ITO, New Delhi V. M/s Sniffers India, New Delhi

ITA 3973/DEL/2013

• Counselvise Citation: 397320114 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 03-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 25-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Keywords: Depreciation; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI H.S. SIDHU: JUDICIAL MEMBER ITA NO. 3973/DEL/2013 A.Y. 2008-09 INCOME-TAX OFFICER, VS. M/S SNIFFERS INDIA WARD 23(1), NEW DELHI. 31, SANT NAGAR, EAST OF K AILASH, NEW DELHI. PAN: ABDFS 9534 M ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI B.R.R. KUMAR SR. DR RESPONDENT BY : NONE DATE OF HEARING : 03-06-2015 DATE OF ORDER : 05-06-2015. O R D E R PER S.V. MEHROTRA, A.M:- THIS APPEAL, PREFERRED BY THE REVENUE, IS DIRECTED AGAINST CIT(A)S ORDER DATED 26-4-2013 RELATING TO A.Y. 2008-09. EFFECTIVE GROUNDS RAISED ARE AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ACCEPTING THE ADDITION EVIDENCE IN VIOLATION OF RULE 46A OF THE INCOME TAX ACT. 2 ITA NO. 3973/DEL/2013 ITO VS. SNIFFERS INDIA 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS . 13,03,862/- (BEING 10% OF VARIOUS EXPENSES AMOUNTIN G TO RS. 1,30,38,616/-) ON THE BASIS OF ADDITIONAL EVIDENCES IN CONTRAVENTION OF THE PROVISION OF THE RULE 46A. 2. NONE PUT IN APPEARANCE ON BEHALF OF THE ASSESSEE AT THE HEARING DESPITE ISSUE OF NOTICE FOR HEARING. ACCORDINGLY, WE PROCEED TO D ISPOSE OF THE REVENUES APPEAL EX PARTE, QUA THE ASSESSEE, ON MERITS AND IN THAT P ROCESS WE HAVE HEARD LD. SR. DR AND PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED E-RETURN AT A TOTAL INCOME OF RS. 1,09,739/-. THE ASSESSEE FIRM, IN THE RELEVANT ASSESSMENT YEAR, WAS ENGAGED IN THE BUSINESS OF INVESTIGATION. THE AO MA DE AN ADDITION OF RS. 13,03,862/-, INTER ALIA, OBSERVING IN PARA 5 AS UN DER: 5. ON FURTHER PERUSAL OF THE PROFIT AND LOSS ACCOU NT, IT IS NOTICED THAT THE ASSESSEE HAS CLAIMED EXPENSES UNDE R THE HEAD BUSINESS PROMOTION OF RS. 38,352/-, DEPRECIATION OF RS. 4,06,438/-, FACTORING CHARGES OF RS. 1,11,53,903/-, CONVEYANCE OF RS. 3,35,501/-, PRINTING & STATIONERY EXPENSES O F RS. 1,23,861/-, CALLING CHARGES OF RS. 1,35,125/- AND T OUR & TRAVELS EXPENSES OF RS. 8,45,256/-. THE A.R. OF THE ASSESSE E WAS ASKED TO PRODUCE LOG BOOK, BILLS, VOUCHERS AND OTHER BOOK S OF ACCOUNT IN SUPPORT OF EXPENSES FOR THE BUSINESS PURPOSES, B UT THE ASSESSEE COULD NOT PRODUCE ANY LOG BOOK/ BILLS/ VOU CHERS OR ANY OTHER BOOKS OF ACCOUNT IN SUPPORT OF HIS CLAIM. HEN CE, 1/10 TH OF EXPENSES (I.E. 10% OF RS. 1,30,38,616/-) IS DISALLO WED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 3 ITA NO. 3973/DEL/2013 ITO VS. SNIFFERS INDIA 4. LD. CIT(A) DELETED THE DISALLOWANCE AFTER TAKING INTO CONSIDERATION THE AFFIDAVIT FILED BY PARTNER OF THE FIRM, AFFIRMING T HAT ALL THE DETAILS, VIOLS AND VOUCHERS REQUIRED BY THE AO WERE PRODUCED DURING TH E ASSESSMENT PROCEEDINGS. HE FURTHER OBSERVED AS UNDER: THE BUSINESS PROMOTION EXPENSES OF RS. 38,532/- HA VE BEEN INCURRED THROUGH CREDIT CARD. MOREOVER, THE APPELLA NT HAS PAID FRINGE BENEFIT TAX ON THE BUSINESS PROMOTION, CONVE YANCE, AND TOUR AND TRAVEL EXPENSES. THE PRINTING AND STATIONE RY EXPENSES OF RS. 1,23,861/- CONSIST OF MAINLY PETTY AMOUNTS I NCURRED FOR PURCHASE OF FILES, FOLDERS, ETC. AND AMOUNTS OF OVE R RS. 1,000/- ARE SUPPORTED BY BILLS. THE MAJOR ITEMS OF EXPENDIT URE IS OF FACTORING CHARGES OF RS. 1,11,53,903/- WHICH ARE PA ID TO THE AGENTS FOR DEBT COLLECTION AND VERIFICATION. THE AP PELLANT HAS SUBMITTED COPIES OF TDS RETURNS FILED IN FORM NO. 2 6Q IN EVIDENCE OF DEDUCTION OF TAX ON PAYMENT OF TOTAL FA CTORING CHARGES OF RS. 1,07,96,960/-, AND IT IS SUBMITTED T HAT TAX WAS NOT DEDUCTED ON THE BALANCE AMOUNT OF RS. 3,56,943/ - AS THE AMOUNTS PAID WERE LESS THAN THE LIMITS PRESCRIBED F OR TDS. THE TDS RETURNS HAVE THE COMPLETE DETAILS OF THE PERSON S IN WHOSE CASES TAX HAS BEEN DEDUCTED ALONG WITH THEIR PAN. C ONSIDERING THE EVIDENCES FILED, NO REASON IS FOUND FOR SUSTAIN ING THE LUMP SUM DISALLOWANCE OF 10% OF VARIOUS EXPENSES. ACCORD INGLY, THE DISALLOWANCE AMOUNTING TO RS. 13,03,862/- IS DELETE D. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6. ADMITTEDLY, THE DISALLOWANCE MADE BY THE AO WERE AD HOC DISALLOWANCES, WITHOUT CONSIDERING THE EVIDENCE ON RECORD. NOTHING HAS BEEN BROUGHT ON RECORD TO 4 ITA NO. 3973/DEL/2013 ITO VS. SNIFFERS INDIA CONTROVERT THE FINDINGS OF LD. CIT(A) AND, THEREFOR E, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE SAME. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 05-06-2015. SD/- SD/- (H.S. SIDHU) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05-06-2015. MP: C OPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR