Sharmila Yatin Palkar, Pune V. Assistant Commissioner of Income tax, Pune

ITA 447/PUN/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3902 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 22-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: HARI KRISHAN
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, A CCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / I TA NO. 447 /PUN/20 1 7 / ASSESSMENT YEAR : 20 1 3 - 1 4 SMT. SHARMILA YATIN PALKAR FLAT NO.6, SECOND FLOOR, MAHAVIR BLESSINGS, PLOT NO.613, SECTOR NO.25, PCNTDA, NIGDI, PUNE 411044 PAN: A OKPP8981R ....... / APPELLANT / V/S. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 9, PUNE / RESPONDENT A SSESSEE BY : SHRI HARI KRISHAN REVENUE BY : SHRI S.P. WALIMBE / DATE OF HEARING : 0 2 .0 3 .2020 / DATE OF PRONOUNCEMENT : 03 .0 3 .2020 / ORDER PER D. KARUNAKARA RAO , A M : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 3 , PUNE , DATED 2 4 . 0 1 .2017 FOR THE ASSESSMENT YEAR 20 1 3 - 1 4 . 2. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CARRIED ON THE BUSINESS OF SALES AND PROMOTION 2 ITA NO. 447 /PUN/20 1 7 SMT. SHARMILA YATIN PALKAR FOR THE INVESTMENT POLICIES OF SAI PRASAD GROUP COMPANIES AND SHE EARNED COMMISSION FROM THE SAID ACTIVITY . THE ASSESSEE FILED THE RETURN OF INCOME ON 30.10.2013 DECLARING TOTAL INCOME OF RS.65,65,480/ - . THE ASSESSING OFFICER PASSED ASSESSMENT ORDER U/S 144 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) . THE AO MADE VARIOUS ADDITIONS AND DETERMIN ED THE TOTAL INCOME OF THE ASSESSEE AT RS.1,04,85,530/ - . 3. IN THE FIRST APPELLATE PROCEEDINGS, THE LD. CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER . 4 . AGGRIEVED WITH THE ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS: - THE FOLLOWING GROUNDS OF APPEAL ARE TAKEN INDEPENDENTLY AND WITHOUT PREJUDICE TO ONE ANOTHER. 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DISMISSING THE APPEAL OF THE ASSESSEE. 2 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN HOLDING THAT THE ASSESSEE'S ARGUMENTS ARE TOO UNREALISTIC AND UNBELIEVABLE FOR ITS ACCEPTANCE. 3 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DISMISSING THE ASSESSEE'S PRAYER THAT THE ASSESSING OFFICER BE DIRECTED TO GET THE BIL LS AND VOUCHERS AND OTHER EVIDENCES, IN SUPPORT OF THE ASSESSEE'S EXPLANATIONS AGAINST THE ADDITIONS /DISALLOWANCE MADE BY THE ASSESSING OFFICER, FROM M /S SAI PRASAD GROUP OF COMPANIES WHO WERE THE PRINCIPLES OF THE ASSESSEE AND FOR WHOM THE ASSESSEE WAS WORKING AS AN AGENT FOR SALE AND PROMOTION OF THE INVESTMENT POLICIES OF THE GROUP, AND THE ASSESSEE WAS UNABLE TO PRODUCE THE SAID BILLS AND VOUCHERS AND OTHER EVIDENCES IN SUPPORT OF HER EXPLANATIONS, BECAUSE THE PREMISES OF M/S SAI PRASAD GROUP OF COMPA NIES HAVE BEEN SEALED BECAUSE OF SEBI AND POLICE ACTION ON THE GROUP. 4 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.10,00,000/ - MADE BY THE ASSESSING OFFICER OUT OF THE BUSINESS - DEVELOPMENT EXPENSES. 5 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,50,000/ - MADE BY THE ASSES SING OFFICER OUT OF THE VEHICLE EXPENSES . 3 ITA NO. 447 /PUN/20 1 7 SMT. SHARMILA YATIN PALKAR 6 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.2,00,000/ - MADE BY THE ASSESSING OFFICER OUT OF HOTELS, MEET INGS AND TRAVELLING EXPENSES. 7 . ON THE FARTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.17,27,418/ - MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME TAX ACT, 196 1. 8 . ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CA SE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DISMISSING THE ASSESSEE'S GROUND AGAINST THE ADDIT ION OF RS.8,42,630/ - IN RESPECT OF SALE OF GOLD JEWELLERY IN THE ABSENCE_OF EVI DENCE WITH REGARD TO THE SALE AND ITS CORRESPONDING PURCHASE. 5 . BEFORE US, LD. COUNSEL BROUGHT OUR ATTENTION TO THE ABOVE REFERRED GROUNDS AND SUBMITTED THAT GROUND NOS.1 TO 3 ARE ARGUMENTATIVE OR GENERAL. HOWEVER, LD. AR SUBMITTED THE SAID GROUNDS REVO LVE AROUND THE ADDITIONS AGITATED IN GROUNDS 4 TO 8 OF THE APPEAL . 6. ON HEARING THE LD. COUNSEL ON THIS, WE FIND THE SAID GROUNDS ARE GENERAL OR ARGUMENTATIVE IN NATURE. ACCORDINGLY, THEY ARE DISMISSED AS SUCH . 7 . REFERRING TO GROUND NOS.4 TO 6, LD. COUNSEL SUBMITTED THE ASSESSING OFFICER MADE DISALLOWANCES ON ADHOC BASIS ON ACCOUNT OF BUSINESS DEVELOPMENT EXPENSES (GROUND NO.4), VEHICLE EXPENSES (GROUND NO.5), TRAVELLING , MEETINGS AND HOTEL EXPENSES (GROUND NO.6) . THE LD. COUNSEL MENTIONED THAT THE ASSESSING OFFICER HAS NOT FOLLOWED ANY REASONING OR LOGIC IN MAKING ADHOC DISALLOWANCES. WHEN A QUESTION IS RAISED BY THE BENCH ON THE EVIDENCES, T HE LD. COUNSEL MENTIONED THE BENCH MAY DECIDED APPROPRIATE AMOUNT FOR DISALLOWANCE. HOWEVER, IN THIS REGARD THE LD. COUNSEL MENTIONED THE ASSESSEE EARNED COMMISSION INCOME OF AROUND RS.1.95 CRORES AND THE SAME WAS OFFERED TO TAX. FURTHER, LD. COUNSEL MENTIONED THE ASSESSEE WAS ENGAGED IN BUSINESS PROMOTION AND THE FIELD DEVELOPMENT ACTIVITIES AND 4 ITA NO. 447 /PUN/20 1 7 SMT. SHARMILA YATIN PALKAR EARNED ABOVE SAID COMMISSION INCOME. THE LD. COUNSEL ALSO MENTIONED THAT NOMINAL SUM MAY BE DISALLOWED ON THESE ACCOUNTS WITHOUT SPECIFYING ACCOUNT - WISE DISALLOWANCE. HE ALSO MENTIONED WHATEVER DISALLOWANCE NOW MADE MAY NOT BECOME THE PRECEDENT FOR THE LATER ASSESSME NT YEARS, IF ANY. 8 . ON HEARING BOTH THE SIDES ON THE GROUND S AT NOS.4 TO 6, WE ARE OF THE OPINION THAT ADHOCISM IN MATTERS OF DISALLOWANCES IS NOT APPROPRIATE. AO SHOULD NOT BE ARBITRARY WHEN ADHOC DISALLOWANCES ARE MADE. REASONABILITY NEEDS TO BE DEMONSTRATED. CONSIDERING THE SAME, WE ARE OF THE OPINION TO RESTRICT ING THE DISALLOWANCE TO 50% OF THE DISALLOWED AM OUNT S OF I.E. ( RS. 10,00,000/ - + RS.1,50,000/ - + RS.2,00,000/ - ) RS.13,50,000/ - SHOULD BE REASONABLE AND FAIR . ACCORDINGLY, WE RESTRICT THE DISALLOWANCE TO RS.6,75,000/ - . THUS, GROUND NOS.4 TO 6 ARE PARTLY ALLOWED. 9. REGARDING THE GROUND S AT NOS.7 AND 8, LD. COUNSEL MENTIONED THAT THE ASSESSEE FAILED TO PROVIDE EVIDENCES TO THE AO AT THE RELEVANT POINT OF TIME DUE TO CRIMINAL CHARGES LEVELLED AGAINST THE ASSESSEE. RIGHT NOW, THE ASSESSEE IS ON BAIL. AS PER LD. AR, IF AN OPPORTUNITY IS GRANTED TO THE ASS ESSEE, REQUISITE EVIDENCES SHALL BE FURNISHED BEFORE THE AO. HE ACCORDINGLY MADE A PRAYER FOR REMANDING OF THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION. 10. ON HEARING BOTH SIDES, WE ARE OF THE OPINION THAT THE ASSESSEE WAS PREVENTED FROM FILING EVIDENCES IN THE PAST DUE TO THE SCAM RELAT ED CRIMINAL PROCEEDINGS . ON FINDING MERIT IN THE ARGUMENT OF LD. COUNSEL, WE ARE OF THE OPINION THAT FOR THE ISSUES RAISED IN GROUND NOS.7 AND 8, NECESSARY FACTS WERE NOT AVAILABLE ON RECORD TO TAKE A DECISION. ACCORDINGLY, THE ASSESSING OFFICER 5 ITA NO. 447 /PUN/20 1 7 SMT. SHARMILA YATIN PALKAR IS DIRECTED TO E NTERTAIN THE EVIDENCES IF ANY, FOLLOWING THE DUE PROCESS OF LAW . THE ASSESSING OFFICER SHALL MAKE USE OF THEM AND ADJUDICATE THE ISSUES AS PER LAW. THE ASSESSEE IS AT LIBERTY TO FILE THE NECESSARY PAPERS. THUS, THE GROUND NOS.7 AND 8 ARE ALLOWED FOR STATISTICAL PURPOSES. 11 . IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED I N THE OPEN COURT ON 3 RD MARCH , 2020. SD/ - SD/ - S.S. VISWANETHRA RAVI D. KARUNAKARA RAO JUDICIAL MEMBER ACCOUNTANT MEMBER / PUNE; / DATED : 3 RD MARCH , 2020. GCVSR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT 3. THE CIT (APPEALS) - 1 3 , PUNE . 4. THE PR. CIT - 5 , PUNE . 5. , , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // // TRUE COPY// / SR. PRIVATE SECRETARY , / ITAT, PUNE