Bhagirath Mal Prop. Sahiram Ramchander, HANUMANGARH V. ITO, HANUMANGARH

ITA 443/JODH/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54366 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 20-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Commercial expediency

Judgement Text

1 ITA 443-10 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH SMC JODHPUR. ( BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER ) ITA NO. 443/JODH/2010 ASSTT. YEAR : 2007-08. SHRI RATAN LAL, VS. THE INCOME-TAX OFFICER, L/H LATE BHAGIRATH MAL, PROP. SAHIRAM WARD-1, RAMCHANDER, HANUMANGARH TOWN. HANUMANGARH. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI MAHESH KUMAR DATE OF HEARING : 01.12.2011. DATE OF PRONOUNCEMENT : 09.12.2011. ORDER DATED : 09.12.2011. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. THROUGH GROUND NO.1 THE ASSESSEE IS OBJECTING IN CONFIRMING ADHOC DISALLOWANCE OF RS. 10,000/- OUT OF VARIOUS EXPENSES CLAIMED BY THE ASSESSEE. 3. THE ASSESSING OFFICER DISALLOWED VARIOUS EXPENSE S I.E. ON ACCOUNT TELEPHONE EXPENSES OUT OF INDIRECT EXPENSES TOTALING TO RS. 5 2,911/-. THE LD. CIT (A) AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERI AL ON RECORD, SUSTAINED AN ADDITION OF RS. 10,000/-. THE LD. CIT (A) RESTRICTED THE ADDIT ION AT 1/10 TH AGAINST 1/5 TH DISALLOWED BY ASSESSING OFFICER ON ACCOUNT OF VARIOUS EXPENSES. 2 4. AFTER CONSIDERING SUBMISSIONS, I FIND NO UNREASO NABLENESS ON THE PART OF LD. CIT (A) WHO RESTRICTED THE DISALLOWANCE AT 1/10 TH OF THE TELEPHONE EXPENSES. ACCORDINGLY, I CONFIRM THE SAME. 5. NEXT GROUND IS AGAINST DISALLOWANCE OF RS. 30,00 0/- OUT OF INTEREST EXPENSES ON LUMP SUM BASIS. 6. THE LD. CIT (A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING THAT THIS IS NOT A VALID REASON THAT IN PAST NO DIS ALLOWANCE WAS MADE. 7. AFTER CONSIDERING THE ORDERS OF THE ASSESSING OF FICER AND LD. CIT (A), I FIND THAT ASSESSEE DESERVES TO SUCCEED IN THIS GROUND. THE A SSESSEE HAS HIS OWN FUNDS WHICH WAS AVAILABLE FOR ADVANCING INTEREST FREE. IT IS FURTH ER SEEN THAT ON THE ADVANCES GIVEN NO INTEREST HAS BEEN CHARGED FOR COMMERCIAL EXPEDIENCY AND, THEREFORE, IN MY VIEW LUMP SUM DISALLOWANCE ON ACCOUNT OF INTEREST IS NOT JUST IFIED. ACCORDINGLY THIS GROUND OF THE ASSESSEE IS ALLOWED. 8. NEXT GROUND IS AGAINST SUSTAINING ADDITION OF RS . 44,035/- MADE ON THE REASON OF INTEREST HAVING ACCRUED TO APPELLANT FROM M/S. UNIT ED BREWERIES LTD. 9. THE ASSESSEE IS MAINTAINING MERCANTILE SYSTEM OF ACCOUNTING AND HAS CLAIMED TDS ON INTEREST. ASSESSEE EXPLAINED THAT IT WAS A TRADE DEALING WHERE ASSESSEE WAS SENDING BARELY AFTER PURCHASE TO THE SAID PARTY WHO DID NOT SETTLE THE ACCOUNT AND ASSESSEE CREDITED THE AMOUNT OF RS. 55,209/- AS INTEREST NEX T YEAR INCLUDING RS. 44,035/- OF THIS YEAR, WAS NOT ACCEPTED BY THE ASSESSING OFFICER. A CCORDINGLY THIS ADDITION WAS MADE. THE LD. CIT (A) HAS CONFIRMED THE ACTION OF THE ASS ESSING OFFICER. 10. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, I FIND THAT IN THIS GROUND THE ASSESSEE DESERVES TO SUCCEED. I T IS SEEN THAT ASSESSEE HIMSELF HAS 3 CREDITED THIS AMOUNT IN SUBSEQUENT YEAR AS THERE WA S A TRADE DEALING. WHEN ASSESSEE DID NOT RECEIVE THE AMOUNT IN TIME THEN HE CHARGED INTE REST AND CREDITED IN THE NEXT YEAR. THEREFORE, IN MY VIEW, THERE SHOULD NOT BE ANY ADDI TION FOR THE YEAR UNDER CONSIDERATION. OTHERWISE, IT WILL TANTAMOUNT TO DOUBLE ADDITION. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 11. NEXT ISSUE IS AGAINST ESTIMATING COST OF CONSTR UCTION AT RS. 3,62,246/- ON THE BASIS OF DVOS REPORT AGAINST RS. 2,77,100/- SHOWN BY ASS ESSEE. 12. ON ACCOUNT OF COST OF CONSTRUCTION ON THE BASIS OF DVOS REPORT, AN ADDITION OF RS. 85,146/- WAS MADE ON THE BASIS OF DIFFERENCE OF COST SHOWN BY ASSESSEE AND THE COST ADOPTED BY THE DVO. THE CLAIM OF THE ASSESSEE FOR SELF SUPERVISION AND VARIATION OF CPWD PLINTH AREA RATE WAS NOT FOUND SATISFACTORY BY THE ASSESSING OFFICER AND, THEREFORE, ADDITION WAS MADE. THE LD. CIT (A) HAS ALSO CONFIRMED THE ADDITION. 13. THE CONTENTION OF THE ASSESSEE HERE BEFORE THE TRIBUNAL IS THAT THERE WAS NO COMPLETE BILLS/RECORDS OF CONSTRUCTION, THEREFORE, THE MATTER SHOULD NOT HAVE BEEN SENT TO THE DVO. IT WAS FURTHER STATED THAT THE CPWD PLINT H AREA RATE SHOULD BE ADOPTED. IT WAS ALSO MENTIONED THAT THE DEDUCTION ON ACCOUNT OF SELF SUPERVISION @ 25% TO 30% SHOULD BE ALLOWED. 14. ON THE OTHER HAND, THE LD. D/R HAS PLACED RELIA NCE ON THE ORDERS OF THE ASSESSING OFFICER AND LD. CIT (A). 15. AFTER CONSIDERING THE ORDERS OF THE ASSESSING O FFICER AND LD. CIT (A), I FIND THAT THIS IS A CASE OF CONSTRUCTION. THERE MAY BE CERTAI N DEFICIENCY ON THE PART OF THE ASSESSEE ALSO. KEEPING IN MIND THE ASPECT OF SELF SUPERVISIO N AND CPWD PLINTH AREA RATE, I FEEL 4 THAT IF AN ADDITION OF RS. 40,000/- IS SUSTAINED, T HAT WILL MEET THE ENDS OF JUSTICE. I ORDER ACCORDINGLY. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. 17. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09 .12.2011. SD/- ( R.K. GUPTA ) JUDICIAL MEMBER JODHPUR, COPY FORWARDED TO :- SHRI RATAN LAL L/H LATE BHAGIRATH MAL, HANUMANGARH TOWN. THE ITO WARD-1, HANUMANGARH. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 443/JODH/2010) BY ORDER, AR ITAT JODHPUR.