The ACIT, Bhopal V. M/s Swadesh Dall Mill, Bhopal

ITA 352/IND/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2764 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 10-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: S S DESH
• Keywords: Depreciation

Judgement Text

PAGE 1 OF 5 - I.T.A.NO. 352/IND/2009 M/S. SWADESH DALL MILL, BHOPAL. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AACFS9230Q I.T.A.NO. 352/IND/2009 A.Y. : 2005-06 ACIT, M/S. SWADESH DALL MILL, 3(1), VS CHHOLA ROAD, BHOPAL. BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI P.K. MITRA, SR. DR RESPONDENT BY : SHRI S. S. DESHPANDE, CA DATE OF HEARING : 29.06.2010 O R D E R PER V.K. GUPTA, A.M. THIS APPEAL FILED BY THE REVENUE ARISES OUT OF ORDE R OF THE LD. CIT(A)-II, BHOPAL , DATED 16.02.2009, FOR THE ASSES SMENT YEAR 2005-06. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. GROUND NO. 1 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW LO SS CLAIMED BY THE ASSESSEE AT RS. 22,10,855/- ( I.E. R S. PAGE 2 OF 5 - I.T.A.NO. 352/IND/2009 M/S. SWADESH DALL MILL, BHOPAL. 17,59,314/- BUSINESS LOSS & RS. 4,51,541/- DEPRECIA TION LOSS) 4. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE FILED RE TURN SHOWING NIL INCOME AND CLAIMED CARRY FORWARD OF DEPRECIATION OF THE YEAR AT RS. 4,51,541/- AND BUSINESS LOSS TO THE TUNE OF RS. 17, 59,314/-. THE AO MADE CERTAIN DISALLOWANCE AND WORKED OUT THE TOTAL INCOM E AT RS. 2,68,342/- WITHOUT TAKING COGNIZANCE OF THE FACT OF TOTAL LOSS SUFFERED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION AT RS. 22,10,855/- WHICH INCLUDED THE AMOUNT OF IMPUGNED DEPRECATION. THE LD.CIT(A), ON A PPEAL, AFTER TAKING NOTE OF LOSS INCLUDED DEPRECIATION FROM THE AUDITED FINANCIAL STATEMENT DIRECTED THE AO TO ALLOW THE SAME. AGGRIEVED BY THI S, THE REVENUE IS IN APPEAL BEFORE US. 5. THE LD. SR. DR PLACED STRONG RELIANCE ON THE ORDER OF THE A.O., WHEREAS THE LD. COUNSEL FOR THE ASSESSEE PLACED STR ONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 6. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 7. IT IS NOTED THAT THAT THERE IS NO DISPUTE AS REGARD TO LOSS SHOWN BY THE ASSESSEE IN PROFIT AND LOSS ACCOUNT AS WELL AS QUANTUM OF DEPRECIATION. IN CASE THE ADDITIONS MADE BY THE ASS ESSING OFFICER ARE DELETED, THEN THE TOTAL AMOUNT OF SUCH LOSS AND DEP RECIATION IS LIABLE TO BE PAGE 3 OF 5 - I.T.A.NO. 352/IND/2009 M/S. SWADESH DALL MILL, BHOPAL. CARRIED FORWARD OTHERWISE, THE BALANCE AMOUNT AFTER SET OFF IN THE YEAR ITSELF WOULD BE ELIGIBLE FOR CARRY FORWARD. IN THIS VIEW OF THE MATTER, WE HOLD THAT THE LD.CIT(A) HAS TAKEN A RIGHT VIEW AND, THEREFORE, WE DISMISS THIS GROUND OF THE REVENUE. 8. GROUND NO.2, 3 & 4 READ AS UNDER :- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,50,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF BROKERAGE EXPENSES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF RS. 30,000/- OUT OF TOTAL DISALLOWANCE OF RS.1,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF WAGES AND FACTORY EXPENSES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN RESTRICTING THE ADDITION O RS. 9,571/- OUT OF TOTAL DISALLOWANCE OF RS. 18,742/- O N ACCOUNT OF PERSONAL USE OF TELEPHONE. PAGE 4 OF 5 - I.T.A.NO. 352/IND/2009 M/S. SWADESH DALL MILL, BHOPAL. 9. WE FIND THAT THE DISALLOWANCES UNDER THE HEAD BRO KERAGE EXPENSES AND WAGES AND FACTORY EXPENSES HAVE BEE N MADE ON AD HOC BASIS BY THE ASSESSING OFFICER FOR THE REASON THAT THESE WERE NOT COMPLETELY VERIFIABLE. THE AO HAS ALSO DISALLOWED 2 0 % OF TELEPHONE EXPENSES ON ACCOUNT OF PERSONAL USE. THE LD.CIT(A) HAS DELETED ADDITION OF RS. 1.50 LAKHS OUT OF BROKERAGE, EXPENSES AFTER VERIFYING THE RECORDS AND THE RATE OF BROKERAGE BEING REASONABLE. THESE F INDINGS OF THE LD.CIT(A) HAVE REMAINED UNCONTROVERTED. HENCE, WE D ISMISS GROUND NO.2 OF THE REVENUES APPEAL. 10. AS REGARD TO WAGES AND FACTORY EXPENSES, WE FIND T HAT THE LD.CIT(A) HAS VERIFIED THE WAGES EXPENSES FROM THE RECORD AND ,THEREAFTER, IT HAS BEEN HELD THAT NO DISALLOWANCE WAS CALLED FOR OUT OF SUCH WAGES EXPENSES. 11. AS REGARD TO FACTORY EXPENSES, SOME OF THE EXPENSES HAVE REMAINED UNVERIFIABLE OR HAVE BEEN FOUND TO HAVE IN CURRED FOR NON- BUSINESS PURPOSES AND, ACCORDINGLY, THE LD.CIT(A) H AS SUSTAINED A PARTIAL DISALLOWANCE OF RS.30,000/- THEREFROM. IN OUR VIEW, THE VIEW TAKEN BY THE CIT(A) IS IN ACCORDANCE WITH THE MATERIAL PRODUCED AND IS REASONABLE AND, HENCE, WE HOLD THAT NO INTERFERENCE IS REQUIRE D FROM OUR SIDE. THUS, GROUND NO.3 OF THE REVENUE IS ALSO DISMISSED. PAGE 5 OF 5 - I.T.A.NO. 352/IND/2009 M/S. SWADESH DALL MILL, BHOPAL. 12. AS REGARD TO PERSONAL USE, WE FIND THAT THE LD.CIT( A) HAS REDUCED THE DISALLOWANCE OUT OF TELEPHONE EXPENSES TO 10 %, WHICH IS ALSO REASONABLE AND, ACCORDINGLY, WE DECLINE TO INT ERFERE. THUS, THIS GROUND OF THE REVENUE IS ALSO DISMISSED. 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30 TH JUNE, 2010. CPU* 296