The ACIT, Circle-6, Surat V. Major Sushilkumar P.Sharma, Surat

ITA 375/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9945 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-09-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 01-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH B BB B BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI BHAVNESH BHAVNESH BHAVNESH BHAVNESH SAINI SAINI SAINI SAINI, , , , JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER AND AND AND AND SHRI SHRI SHRI SHRI N.S.SAINI N.S.SAINI N.S.SAINI N.S.SAINI, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER DATE OF HEARING 9-9-10: DRAFTED ON: 9 -9-10 ITA NO. 375 /AHD/ 2008 ASSESSMENT YEAR :2004-05 ASSI STANT COMMISSIONER OF INCOME TAX, CIRCLE-6, ROOM NO.623,AAYAKAR BHAVAN, MAJURA GATE, SURAT. VS. MAJOR SUSHILKUMAR P.SHARMA, S,NO.71, NAVSARJAN SOCIETY, SAMEER COMPLEX, PANDESARA, SURAT. PAN/GIR NO. : ANEPS 7230B (A PPELLANT ) .. ( RESPONDENT ) APPELL ANT BY : SHRI K. MADHUSUDAN, SR.D.R. RESPONDENT BY: SHRI RASESH SHAH. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-IV, SU RAT, DATED 1- 11-2007. 2. GROUND NO.1 OF THE APPEAL READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED TO RESTRICT THE DISALLOWANCE OUT OF SECUR ITY PERSONAL EXPENSES TO `.5,56,600/- MADE BY THE LEARN ED ASSESSING OFFICER AMOUNTING TO `.11,13,178/-. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE THE ASSESSEE IS ENGAGED IN PROVIDING INDUSTRIAL SECURITY GUARDS AND IN TRADING OF LPG CYLINDERS AND STORES. THE LEARNED ASSESSING OFFICE R OBSERVED CERTAIN DEFECTS IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE - 2 - IN RESPECT OF SALARY PAID TO SECURITY PERSONNEL. TH E LEARNED ASSESSING OFFICER DISALLOWED 10% OF SALARY EXPENSES CLAIMED BY THE ASSESSEE AND THEREBY MADE ADDITION OF `.11,13,178/- . 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) OBSERVED THAT THE ASSESSEE WAS PROVIDING SECURITY S ERVICES THROUGHOUT INDIA AND IT WAS DIFFICULT ON THE PART O F THE ASSESSEE TO PRODUCE PERSONNEL AFTER TWO YEARS WHEN ASSESSMENT H EARING WAS TAKEN UP. CONSIDERING THE FACTS AND CIRCUMSTANCES H E CONSIDERED REASONABLE TO RESTRICT THE DISALLOWANCE @ 5% OF THE TOTAL EXPENSES PAID ON ACCOUNT OF SALARY TO SECURITY GUARDS AND TH EREFORE, RESTRICTED THE DISALLOWANCE TO `.5,56,600/- AND DELETED THE DI SALLOWANCE OF `.5,56,578/-. 5. BEFORE US THE LEARNED DEPARTMENTAL REPRESENTATIV E SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICER 6. WE FIND THAT THE LEARNED DEPARTMENTAL REPRESENTA TIVE COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS). NO MATERIAL W AS BROUGHT BEFORE US TO SHOW THAT THE DISALLOWANCE MADE BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) @ 5% WAS UNJUS TIFIED ON THE FACTS OF THE CASE AND MORE DISALLOWANCE WAS WARRANT ED. IN ABSENCE OF ANY SUCH MATERIAL, WE DO NOT FIND ANY GOOD REASO N TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) THUS THIS GROUND OF APPEAL OF THE REVENUE IS DISMIS SED. 7. GROUND NO.2 OF THE APPEAL READS AS UNDER:- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN DELETING THE DISALLOWANCE OF `.5,87,24 2/- OUT OF UNIFORM EXPENSES MADE BY THE LEARNED ASSESSI NG OFFICER. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE CLAIMED EXPENSES OF `.11,84,871/- UNDER THE HEAD UNIFORM EXPENSES. THE LEARNED - 3 - ASSESSING OFFICER OBSERVED THAT THE RECEIPT OF THE ASSESSEE FROM SALARY DECLINED BY 70.8% AND SALARY EXPENSES DECLIN ED BY 70% WHEREAS THE UNIFORM EXPENSES CLAIMED REGISTERED DEC LINE OF 40.5% ONLY. HE THEREFORE, DISALLOWED `.5.87,242/- OUT OF THE UNIFORM EXPENSES. 9. ON APPEAL, LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HELD THAT THE UNIFORM EXPENSES NEED NOT TO BE IN TH E EXACT PROPORTION OF SALARY EXPENSES AND DEPENDS UPON VARI OUS FACTORS. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DELETE D THE DISALLOWANCE OF `.5,87,242/- IN ITS ENTIRETY. 10. BEFORE US THE LEARNED DEPARTMENTAL REPRESENTATI VE RELIED UPON THE ORDER OF THE LEARNED ASSESSING OFFICER. 11. WE FIND THAT NO SPECIFIC DEFECT IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) COULD BE POINT ED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. IT IS ALSO OBS ERVED THAT NO SPECIFIC DEFECT IN THE SUPPORTING VOUCHERS OF UNIFO RM EXPENSES WAS POINTED OUT BY THE LEARNED ASSESSING OFFICER IN THE ORDER OF THE ASSESSMENT. IN THE CIRCUMSTANCES WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS). 12. GROUND NO.3 OF THE APPEAL READS AS UNDER:- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE AN D IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN DELETING THE DISALLOWANCE OF `.2,46,90 8/- OUT OF DELIVERY AND LOADING CHARGES MADE BY LEARNED ASSESSING OFFICER. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE LEARNED ASSESSIN G OFFICER DISALLOWED `.2,46,908/- OUT OF DELIVERY AND LOADING CHARGES. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DELETE D THE ADDITION BY OBSERVING AS UNDER :- - 4 - I HAVE CONSIDERED THE SUBMISSIONS AND HAVE GONE TH ROUGH THE DETAILS. THE LEARNED ASSESSING OFFICER HAS MATH EMATICALLY CALCULATED THE PROPORTIONATE CHANGE IN THE LOADING AND DELIVERY OF CYLINDERS WHICH IS ERRONEOUS. THERE IS NO JUSTIFICATION IN COMPARING LAST YEARS PAYMENTS MAD E TO LOADERS, SINCE AS RIGHTLY POINTED OUT BY THE APPELL ANT, IT WOULD DEPEND UPON THE LOADERS UNION AT THE IOC PLANT TO DECIDE AND DEMAND A PARTICULAR RATE FOR LOADING. REGARDING DEL IVERY CHARGES, COMPLETE DETAILS OF CYLINDERS DELIVERED WA S FURNISHED BY THE APPELLANT ALONG WITH RATE FOR 14 KGS. AND 16 KGS. CYLINDERS AND THEREFORE THERE IS NO JUSTIFICATION A GAIN IN CALCULATING THE CHARGES MATHEMATICALLY. THE LEARNED ASSESSING OFFICER HAS MADE THE DISALLOWANCE ONLY ON THE BASIS OF CONJECTURES AND IS NOT SUSTAINABLE. 14. WE FIND THAT NO SPECIFIC ERROR IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) COULD BE POINT ED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. FURTHER, WE FI ND THAT NO MATERIAL WAS BROUGHT ON RECORD BY THE LEARNED ASSES SING OFFICER AFTER VERIFYING FROM ANY COMPARABLE CASE TO SHOW TH AT THE EXPENSES CLAIMED UNDER THE HEAD BY THE ASSESSEE WAS UNREASON ABLE OR EXCESSIVE. IN THE CIRCUMSTANCES, WE DO NOT FIND AN Y GOOD REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS). IT IS CONFIRMED THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON TH DAY OF SEPTEMBER, 2010. (BHAVNESH SAINI) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTA NT MEMBER AHMEDABAD: ON THIS TH DAY OF SEPTEMBER, 201 0 COMPILED AND COMPARED BY : PATKI - 5 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-IV,SURAT. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 13-9-2010 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 13-9-2010 ------ ------------- 3. DRAFT PROPOSED & PLACED 13-9-2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 14-9-2010 ---------- -------JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 15-9-2010 --------- ----------- 6. KEPT FOR PRONOUNCEMENT ON 15-9-2010 --------- ----------- 7. FILE SENT TO THE BENCH CLERK 15-9-2010 ------ -------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- -- -------------------