M/s Electronics System Punjab Ltd., Chandigarh V. DCIT, Mohali

ITA 439/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5361 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 28-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH SMC, CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.439CHD/2011 (ASSESSMENT YEAR : 2006-07 ELECTRONICS SYSTEM PUNJAB LTD., VS. THE D.C.I.T., C/O PSIDC BUILDING CIRCLE 6(1), SECTOR 17, CHANDIGARH. MOHALI. PAN: AAACE3657N (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI N.K.SAINI, DR O R D E R THE APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A), DATED 1.2.2011 RELATING TO ASSES SMENT YEAR 2006-07 AGAINST THE ORDER PASSED U/S 143(3) OF THE INCOME-T AX ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL : 1. THE IMPUGNED ORDER IS BOTH AGAINST FACTS AND ERRONEOUS IN LAW. 2. THAT THE ORDER OF THE LD CIT APPEALS CHANDIGARH ON GROUND THAT THERE IS NO CHANCE OF AVAILABILITY OF A NY RECORD/ACCOUNTS VOUCHERS WHICH COULD BE PRODUCED IN ORDER TO GET THE EXPENSES VERIFIED. LD.CIT APPEALS HAS DISMISSED THE APPEAL WITH REMARKS THAT ADDITION SO MADE IS THERE FOR CONFIRMED IS HIGHLY EXCESSIVE ARBITRARY AND WRONG. 2 3. DESPITE SERVICE OF NOTICE NONE ATTENDED ON BEHAL F OF THE ASSESSEE. WE PROCEED TO DISPOSE OFF THE PRESENT APPEAL AFTER HEARING THE LEARNED D.R. FOR THE REVENUE. 4. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST THE DISALLOWANCE OF TOTAL EXPENSES CLAIMED UNDER THE HE AD STAFF WELFARE, TRAVELING & CONVEYANCE AND BUSINESS PROMOTION. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNT BEFORE THE ASSESSING O FFICER, DESPITE SPECIFIC QUERIES RAISED IN THIS REGARD BY THE ASSES SING OFFICER. THE ASSESSING OFFICER NOTED THAT IN THE PRECEDING YEAR I.E. 2005-06 THE LOSS CLAIMED BY THE ASSESSEE WAS IGNORED AND THE ASSESSM ENT WAS FRAMED AT NIL INCOME. THE ASSESSING OFFICER ACCORDINGLY DIS ALLOWED THE TOTAL EXPENSES CLAIMED UNDER THE HEAD STAFF WELFARE, TRA VELING & CONVEYANCE AND BUSINESS PROMOTION TOTALING RS.1,86 ,842/-. THE CIT(A) UPHELD THE ORDER OF THE ASSESSING OFFICER IN THE ABSENCE OF ANY VERIFICATION OF EXPENSES. THE ASSESSEE IS IN APPE AL AGAINST THE SAID ORDER OF THE CIT(A). 6. ON THE PERUSAL OF RECORD I FIND THAT THE ASSESSE E HAD FILED RETURN OF INCOME DECLARING NET INCOME AT RS.51,383/-. THE AS SESSEE HAD CLAIMED THE UNDER-MENTIONED EXPENSES : 1. STAFF WELFARE RS.15993/- 2. TRAVELING & CONVEYANCE RS.163965/- 3. BUSINESS PROMOTION RS. 9284/- RS.186842/- 7. IN THE ABSENCE OF ANY DETAILS BEING FILED BY THE ASSESSEE THE AFORESAID EXPENSES WERE DISALLOWED IN TOTALITY BY T HE ASSESSING OFFICER AND UPHELD BY THE CIT(A). THE ASSESSEE HAD FILED WRITTEN SUBMISSIONS BEFORE THE CIT(A) WHICH ARE INCORPORATED UNDER PARA 5 OF THE APPELLATE 3 ORDER. IN THE SAID COMMUNICATION IT WAS INTIMATED THAT THE COMPANYS OFFICE AND FACTORY WERE CLOSED BECAUSE OF DHARNA BY THE EMPLOYEES, HOWEVER, IT WAS CLAIMED BY THE ASSESSEE THAT THE DO CUMENTS WERE FILED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE CIT(A) ALSO NOTICED THAT THE DETAILS OF TRAVELING & CONVEYANCE, STAFF WELFARE, ETC. WERE FILED ALONGWITH A CORRESPONDENCE WITH DISTT. ADMINISTRATION. IN THE FACTS OF THE CASE WHERE TH E ASSESSEE HAD FILED THE DETAILS OF THE AFORESAID EXPENSES, THERE IS NO MERI T IN DISALLOWING THE TOTAL EXPENDITURE IN THE CASE OF THE ASSESSEE AS TH E EXPENDITURE ON STAFF WELFARE AND BUSINESS PROMOTION INCLUDING TRAVELING & CONVEYANCE CANNOT BE SAID NOT TO HAVE BEEN INCURRED FOR THE PURPOSES OF CARRYING ON THE BUSINESS. IN ORDER TO MEET THE ENDS OF JUSTICE WHE RE THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS OF FURNISHING THE NECE SSARY EVIDENCE ON RECORD THE DISALLOWANCE OUT OF THE SAID EXPENSES IS RESTRICTED TO 30% OF THE TOTAL EXPENSES. THE ASSESSING OFFICER IS DIREC TED TO RECOMPUTED THE INCOME IN THE HANDS OF THE ASSESSEE AFTER MAKING AN ADDITION @ 30% OF THE TOTAL EXPENSES OF RS.1,86,842/-. THE GROUNDS O F APPEAL RAISED BY THE ASSESSEE ARE THUS PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DAY OF JUNE, 2011. SD/- (SUSHMA CHOWLA) JUDICIAL MEMBER DATED : 29 TH JUNE, 2011 RATI COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH 4 5