Gautam Khanna., Kolkata V. I.T.O Wd - 32(1),kolkata., Kolkata

ITA 45/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78446 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 07-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K K GOSWAMI
• Keywords: Depreciation; Reasonable cause
• Section: 37(1)

Judgement Text

I.T.A. NO. 45/KOL./2013 ASSESSMENT YEAR: 2008-2009 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI P.K. BANSAL (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 45/KOL./ 2013 ASSESSMENT YEAR : 2008-2009 GAUTAM KHANNA,..................................... .................................APPELLANT PROP. M/S. Y.P. CHEMICALS, 75C, PARK STREET, 11 TH FLOOR, SUIT NO. 3, KOLKATA-700 016 [PAN : AFAPK 1178 A] -VS.- INCOME TAX OFFICER,................................ .................................RESPONDENT WARD-32(1), KOLKATA, 10B, MIDDLETON ROW, KOLKATA-700 071 APPEARANCES BY: SHRI K.K. GOSWAMI, ADVOCATE, FOR THE ASSESSEE SHRI P.K. CHAKRABORTY, JCIT, SR. D.R., FOR THE DEPA RTMENT DATE OF CONCLUDING THE HEARING : JULY 31, 2014 DATE OF PRONOUNCING THE ORDER : JULY 31, 2014 O R D E R PER GEORGE MATHAN: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XIX, KOLKATA I N APPEAL NO.100/CIT(A)-XIX/ITO, WD.32(1)/KOL/10-11 DATED 24. 11.2011 FOR THE ASSESSMENT YEAR 2008-09. 2. SHRI K.K. GOSWAMI, ADVOCATE, REPRESENTED ON BEHA LF OF THE ASSESSEE AND SHRI P.K. CHAKRABORTY, LD. JCIT, SR. D.R., REPR ESENTED ON BEHALF OF THE REVENUE. I.T.A. NO. 45/KOL./2013 ASSESSMENT YEAR: 2008-2009 PAGE 2 OF 4 3. IN THE ASSESSEES APPEAL, THE ASSESESE HAS RAISE D THE FOLLOWING GROUNDS:- (1) THAT THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN DISPOSING OF THE APPEAL EX-PARTE ON THE GROUND THAT IN RESPONSE TO THE NOTICES ISSUED THERE HAD BEEN NO COMPLIANCE BY THE APPELLANT. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT NO SUCH NOTICES WERE EVER SERVED ON THE APPELLANT, AS THE R EGISTERED OFFICE WAS CLOSED DOWN AT THE ADDRESS WHERE THE NOT ICE WAS SERVED. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, APPELLANT WAS PREVENTED BY REASONABLE CAUSE IN NOT ATTENDING THE APPELLATE PROCEEDINGS BEFORE HON. CIT(A)-XIX, K OLKATA. (3) THAT THE LEARNED CIT(A) IS WRONG AND UNJUSTIFIE D IN DISPOSING OF THE APPEAL IN A SUMMARY MANNER WITHOUT ALLOWING SUFFICIENT OPPORTUNITY TO THE APPELLANT. (4) THAT THE LD. CIT(A) IS WRONG AND UNJUSTIFIED IN CONFIRMING THE FOLLOWING DISALLOWANCES MADE BY LD. AO ON THE E STIMATE BASIS: 10% OF RS.1,80,194/- I.E. RS.18,000/- ON EXPENDITUR ES INCURRED TOWARDS DELIVERY CHARGES; RS.32,065/- ON ACCOUNT OF PAYMENT OF SUBSCRIPTION A ND DONATION AS PER U/S 37(1) OF THE I.T. ACT, 1961; 10% ON RS.2,21,595/- I.E. RS.22,160/- ON ACCOUNT OF EXPENDITURES INCURRED ON ACCOUNT OF CAR EXPENSES AN D CAR DEPRECIATION. 10% ON RS.4,15,608/- I.E. RS.41,560/- ON ACCOUNT OF EXPENDITURES INCURRED UNDER LABOUR CHARGES; 10% ON RS.1,53,125/- I.E. RS.15,310/- ON ACCOUNT OF EXPENDITURES INCURRED TOWARDS USAGE OF TELEPHONE; 10% ON RS.2,79,334/- I.E. RS.27,930/- ON ACCOUNT OF MISCELLANEOUS EXPENSES. 4. AT THE TIME OF HEARING, IT WAS THE SUBMISSION TH AT IN THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAD DISALLOWED 10 % OUT OF THE VARIOUS EXPENSES HOLDING THAT THE PAYMENTS WERE MADE IN CAS H AND WERE NON- VOUCHED. IT WAS THE SUBMISSION THAT THE LD. CIT(APP EALS) HAD CONFIRMED THE ESTIMATED DISALLOWANCES AT 10%. IT WAS THE SUBM ISSION THAT THE I.T.A. NO. 45/KOL./2013 ASSESSMENT YEAR: 2008-2009 PAGE 3 OF 4 DISALLOWANCES MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LD. CIT(APPEALS) MAY BE DELETED. IT WAS THE SUBMISSION THAT THE ASSESSEE IS IN THE BUSINESS OF SELLING OF AMMONIA CYLINDERS. IT WAS THE SUBMISSION THAT THE DELIVERY CHARGES HAD TO BE PAID IN CASH. I T WAS THE FURTHER SUBMISSION THAT THE PAYMENTS OF DONATION & SUBSCRIP TION WERE MADE TO VARIOUS RELIGIOUS AND CULTURAL ORGANIZATIONS. THE C AR EXPENSES REPRESENTING THE PETROL EXPENSES AND MAINTENANCE EX PENSES HAD TO BE PAID IN CASH, SAME ALSO FOR THE LABOUR CHARGES, TEL EPHONES EXPENSES AND OTHER MISCELLANEOUS EXPENSES. IT WAS THE SUBMISSION THAT THE ADDITIONS MAY BE DELETED. 5. IN REPLY, LD. D.R. VEHEMENTLY SUPPORTED THE ORDE R OF THE ASSESSING OFFICER AND LD. CIT(APPEALS). IT WAS THE SUBMISSION THAT THE DISALLOWANCES WERE REASONABLE AND SHOULD NOT BE DELETED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ASSESSMENT ORDER SHOWS THAT THE DISALLOWANCES HAD B EEN MAINLY MADE BECAUSE THESE EXPENSES HAVE BEEN INCURRED IN CASH. ADMITTEDLY THE EXPENSES WHICH HAVE BEEN PARTLY DISALLOWED BY THE A SSESSING OFFICER COULD NOT BE PAID IN ANY OTHER MODE OTHER THAN CASH . FURTHER, THE BOOKS OF ACCOUNTS OF THE ASSESSEE HAVE BEEN ACCEPTED AND NO DEFECT HAS BEEN FOUND. ALSO NO COMPARISON WITH THE EARLIER YEARS E XPENSES OR ANY ALLEGATION OF EXCESSIVE EXPENDITURE BEING CLAIMED I S THERE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE DISALLOW ANCE AT AD HOC FIGURE OF 10% IN RESPECT OF THE EXPENSES IS NOT PERMISSIBL E. HOWEVER, THE DISALLOWANCE ON ACCOUNT OF THE PAYMENT OF SUBSCRIPT ION AND DONATION, AS THE SAME AS NOT FOR THE PURPOSE OF BUSINESS IS ON T HE RIGHT FOOTING. IN THESE CIRCUMSTANCES, THE ADDITION MADE BY THE ASSES SING OFFICER AND SUSTAINED BY THE LD. CIT(APPEALS) OF THE AMOUNT OF RS.32,065/- STANDS CONFIRMED ON ACCOUNT OF THE PAYMENT OF SUBSCRIPTION S AND DONATIONS. THE OTHER DISALLOWANCES REPRESENTING 10% OF THE DELIVER Y CHARGES, CAR I.T.A. NO. 45/KOL./2013 ASSESSMENT YEAR: 2008-2009 PAGE 4 OF 4 EXPENSES AND CAR DEPRECIATION, LABOUR CHARGES, TELE PHONE EXPENSES AND MISCELLANEOUS EXPENSES STAND DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2014. SD/- SD/- P.K. BANSAL GEORGE MATHAN (ACCOUNTANT MEMBER) (JU DICIAL MEMBER) KOLKATA, THE 31 ST DAY OF JULY, 2014 COPIES TO : (1) GAUTAM KHANNA, PROP. M/S. Y.P. CHEMICALS, 75C, PARK STREET, 11 TH FLOOR, SUIT NO. 3, KOLKATA-700 016 (2) INCOME TAX OFFICER, WARD-32(1), KOLKATA, 10B, MIDDLETON ROW, KOLKATA-700 071 (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.