Rajiv Amaram, Hyderabad, Hyderabad V. ITO, Ward-11(2), Hyderabad, Hyderabad

ITA 347/HYD/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2354 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 27-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Business expenditure; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 347/HYD/2017 ASSESSMENT YEAR: 2012-13 RAJIV AMARAM, HYDERABAD [PAN: AEWPA8939G] VS INCOME TAX OFFICER, WARD-11(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI K.J. RAO, DR DATE OF HEARING : 15-11-2017 DATE OF PRONOUNCEMENT : 29-11-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-5, HYDERABAD, DATED 28-12-2016, FOR THE AY. 2012-13. 2. THE GROUNDS RAISED BY ASSESSEE ARE AS UNDER: 1.THE LEARNED COMMISSIONER OF INCOME-TAX HAS ERRED IN SUPPORTING THE ASSESSING OFFICER WITHOUT LOOKING INTO THE MERITS A ND FACTS OF THE CASE. 2. THE ASSESSING OFFICER THROUGH OUT THE COURSE OF ASSESSMENT ONLY CONCENTRATED ON ONE ISSUE OR RENT PAID TO THE LAND LORD. HE HOWEVER PROCEEDED TO COMPLETE THE ASSESSMENT BY MAKING ADDI TIONS ON THE OTHER GROUNDS TOO WITHOUT PROVIDING ANY OPPORTUNITY. HOWE VER THE HON'BLE COMMISSIONER TOO WITHOUT UNDERSTANDING THE GENUINEN ESS OF BUSINESS EXPENDITURES AND PROCEEDED TO ENDORSE THE ASSESSMEN T OF THE ASSESSING OFFICER. I.T.A. NO. 347/HYD/2017 :- 2 - : 3. THE EXPENDITURE DISALLOWED BY THE HON'BLE COMMIS SIONER IS NOT CORRECT AS ALL OF THEM ARE CONNECTED TO THE NATURE OF THIS BUSINESS. 4. THE LEARNED COMMISSIONER HAS FAILED TO CONSIDER THE FACT OF RENT PAID TO THE LANDLORD BY CHEQUES, THE APPELLANT EVEN DEDUCTE D TAX ON THE RENT PAID AND ISSUED TAX DEDUCTION CERTIFICATE. FOR THE FOREGOING REASONS AND FOR THOSE THAT MAY BE EXTENDED AT THE TIME OF HEARING AND DOCUMENTS TO BE PRODUCED THE ADDITIO NS MADE TO THE ASSESSMENT MAY BE DELETED. 3. BRIEFLY STATED, ASSESSEE RUNS A PETROL BUNK IN THE N AME OF SHANKER JYOTHI SERVICE STATION. HE FILED RETURN OF INCO ME OF RS. 8,82,264/-. THE ASSESSING OFFICER (AO) DISALLOWED THE RENTS PAID, BATTA PAID, SALES PROMOTION EXPENDITURE AND SOME SALARY PAYMENTS. LD.CIT(A) HAS ALLOWED THE SALARY PAYMENTS A ND SALES PROMOTION PARTLY. ASSESSEE IS AGGRIEVED ON THE EXPEN DITURE OF RENT AND BATTA DISALLOWANCE IN THE APPEAL. 4. IT WAS THE CONTENTION THAT NEITHER THE AO NOR THE CIT(A) UNDERSTOOD THE BUSINESS OF ASSESSEE. THE IOCL HAS AGR EED TO PAY RENT OF RS. 8,000/-, BUT THE COMMERCIAL RENT, BEING P AID BY ASSESSEE THROUGH CHEQUE AND AFTER TDS, WAS NOT APPRE CIATED. IT WAS FURTHER SUBMITTED THAT ASSESSEE COULD NOT FURNISH THE RETURN OF INCOME OF THE OWNER OF LAND PROPERTY AT THAT TIME AN D FURNISHED THE EVIDENCE OF FILING RETURN ADMITTING INCOME AND CLAI MING TDS BY MS.CHANDRA KALA, AS ADDITIONAL EVIDENCE. WITH REFERENCE TO THE BATTA THAT IS BEING PAID TO DRIVER AT RS. 200/- PER TRIP F OR PROMPT DELIVERY, IT WAS STATED THAT THE SAME WAS CLAIMED IN E ARLIER YEAR ALSO. THE SAME WAS ALLOWED BY THE AO IN LATER YEAR ALSO AND PLACED THE ASSESSMENT ORDER FOR AY. 2013-14 ON RECORD . IT WAS THE CONTENTION THAT THE EXPENDITURES CLAIMED ARE GENUINE. I.T.A. NO. 347/HYD/2017 :- 3 - : 5. LD.DR, HOWEVER, RELIED ON THE ORDERS OF AO/CIT(A) . 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS. THE ORDER OF AO IN PAGE NO. 2 ABOUT RENT PAYMENT IS AS UNDER: C) THE ASSESSEE HAS CLAIMED RS. 4,35,600/- TOWARDS RENT WHICH WAS NOT SUPPORTED BY PROPER DOCUMENTS. WHEN THE A.R OF THE ASSESSEE WAS QUESTIONED ABOUT THE RENT PAYMENT TOWARDS THE P REMISES BY THE ASSESSEE, HE HAS NOT PRODUCED ANY PROPER EVIDENCE, EXCEPT PRODUCING COPY OF LEASE DEED (DOC.NO.11010/2003) ENTERED BY S MT. K. CHNDRA KELA, SHRI. K. MAHENDAR YADAV(LESSOR) AND SMT. P. ALANKRI TA(LESSEE) STATING THAT THE LEASE AMOUNT IS BEING PAID BY SMT. P. ALAN KRITA. IT CAN ALSO BE OBSERVED FROM THE SAID LEASE DEED THAT THE VALUE OF THE SAID PROPERTY IS RS.8,00,000/- ONLY, WHERE AS THE MONTHLY RENT SHOWN IS ABOUT 30,000/- OR APPROXIMATELY RS. 4,00,000/- PER ANNUM, WHICH IS HALF OF THE SAID VALUE OF THE PROPERTY, WHICH APPEARS UN-REALISTIC A ND UNREASONABLE. BUT ON RECEIPT OF CONFIRMATION DATED 20/03/2015 FROM TH E IOCL, IT IS ESTABLISHED THAT THE RENT IS BEING PAID BY NONE OTH ER THAN THE IOCL. ACCORDINGLY, AN AMOUNT OF RS. 4,35,600/- IS DISALLO WED AND ADDED TO INCOME RETURNED. 6.1. IT WAS FAIRLY ADMITTED THAT AO DID NOT GIVE ANY OP PORTUNITY TO ASSESSEE, AFTER THE LETTER FROM IOCL WAS RECEIVED. BE FORE THE LD.CIT(A), THE DETAILS OF RETURN OF INCOME OF OWNER C OULD NOT BE FURNISHED AS THEY PERTAIN TO A THIRD PARTY. HOWEVER, THE FACT IS THAT THE RENTS ARE PAID BY CHEQUE AND TDS WAS MADE. CONSID ERING THESE ASPECTS, I AM OF THE OPINION THAT THE ISSUE REQUIRE S RE- EXAMINATION BY AO AFTER GIVING DUE OPPORTUNITY TO ASS ESSEE TO FURNISH THE EVIDENCE AND AGREEMENTS ETC., IN SUPPORT OF THE CLAIM. 6.2. LIKE-WISE THE BATTA EXPENDITURE. ONLY VERIFICATION REQUIRED BY AO IS TO EXAMINE HOW MANY TANKERS OF PETROL AND DI ESEL WAS RECEIVED AND MUCH WAS CLAIMED TOWARDS BATTA, ALONG WITH ITS VOUCHERS OF PAYMENT. THE FACT THAT SIMILAR EXPENDITURE WAS CLAIMED AND ALLOWED IN EARLIER AND LATER YEARS MAY H AVE TO BE KEPT I.T.A. NO. 347/HYD/2017 :- 4 - : IN MIND. THEREFORE, ON THESE TWO ISSUES CONTESTED, TH E MATTER IS RESTORED TO THE FILE OF AO FOR FRESH EXAMINATION. NEEDL ESS TO SAY ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 29 TH NOVEMBER, 2017 TNMM I.T.A. NO. 347/HYD/2017 :- 5 - : COPY TO : 1. RAJIV AMARAM, C/O. MURTHY & CO., CHARTERED ACCOUNTANTS, 3-6-66/A, BASHIR BAGH, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-11(2), HYDERABAD. 3. CIT (APPEALS)-5, HYDERABAD. 4. PR.CIT-5, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.