ACIT,Circle-2, Gwalior V. M/s K.S.OilsLtd, Morena

ITA 364/AGR/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50349 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 09-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HOMI RAJVANSH
• Assessee Lawyers: MAHESH AGARWAL
• Keywords: Rejection of books of accounts
• Section: 143(3); 142(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO.364/AGR/2009 ASSESSMENT YEAR : 2006-07 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S. K.S. O ILS LIMITED, CIRCLE-2, GWALIOR. A.B. ROAD, MORENA. (PAN : AABCK 3119 J) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HOMI RAJ VANSH, CIT (D.R.) RESPONDENT BY : SHRI MAHESH AGARWAL, C.A. DATE OF HEARING : 17.08.2011 DATE OF PRONOUNCEMENT : 18.08.2011 ORDER PER BENCH : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E IMPUGNED ORDER DATED 28.05.2009 PASSED BY THE LD. CIT(A), GWALIOR FOR TH E ASSESSMENT YEAR 2006-07. 2. ORIGINALLY, THE REVENUE HAS TAKEN ONLY ONE GROUN D IN WHICH DELETION OF ADDITION OF RS.8,00,000/- ON ACCOUNT OF VARIOUS DIS ALLOWANCES HAS BEEN CHALLENGED BY THE REVENUE. LATER ON, IN COMPLIANCE OF THE ORD ER OF THIS BENCH DATED 13.07.2011, THE REVENUE HAS FILED AMENDED GROUNDS O F APPEAL IN WHICH THE 2 REVENUE HAS SEGREGATED THE ADDITION AND CHALLENGED THE SAME IN 6 GROUNDS. THE ORIGINAL AS WELL AS THE AMENDED GROUNDS OF APPEAL A RE REPRODUCED AS UNDER :- ORIGINAL GROUND OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF VARIOUS DISALLOWANCES AMOUNTING TO ` 8,00,000/- AMENDED GROUNDS OF APPEAL : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF E XCESS STAFF WELFARE EXPENSES OF ` 50,000/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF E XCESS ELECTRIC REPAIR OF ` 2,00,000/- 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF E XCESS SECURITIES CHARGES AMOUNTING TO ` 1,50,000/-. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF A DVERTISEMENT EXPENSES AMOUNTING TO ` 2,00,000/-. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF B ROKERAGE EXPENSES AMOUNTING TO ` 1,00,000/-. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF H DPE MANUFACTURING EXPENSES OF ` 1,00,000/-. 3 3. THE FACTS RELATING TO THE ISSUE IN DISPUTE ARE T HAT THE ASSESSEE IS A PUBLIC LIMITED COMPANY AND FILED ITS RETURN OF INCOME ON 3 0.11.2006 DECLARING TOTAL INCOME OF RS.11,73,48,500/- WHICH WAS PROCESSED UND ER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER).. SUB SEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND THE ASSESSIN G OFFICER ISSUED NOTICE UNDER SECTION 143(2) OF THE ACT ON 28.09.2007 WHICH WAS D ULY SERVED ON THE ASSESSEE. NOTICE UNDER SECTION 143(2) AND 142(1) OF THE ACT A CCOMPANIED BY A DETAILED QUESTIONNAIRE WAS ISSUED ON 16.07.2008. IN RESPONS E TO THE SAME, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FILED DETAILS IN COMPLIANCE OF THE QUESTIONNAIRE DATED 16.07.2008 AND ALSO PROD UCED BOOKS OF ACCOUNT ALONG WITH BILLS & VOUCHERS OF RECEIPTS AND PAYMENTS WHIC H WERE DULY TEST CHECKED BY THE ASSESSING OFFICER. AFTER EXAMINING THE WRITTEN REPLY FILED BY THE ASSESSEE ALONG WITH DOCUMENTARY EVIDENCES SUPPORTING THE CLA IM, THE ASSESSING OFFICER DISALLOWED ` 50,000/- OUT OF STAFF WELFARE EXPENSES, ` 2,00,000/- UNDER THE HEAD REPAIRS & MAINTENANCE OF BUILDING AND ELECTRIC REPA IRS, ` 1,50,000/- ON ACCOUNT OF EXPENDITURE ON SECURITIES CHARGES, ` 2,00,000/-ON ACCOUNT OF ADVERTISEMENT EXPENSES, ` 1,00,000/- ON ACCOUNT OF BROKERAGE CHARGES, ` 1,00,000/- ON ACCOUNT OF TRANSPORTATION, LOADING & UNLOADING CHARGES, ` 2,00,000/- ON ACCOUNT OF TIN MANUFACTURING EXPENSES AND ` 1,00,000/- ON ACCOUNT OF HDPE MANUFACTURING EXPENSES AND COMPLETED THE ASSESSMENT ON 05.12.2008 UNDER SECTION 143(3) OF THE ACT. AGGRIEVED BY THE SAME, THE ASSESSEE FILED APP EAL BEFORE THE LD. FIRST 4 APPELLATE AUTHORITY WHO, VIDE IMPUGNED ORDER DATED 28.05.2009, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE ADDITION IN DISPUTE. NOW THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED O RDER DATED 28.05.2009. 4. AT THE TIME OF HEARING, THE LD. DEPARTMENTAL REP RESENTATIVE RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER AND STATED TH AT THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION IN DISPUTE BUT THE LD. FI RST APPELLATE AUTHORITY HAS WRONGLY DELETED THE SAME ON ESTIMATION BASIS WHICH IS AGAINST THE LAW AND FACTS ON THE FILE. HE FURTHER STATED THAT THE ASSESSEE HAS NOT PRODUCED THE REQUIRED EVIDENCE BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFI CER HAS RIGHTLY MADE THE ADDITION. THEREFORE, ORDER OF THE ASSESSING OFFICE R MAY BE UPHELD BY CANCELING THE IMPUGNED ORDER. 5. ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSESSE E RELIED UPON THE ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY. HE FURTHER S TATED THAT THE ASSESSEE IS A PUBLIC LIMITED COMPANY AND IS SUBJECTED TO VARIOUS DISCIPL INARY NORMS UNDER THE COMPANIES ACT AND THE SEBI REGULATIONS. THE ASSESS EE BEING A COMPANY MAINTAINS ALL BOOKS OF ACCOUNTS IN THE NORMAL COURS E OF BUSINESS DULY SUPPORTED BY BILLS AND VOUCHES AND ITS ACCOUNTS ARE AUDITED BY I NDEPENDENT AUDITORS UNDER THE COMPANIES ACT AS WELL AS UNDER SECTION 44AB OF THE ACT. HE, FURTHER STATED THAT THE ASSESSING OFFICER HAS NOT NOTICED ANY ADVERSE R EMARKS IN EITHER OF THE RECORDS 5 AND HE HAS NOT REJECTED THE BOOKS OF ACCOUNTS PRODU CED BY THE ASSESSEE AND MADE DISALLOWANCE OF VARIOUS EXPENSES WITHOUT ANY BASIS AND THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY APPRECIATED THE FACTS AND EVI DENCES PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND DELETED THE ADDITI ON IN DISPUTE BECAUSE THE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACC OUNTS AND HAS ALSO NOT FOUND ANY DEFECT IN THE SAME. HE REQUESTED THAT THE APPE AL FILED BY THE REVENUE MAY BE DISMISSED. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US. AFTER PERUSING THE ASSESSMENT ORDER, WE F IND THAT THE ASSESSEE IS A PUBLIC LIMITED COMPANY AD ITS ACCOUNTS ARE AUDITED UNDER T HE COMPANIES ACT AS WELL AS UNDER SECTION 44AB OF THE ACT. WE ALSO FIND THAT T HE ASSESSING OFFICER HAS NOT NOTICED ANY ADVERSE REMARKS AND HAS NOT REJECTED TH E BOOKS OF ACCOUNTS PRODUCED BY THE ASSESSEE AND MADE THE ADDITION IN DISPUTE ON LY ON ESTIMATION BASIS. THE LD. FIRST APPELLATE AUTHORITY HAS NOTICED ALL THESE POI NTS FROM THE ASSESSMENT ORDER AND DELETED THE ADDITION IN DISPUTE. WE ALSO FIND THAT THE LD. FIRST APPELLATE AUTHORITY HAS HELD THAT THE ASSESSING OFFICER HAS M ADE THE ADDITION IN DISPUTE ON ADHOC BASIS AND THE ASSESSING OFFICER HAS NOT POINT ED OUT AS TO HOW THE EXPENSES ARE NOT ALLOWABLE UNDER SECTION 37 OF THE ACT BEING INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE. WE HAVE THOR OUGHLY GONE THROUGH THE ORDER PASSED BY THE REVENUE AUTHORITIES, ESPECIALLY THE I MPUGNED ORDER, AND WE ARE OF 6 THE CONSIDERED OPINION THAT NO INTERFERENCE IS CALL ED FOR IN THE WELL REASONED ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY. THERE FORE, WE CONFIRM THE SAME BY DISMISSING THE APPEAL FILED BY THE REVENUE. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. SD/- SD/- (K.G. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 18 TH AUGUST, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY