The ACIT, Circle-2, JAMNAGAR V. Saurashtra Cement Ltd., PORBANDAR

ITA 378/RJT/2011

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0192 (ITAT-RAJKOT)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 07-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG
• Keywords: Business expenditure
• Section: 43B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , , , , . .. . . .. . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAV A, AM ITA NO.378/RJT/2011. / ASSESSMENT YEAR 2007-08 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, JAMNAGAR ( * / APPELLANT) VS. SAURASHTRA CEMENT LIMITED, NEAR RAILWAY STATION, RANAVAV, PORBANDAR PAN: AAHCS5211J. +,* / RESPONDENT -. / ASSESSEE BY SHRI VIMAL DESAI . / REVENUE BY SHRI ANKUR GARG . / DATE OF HEARING 21.9.2012 . / DATE OF PRONOUNCEMENT 28.9.2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 28.7.2011 OF THE CIT(A)- JAMNAGAR FOR THE ASSESSMENT YEAR 2007-08. 2. THE GROUND NO.1 IS AGAINST DELETING THE ADDITION OF RS.15,30,000/- MADE BY THE AO ON ACCOUNT OF NON-VERIFIABLE NATURE O F VARIOUS BUSINESS EXPENSES. THE AO HAS DISCUSSED THIS ISSUE IN PARAGRAPH 3.2 OF THE ASSESSMENT ORDER. AS PER THE ASSESSMENT ORDER, ON SCRUTINY O F AUDIT ITA NO.378/RJT/2011. 2 REPORT THE AO FOUND THAT THE ASSESSEE HAS DEBITED THE FO LLOWING EXPENSES TO THE PROFIT AND LOSS ACCOUNT: (A) MISCELLANEOUS BUSINESS EXPENSES : RS.1268.05 LAKHS (B) TRAVELING EXPENSES RS. 207.21 LAKHS (C ) STAFF WELFARE EXPENSES RS. 53.99 LAKHS TOTAL RS.1529.25 LAKHS 3. THE AO FURTHER NOTICED THAT SOME OF THE EXPENSES AR E NOT PROPERLY EXPLAINED AND IN SOME EXPENSES THERE WAS NO COMPLETE DETAILS ETC. HE, THEREFORE, MADE LUMPSUM ADDITION OF RS.15,30,000/-. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITION FOR THE DETAILED REASONS GIVEN IN PARAGRAPH 15 OF HIS ORDER WHICH READS AS UNDER : 12. I HAVE DULY CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE DISCUSSION MADE BY THE AO IN THE ASSE SSMENT ORDER. AO HAS NOT POINTED OUT ANY DEFECTS WHICH MAY JUST IFY SUCH DISALLOWANCE. THE AO FAILED TO APPRECIATE THAT THE APPELLANT IS A PUBLIC LIMITED COMPANY. IT HAS MAINTAINED ALL THE R ECORDS RELATING TO ITS BOOKS OF ACCOUNT AS PER STATUTORY REQUIREMENTS. THE BOO KS OF ACCOUNTS OF THE APPELLANT WERE DULY AUDITED AS REQUIRE D BY THE COMPANIES ACT, 1956 AND THE INCOME TAX ACT, 1961. IT IS ALSO NOT KNOWN HOW HE ARRIVED AT FIGURE OF RS.15,30,000/- SUCH ADHOC DISALLOWANCE IS NOT AT ALL JUSTIFIED AND THAT TOO WITHO UT POINTING OUT ANY SPECIFIC ITEM OF DISALLOWANCE. SIMILAR. TYPE OF DISA LLOWANCE MADE AY 2005-06 WERE ALSO DELETED BY MY PREDECESSOR IN ORDER NO. CIT(A)/JAM/309/07 DATED 13.5.2010. IN VIEW OF ABOVE FACTS AND IN VIEW OF CONSISTENCY THE ADDITION OF RS.15,30,00 0/- MADE BY THE AO IS DIRECTED TO BE DELETED. THIS GROUND OF AP PEAL IS ALLOWED. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE R EVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. A THE TIME OF HEARING BEFORE US, SHRI ANKUR GAR G, THE LD. DR APPEARED FOR THE REVENUE COULD NOT POINT OUT ANY SERIOUS OBJECTION TO THE VIEW TAKEN BY THE LD. CIT(A IN DELETING THE LUMP SUM DISALLOWANCE OF RS.15,30,000/-. EVEN OTHERWISE, FROM THE PERUSAL OF TH E REASONING GIVEN BY THE AO; IT IS CLEAR THAT THE AO COULD NOT POINT O UT ANY SINGLE EXPENSES ITA NO.378/RJT/2011. 3 OR INSTANCE OF DEFECT IN BOOKS OF ACCOUNT OR MAINTENAN CE OF VOUCHERS OR WHAT IS THE NATURE OF NON-COMPLIANCE THEREIN. IN THIS VIEW OF THE MATTER, WE DECLINE TO INTERFERE. THIS GROUND OF APPEAL IS REJ ECTED. 6. THE ONLY OTHER GROUND IS AGAINST THE DELETING THE DISALLOWANCE U/S 43B OF THE ACT AMOUNTING TO RS.55,75,472/- ON ACCOUNT OF LATE PAYMENT OF PF CONTRIBUTION TO THE GOVERNMENT. 7. IN RESPECT OF THIS GROUND WE HAVE HEARD BOTH TH E SIDES. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS PAID RS.55,75,4 72/- IN RESPECT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND WITHIN THE GRACE PERIOD. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V/S . SAL EM CO-OPERATIVE SPINNING MILLS LTD. [2006] 284 ITR 621 (MAD.) HAS HEL D THAT THE PAYMENT TOWARDS PROVIDENT FUND AND EMPLOYEES STATE INSURANCE HAVE NOT BEEN MADE WITHIN THE GRACE TIME ALLOWED UNDER THE RELEVA NT STATUTE, THOUGH THE AMOUNTS WERE REQUIRED TO BE DEDUCTED IN COMPUTATION O F TAXABLE INCOME OF THE ASSESSEE. THE VIEW TAKEN BY THE LD. CIT(A) IN T HE IMPUGNED ORDER IS IN ACCORDANCE WITH THE RATIO OF DECISION OF THE HONB LE SUPREME COURT IN THE CASE OF CIT V/S SALEM CO-OPERATIVE SPINNING MI LLS LTD. (SUPRA), THEREFORE, WE DECLINE TO INTERFERE. THIS GROUND OF A PPEAL IS REJECTED. 8.. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED HEREINABOVE. SD/- SD/- ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 3/ ORDER DATE 28-09-2012 /RAJKOT ITA NO.378/RJT/2011. 4 SRL . .. . +4 +4 +4 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-. 2. +,* / RESPONDENT- 3. : / CONCERNED CIT. 4. :- / CIT (A). 5. 4 +, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , SENIOR PRIVATE SECRETARY , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.