M/s. Bansal Alloys & Casting (P) Ltd., Muzaffarnagar V. ACIT, Muzaffarnagar

ITA 4564/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53190 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 13-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS SRUJANI MOHANTY
• Section: 43B; 40A(3); 234B

Judgement Text

ITA NO. 4564/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4564/DEL/2010 A.Y. : 2007-08 M/S BANSAL ALLOYS & CASTING PVT. LTD. 8 TH K.M. STONE, MEERUT ROAD, MUZAFFARNAGAR 251 003 (PAN : AACCB9889P) VS. ASSISTANT COMMISSIONER OF INOCME TAX, CIRCLE-2, MUZAFFARNAGAR (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. ANKIT GUPTA, ADVOCATE DEPARTMENT BY : MRS. SRUJANI MOHANTY, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 09.8.2 010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- (I) THAT THE APPEAL ORDER PASSED IS HIGHLY ARBITRA RY, UNJUSTIFIED AND AGAINST THE FACTS OF THE CASE. (II) THAT, THE LD. COMMISSIONER OF INCOME TAX (APPEAL S), MUZAFFARNAGAR WAS TOTALLY INCORRECT AND UNJUSTIFIED CONFIRMING THE ESTIMATED ADDITION ` 25,000/- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF GENERATOR RUN NING AND EXPENSES. THE ADDITION OF ` 25,000/- HAS BEEN MADE ITA NO. 4564/DEL/2010 2 TOTALLY ON PRESUMPTION AND THEREFORE MAY PLEASE BE DELETED. (III) THAT, THE LD. COMMISSIONER OF INCOME TAX (APPEA LS), MUZAFFARNAGAR WAS TOTALLY INCORRECT AND UNJUSTIFIED CONFIRMING THE ADDITION OF ` 13,595/- TO THE INCOME O F THE ASSESSEE ON ACCOUNT OF APPLYING AS PROVISIONS OF SE CTION 40A(3) OF THE INCOME TAX ACT, 1961. (IV) THAT THE ADDITION OF ` 13,596/- BY ASSESSING O FFICER AND FURTHER CONFIRMED BY THE LD. COMMISSIONER OF INCOME TA X (APPEALS), IS HIGHLY ARBITRARY, UNJUSTIFIED AND AGA INST THE FACTS OF THE CASE. THAT THE AUTHORITIES BELOW HAVE NOT PROPERLY CONSIDERED, THE DOCUMENTARY EVIDENCES (VOU CHERS AND COPIES OF BILLS) FILED IN SUPPORT OF DIESEL PURC HASED. (V) THAT THE ASSESSING OFFICER WAS TOTALLY INCORRE CT AND UNJUSTIFIED IN MAKING ESTIMATED ADDITION OF ` 50,00 0/- ON ACCOUNT OF LABOUR EXPENSES. THE EXPENSES PAID W AS AN ALLOWABLE EXPENSES AND WAS FULLY VERIFIABLE AND FU RTHER LD. COMMISSIONER OF INCOME TAX (APPEALS), MUZZAFARNAGAR W AS INCORRECT IN SUSTAINING THE SAME AT ` 20,000/-. (VI) THAT, THE ADDITION OF ` 20,000/- AS CONFIRMED B Y THE LD. COMMISSIONER OF INCOME TAX (APPEALS), IS HIGHLY ARBI TRARY, UNJUSTIFIED AND AGAINST AND AGAINST THE FACTS OF TH E CASE. LD. COMMISSIONER OF INCOME TAX (APPEALS), HAS NOT PRO PERLY CONSIDERED, THE WRITTEN SUBMISSION. (VII) THAT THE ASSESSING OFFICER WAS TOTALLY INCOR RECT AND UNJUSTIFIED IN DISALLOWING THE AMOUNT OF ` 2,664/- O N ACCOUNT ITA NO. 4564/DEL/2010 3 OF LATE PAYMENT OF ESI. THE ASSESSEE HAS PAID PAYME NT OF ESI BEFORE THE DATE OF FILING OF RETURN, ALL EXPENS ES MADE ARE COVERED FROM C.I.T. VS. ALOM EXTRUSIONS LTD., (2009) 319 ITR 306 (SC) AND C.I.T. VS. ANZ. INFORMATION TECHNOLOGY P. LTD. (2009) 318 ITR 123 (KARN.). (VIII) THAT, IN THE ALTERNATIVE ADDITIONS MADE AND C ONFIRMED BY LD. COMMISSIONER OF INCOME TAX (APPEALS) ARE HIGHLY EXCESSIVE. (IX) THAT, THE INTEREST U/S 234A, 234B AND 234C OF INCOME TAX ACT, 1961 HAS WRONGLY BEEN CHARGED. (X) THAT, THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR VARY FROM THE ABOVE FACTS / GROUNDS OF APPEAL. 3. IN THIS CASE ASSESSEE COMPANY WAS RUNNING COLD S TORAGE UNIT. ASSESSEE HAD CLAIMED GENERATOR RUNNING EXPENSE OF ` 2,55,415/-. ASSESSING OFFICER OBSERVED THAT IT WAS ABNORMALLY HIGH AS COMPARED TO PREVIOUS EXPENSES ` 1,26,867/-. ASSESSING OFFIC ER FURTHER FOUND THAT EXPENSES HAVE BEEN INCURRED IN CASH AND THE A SSESSEE HAS NOT MAINTAINED PROPER BILLS AND VOUCHER. THEREFORE, TH E ASSESSING OFFICER MADE THE ADHOC DISALLOWANCE OF 25,000/-.. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT DISALLOWANCE HAS BEEN MADE ON THE GROUND T HAT PROPER BILLS AND VOUCHER ETC. ARE NOT BEING MAINTAINED AND THERE HAS BEEN SHARP INCREASE IN THE EXPENDITURE. IN OUR CONSIDERED OP INION, THERE IS NO ITA NO. 4564/DEL/2010 4 INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE AND HENCE, WE AFFIRM THE SAME. 6. ASSESSING OFFICER FURTHER NOTED THAT THE EXPENS ES HAVE BEEN MADE IN CASH IN EXCESS OF ` 20,000/- IN CONTRAVENTI ON OF THE PROVISION OF SECTION 40A(3) OF THE IT ACT, 1961. ASSESSING O FFICER GAVE THE DETAILS IN THIS REGARD OF THREE EXPENSE OF ` 67,975 /-. ASSESSING OFFICER DISALLOWED 1/5 TH OF THE SAME I.E. ` 13,595/- U/S 40A(3) OF THE IT AC T. 7. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION. 8. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 9. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT DISALLOWANCE HAS BEEN MADE IN THIS REGARD FOR CONTRAVENTION OF PROVISION OF SECTION 40A(3) OF THE IT ACT. IN OUR CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDERS OF THE AUTHOR ITIES BELOW ON THIS ISSUE. HENCE, WE AFFIRM THE SAME. 10. ASSESSING OFFICER FURTHER NOTED THAT ASSESSEE HAS CLAIMED LABOUR EXPENSES OF 4,06,536/-. ASSESSING OFFICER NOTED THAT ASSESSEE HAS NOT MAINTAINED ANY BILLS / VOUCHERS OF THE LABOUR E XPENSES INCURRED. THE ASSESSEE STATED THAT IT WAS PRACTICALLY NOT POS SIBLE TO MAINTAIN THE BILLS / VOUCHERS OF THE LABOUR EXPENSES. THE LABOU R EXPENSES HAVE BEEN INCURRED IN CASH ONLY. ASSESSING OFFICER OBS ERVED THAT EXPENSES CANNOT BE VERIFIED. ASSESSING OFFICER MADE THE DIS ALLOWANCE OF ` 50,000/- IN THIS REGARD. 11. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE DISALLOWANCE TO ` 20,000/- AND GRANTED THE RELIEF OF ` 30,000/-. ITA NO. 4564/DEL/2010 5 12. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPE AL BEFORE US. 13. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE DISALLOWANCE HAS BEEN MADE BECAUSE OF LACK OF PROPER MAINTENANCE OF BILLS AND VOUCHERS. IN OUR CONSIDERED OPINION, LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS PASSED A WE LL-REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR P ART. ACCORDINGLY, WE UPHOLD THE SAME. 14. ASSESSING OFFICER FURTHER NOTED THAT ASSESSEE HAS PAID ` 2664/- ON ACCOUNT OF ESI DEDUCTED AND DEPOSITED FOR THE MO NTH OF JULY AND SEPTEMBER, 2006 BEYOND THE DUE DATES. HENCE, HE MADE THE DISALLOWANCE OF ` 2664/- U/S 43B OF THE IT ACT. 15. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION. 16. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPE AL BEFORE US. 17. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ESI DEDUCTION WERE DEPOSITED BEFORE THE FILING OF THE RETURN IN THIS C ASE AND ON THE ANVIL OF THE HONBLE APEX COURT DECISION IN THE CASE OF C.I. T. VS. ALOM EXTRUSIONS LTD. 319 ITR 306 THE PAYMENT MADE BEFORE F ILING OF RETURN IS ALLOWABLE U/S 43B. 18. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. WE FIND THAT THE CLAIM OF THE ASSESSEE IN THIS REGARD NEEDS VERIFIC ATION AT THE LEVEL OF THE ASSESSING OFFICER. WE ACCORDINGLY, REMIT THE IS SUE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE VERACITY OF THE C LAIM MADE BY THE ASSESSEE, IN LIGHT OF THE AFORESAID HONBLE APEX C OURT DECISION. ITA NO. 4564/DEL/2010 6 19. IN THE RESULT, THE ASSESSEES APPEAL STANDS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18/11/2011. SD/- SD/- [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 18/11/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES