESPECT TO DISALLOWANCE OF TEMPLE EXPENSES. 12. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A .O NOTICED THAT ASSESSEE HAS CLAIMED TEMPLE EX PENSES OF RS. 4,05,135/ - ON ACCOUNT OF PAYMENT OF PUJARI AND OTHER RELATED WORK. ASSESSEE WAS ASKED TO JUSTIFY ITS CLAIM OF EXPENSE TO WHICH ASSESSEE INTERALIA SUBMITTED THAT ASSESSEE HAD GIVEN THE PROMISE TO THE PURCHASERS , THAT ONE TEMPLE WILL BE CONSTRUCTED FOR ALL THE SOCIETY MEMBERS. HE THEREFORE SUBMITTED THAT THE EXPENDITURE WAS A BUSINESS EXPEND ITURE AND THEREFORE THE SAME BE ALLOWED. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O FO R THE REASON THAT THE TEMPLE WAS ALREADY CONSTRUCTED DURING THE F.Y.06 - 07 & 2007 - 08 AND THE EXPENSES OF RS. 37 LACS WAS CLAIMED BY THE ASSESSEE AND FU RTHER THE ENTIRE CONSTRUCTED PROJECT WAS SOLD DURING F.Y. 07 - 08. A.O ALSO NOTED THAT THERE WAS NO PROMISE BY THE ASSESSEE TO MANAGE THE TEMPLE. HE THEREFORE DISALLOWED THE EXPENSES. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIE D THE MATTER BEFORE CIT(A) WHO UPHELD THE DISALLOWANCE. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. BEFOR E US LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O AND CIT(A). 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DISALLOWING THE EXPENSES NOTED T HAT ASSESSEE HAD FILED ONLY THE COPY OF LEDGER ACCOUNT WITHOUT SUPPORTING EVIDENCES. BEFORE US NO MATERIAL HAS BEEN PLACED ON RECORD BY ASSESSEE T O CONTROVERT THE FINDINGS OF A.O ITA NO 345/RJT/2014 . A.Y. 20 09 - 10 5 OR CIT(A). IN VIEW OF THESE FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A). AND THUS THIS GROUND OF ASSESSEE IS DISMISSED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 05 - 12 - 201 4 . SD/ - SD/ - (KUL BHARAT ) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT . TRUE CO PY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT