SKK Steel Enterprises Pvt. Ltd., Mumbai V. Deputy Commissioner of Income tax, Raigad

ITA 389/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6678 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 30-07-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 16-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS SHABANA PARVEEN
• Assessee Lawyers: TEJINDER SINGH
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY , JM . / I TA NO.389 /PUN/20 17 / ASSESSMENT YEAR : 2012 - 13 SKK STEEL ENTERPRISES PRIVATE LIMITED. 286, VICTORIA OVER BRIDGE ROAD, DARUKHANA, REAY ROAD, MUMBAI - 400 010. PAN : AAJCS2912D ....... / APPELLANT / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, PANVEL CIRCLE, PANVEL, DIST. RAIGAD. / RESPONDENT A SSESSEE BY : SHRI TEJINDER SINGH REVENUE BY : MRS. SHABANA PARVEEN / DATE OF HEARING : 30. 0 7 .2019 / DATE OF PRONOUNCEMENT : 30 .07 .2019 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER THE LD. CIT(APPEALS) - 2, THANE DATED 24.11.2016 FOR THE ASSESSMENT YEAR 2012 - 13 AS PER THE GROUNDS OF APPEAL ON RECORD. 2 ITA NO. 389 /PUN/20 17 A.Y. 2012 - 13 2. THE CRUX OF THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO AD - HOC DISALLOWANCE OF RS.15,97,830/ - @ 5% OF THE MISCELLANEOUS EXPENSES CLAIMED IN THE PROFIT & LOSS ACCOUNT . 3. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE DEBITED TOTAL EXPENDITURE OF RS.3,19,56,578/ - UNDER THE HEAD MISCELLANEOUS EXPENSES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH CREDIBLE DOCUMENTARY EVIDENCES T O SUBSTANTIATE THE EXPENSES CLAIMED UNDER THIS HEAD. THE ASSESSEE FURNISHED REQUISITE DETAILS AND ON PERUSAL OF THE SAME, THE ASSESSING OFFICER NOTICED THAT SOME OF THE EXPENSES WERE INCURRED IN CASH, ACCOUNTED THROUGH SELF MADE VOUCHERS AND SOME VOUCHERS WERE UNSIGNED. IN ORDER TO PREVENT LEAKAGE OF REVENUE , THE ASSESSING OFFICER MADE AD - HOC DISALLOWANCE OF RS.15,97,830/ - I.E. 5% OF TOTAL EXPENSES OF RS.3,19,56,578/ - DEBITED UNDER THE HEAD MISCELLANEOUS EXPENSES AND ADDED TO THE TOTAL INCOME OF THE AS SESSEE. 4. THE LD. CIT(APPEALS) AS PER DETAILED REASONS AS APPEARING IN HIS ORDER HAD UPHELD 5% DISALLOWANCE OF THE TOTAL EXPENSES MADE BY THE ASSESSING OFFICER. 5. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE REITERATED THE SUBMISSIONS PLACED B EFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE LD. CIT(APPEALS). HE FURTHER PLACED RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SAYAJI IRON AND ENGG. CO. VS. CIT, 2002 253 ITR 749 (GUJ.) AND SUBMITTED THAT IN CASE OF A LIMIT ED COMPANY THERE CANNOT BE ANYTHING AS PERSONAL EXPENSES BECAUSE A LIMITED COMPANY BY ITS VERY NATURE CANNOT HAVE ANY PERSONAL USE. THE LD. AR, THEREFORE, PRAYED FOR DELETION OF ADDITION. 3 ITA NO. 389 /PUN/20 17 A.Y. 2012 - 13 6. PER CONTRA, THE LD. DR EMPHASIZE D ON THE FACTS ON RECORD THAT ON SCRUTINY OF THE DETAILS OF EXPENSES IT WAS CLEARLY FOUND THAT SOME OF THESE EXPENSES WERE THROUGH SELF MADE VOUCHERS WHILE SOME VOUCHERS WERE UNSIGNED AND MADE IN CASH, THEREFORE, THE GENUINENESS OF THESE EXPENSES DOES N OT STAND VERIFIED FULLY . THUS, LD. DR PRAYED THAT 5% DISALLOWANCE OF THE TOTAL EXPENSES SHOULD BE SUSTAINED. 7. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVA L CONTENTIONS. THAT ON EXAMINATION OF THE FACTS ON RECORD AND FROM THE ORDER OF THE ASSESSING OFFICER AS WELL AS THE LD. CIT( APPEALS), IT IS CRYSTAL CLEAR THAT EXPENSES WERE INCURRED WHICH ARE NOT DOUBTED BY THE DEPARTMENT. REGARDING CREDIBILITY OF THE DOCUMENTARY EVIDENCES FURNISHED, SOME OF THE EXPENSES WERE FOUND TO BE INCURRED IN CASH, ACCOUNTED THROUGH SELF MADE VOUCHERS AN D SOME WERE UNSIGNED. TAKING THE TOTALITY OF FACTS AND CIRCUMSTANCES IN THIS CASE, WE ARE OF THE CONSIDERED VIEW TO MEET ENDS OF JUSTICE, THE ADDITION OF RS.50,000/ - WOULD BE APPROPRIATE UNDER THIS HEAD . ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. C IT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO MAKE THE TOTAL DISALLOWANCE OF RS.50,000/ - ON THIS HEAD WHILE PROVIDING APPEAL EFFECT TO THIS ORDER. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRO NOUNCED ON 30 TH DAY OF JULY , 201 9 . SD/ - SD/ - D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 30 TH JULY 2019 . SB 4 ITA NO. 389 /PUN/20 17 A.Y. 2012 - 13 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 2, THANE. 4. THE PR. CIT - 2, THANE. 5 . , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 5 ITA NO. 389 /PUN/20 17 A.Y. 2012 - 13 DATE 1 DRAFT DICTATED ON 30. 0 7 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 30 .0 7 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER