Sri.Padmakumar K.P., Alappuzha V. The ITO, Wd-3, Alappuzha

ITA 395/COCH/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0854 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-11-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 23-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: R SRINIVASAN
• Keywords: Unexplained investment
• Section: 142(1); 69B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M ITA NO.395/COCH/2018 ASSESSMENT YEAR : 201 4 - 15 SHRI PADMAKUMAR K.P., KOMALAVILAS, ZILLA COURT WARD, THATHAMPALLY, ALAPPUZHA - 688 013. [PAN:ADQPP 3033R] VS. THE IN COME TAX OFFICER, WARD - 3, ALAPPUZHA. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) A SSESSE E BY SHRI R. SRINIVASAN, FCA REVENUE BY SMT. A.S. BINDHU, SR. DR D ATE OF HEARING 27 /11/2018 DATE OF PRONOUNCEMENT 29 / 1 1 /2018 O R D E R PER CHANDRA POOJARI, AM: TH IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER O F THE CIT (A), KOTTAYAM DATED 27/07/2018 AND PERTAIN TO THE A SSESSMENT YEAR 2014 - 15. 2. THE FIRST GROUND IS WITH REGARD TO ADDITION OF 10% OF SELECTED EXPENDITURE FOR DEFICIENCY IN GROSS PROFIT AND NET PROFIT. 3. THE FACTS OF THE CASE ARE THAT VIDE NOTICE U/S. 142(1) OF THE ACT AND SUBSEQUENT LETTERS, THE ASSESSEE WAS REQUIRED TO FURNISH SUPPORTING DOCUMENTS/VOUCHERS TO SUBSTANTIATE THE VARIOUS EXPENSES CLAIMED OTHER THAN I.T.A. NO . 395 / COCH/ 201 8 2 THAT OF PURCH ASE OF LIQUOR WHICH WAS COVERED BY TCS. ACCORDING TO THE ASSESSING OFFICER EVEN AFTER AFFORDING SEVERAL OPPORTUNITIES, THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE IN SUPPORT OF VARIOUS EXPENSES TILL DATE. CONSIDERING THE VERY LOW NP AND POSSIBILITY OF INF LATED EXPENSES UNDER THE HEAD VEGETABLES AND FRUITS (RS.4,81,431), GENERAL PURCHASE (RS.1,34,752), REPAIR AND MAINTENANCE (RS.1,74,109), FISH BEEF, EGG ETC. (RS.7,51,319), PROVISIONS (RS.7,33,308), THE ASSESSING OFFICER DISALLOWED 10% OF THE ABOVE EXPENSES IN THE ABSENCE OF PROPER COMPLETE EVIDENCE. ACCORDINGLY, THE ASSESSING OFFICER DISALLOWED THE AMOUNT OF R S .2,27,490/ - AND ADDED TO THE RETURNED INCOME UNDER THE HEAD BUSINESS. 4. ON APPEAL, THE CIT(A) OBSERVED THAT DURING THE APPELLATE PROCEEDINGS ALSO THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE IN SUPPORT OF THE EXPENSES AND CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE RECORD. TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING A BAR , HOTEL AND RESTAURANT WHICH IS AN UNORGANIZED SECTOR. IN OUR OPINION, FULL FLEDGED VOUCHERS IN RESPECT OF VEGETABLES AND FRUITS, GENERAL PURCHASE, REPAIRS AND MAINTENANCE, FISH, BEEF, EGG AND OTHER PRO VISIONS C ANNOT BE COLLECTED. BEING SO, THE ASSESSEE MAINTAINS SELF MADE VOUCHERS WITH RECIPIENT SIGNATURES. HENCE, THERE MAY BE CHANCES OF INFLATING I.T.A. NO . 395 / COCH/ 201 8 3 EXPENDITURE. IN VIEW OF THIS, TO MEET THE ENDS OF JUSTICE, WE DIRECT THE ASSESSING OFFICER TO RESTRICT T HE DISALLOWANCE TO THE EXTENT OF 5% INSTEAD OF 10% MADE BY THE ASSESSING OFFICER . ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 6. GROUND NO. 2 REGARDING DISALLOWANCE OF MEDICAL EXPENSES TOWARDS PERSONAL USE AND GROUND NO. 4 REG ARDING TREATMENT OF DEPOSITS WITH FEDERAL BANK AS UNEXPLAINED INVESTMENT U/S. 69B OF THE ACT, WHICH WERE NOT PRESSED BEFORE US, HENCE, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 7. GROUND NO. 3 IS WITH REGARD TO DISALLOWANCE U/S. 36(1)(VA) IN RESPECT OF EPF AND ESI PAID BEYOND THE DUE DATE . 7. 1 THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER DISALLOWED AN AMOUNT OF RS.1,01,748 U/S. 36(1)(VA) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAD NOT DEPOSITED THE CONTRIBUTION OF THE EMPLOYEES TOWARDS EPF AND ESI BEFORE THE DUE DATE, SPECIFIED IN THOSE ACTS. 7.2 ON APPEAL, THE CIT(A) HELD THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF MERCHEM LTD. ( 61 TA X MANN.COM 119 ) . HENCE, THE CIT (A) DISMISSED TH E GROUND OF APPEAL RAISED BY I.T.A. NO . 395 / COCH/ 201 8 4 THE ASSESSEE ON THE ISSUE OF DEDUCTION OF CONTRIBUTION OF EMPLOYEES U/S. 36(1)(VA) OF THE ACT. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 7.3 AS RIGHTLY HELD BY THE CIT(A), THIS ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF MERCHEM LTD. (61 TAXMANN.COM 119). HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND SAME IS CONFIRMED. HENCE, THIS GROUND OF APPEAL OF THE ASSE SSEE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH NOVEMBER , 201 8 . SD/ - SD/ - ( GEORGE GEORGE K. ) ( CHANDRA POOJARI ) JUDICIAL MEMBE R A CCOUNTANT MEMBER PLACE: KOCHI DATED: 29 TH NOVEMBER , 2018 GJ COPY TO: 1 . SHRI PADMAKUMAR K.P., KOMALAVILAS, ZILLA COURT WARD, THATHAMPALLY, ALAPPUZHA - 688 013. 2. THE INCOME TAX OFFICER , WARD - 3, ALAPPUZHA. 3. THE COMMISSIONER OF INCOME - TAX (AP P EALS) , KOTTAYAM. 4. THE PR. COMMISSIONER OF INCOME - TAX, KOTTAYAM. 5. D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A. NO . 395 / COCH/ 201 8 5 I.T.A.T., COCHIN