M/s. Malhotra Book Depot, Jalandhar V. The Assistant Commissioner of Income tax, Jalandhar

ITA 461/ASR/2010

• Counselvise Citation: 46120914 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-05-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 06-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.461(ASR)/2010 ASSESSMENT YEAR:2003-04 PAN:AABFM2169D M/S. MALHOTRA BOOK DEPOT, VS. ASSTT. COMMR. OF INCO ME TAX, MBD HOUSE, JALANDHAR. RANGE-IV, JALANDHAR. (APPELLANT) (RESPONDENT) I.T.A. NO.462(ASR)/2010 ASSESSMENT YEAR:2003-04 PAN:AABFM2169D DY. COMMR. OF INCOME TAX, VS. MALHOTRA BOOK DEPOT, CENTRAL CIRCLE II, JALANDHAR. MBD HOUSE, JALANDHAR . (APPELLANT) (RESPONDENT) ASSESSEE BY: SH. SUDHIR SEHGAL, ADV. DEPARTMENT BY:SH. TARSEM LAL, DR DATE OF HEARING :24/05/2012 DATE OF PRONOUNCEMENT:01/06/2012 ORDER PER BENCH: THESE CROSS APPEALS OF THE ASSESSEE AND THE REVENUE ARISE FROM THE ORDER OF THE CIT(A), JALANDHAR, DATED 28.09.2010 F OR THE ASSESSMENT YEAR 2003-04. ITA NO. 461 & 462(ASR)/2010 ASSTT. YEAR 2003-04 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING 50% ADDITION OF RS.2,50,262/- OUT OF STIPEND ACCOUNT WHICH IS WITHO UT ANY LOGIC AND BASIS. 2. THAT CONFIRMING ADDITION OF RS.20,000/- OUT OF T ELEPHONE EXPENSES IS WRONG AND ILLEGAL. 3. THAT ADDITION OF RS.50,000/- OUT OF VEHICLE RUNN ING & MAINTENANCE EXPENSES IS WRONG AND WITHOUT ANY TEST. 4. THAT ADDITION OF RS.10,000/- OUT OF TRAVELING EX PENSES IS WRONG AND WITHOUT ANY JUSTIFICATION. 5. THAT SUSTAINING OF ADDITION OF RS.25,000/- ON AC COUNT OF BILLS AND VOUCHER IS INCORRECT. 6. THAT CONFIRMING THE ADDITION OF RS.10,038/- ON A CCOUNT OF BILLS FOR FINANCIAL YEAR 2001-02 RECEIVED IN FINANCIAL YE AR 2002-03 IN RESPECT OF TELEPHONE, WATER, ELECTRICITY AND ADVERT ISEMENT ARE WRONG AND WITHOUT ANY JUSTIFICATION. 7. THAT ORDER IS AGAINST LAW AND FACTS OF THE CASE. 8. THAT PROPER OPPORTUNITY SHOULD HAVE BEEN ALLOWED . 9. ANY OTHER GROUND PRESSED AT THE TIME OF HEARING. 3. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. THAT THE LD. CIT(A) HAS ERRED BOTH IN LAW AND O N FACTS OF THE CASE IN REDUCING BY 50% OF THE ADDITION FOR RS.5,00 ,000/- MADE BY THE AO ON ACCOUNT OF NON-PRODUCTION OF BILLS/VOU CHERS SUPPORTING THE CLAIM OF EXPENSES MADE ON THE PAYMEN T OF STIPEND. 2. THAT THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN REDUCING AN ADDITION OF RS.1,33,124/- MADE BY THE A.O. ON ACCOUNT OF PERSONAL USE OF TELEPHONE TO RS.20,00 0/-. 3. THAT THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN REDUCING ADDITION OF RS.2,00,000/- MADE BY THE AO OUT OF THE VEHICLE MAINTENANCE AND RUNNING EXPENSES TOW ARDS PERSONAL USE THEREOF, TO RS.50,000/-. 4. THAT THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN REDUCING AN ADDITION OF RS.3,00,000/- MADE BY THE AO ON ACCOUNT OF NON PRODUCTION OF BILLS/VOUCHERS REGA RDING CLAIM OF TRAVELING EXPENSES TO RS.10,000/-. ITA NO. 461 & 462(ASR)/2010 ASSTT. YEAR 2003-04 3 5. THAT THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN REDUCING AN ADDITION OF RS.2,00,000/- MADE BY THE AO OUT OF EXPENSES OF PALWAL UNIT, FOR WANT OF PROPER BILLS/VOUCHERS TO RS.25,000/-. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL ON OR BEFORE THE APPEAL IS HEARD AND DISPOSE D OFF. 7. IT IS PRAYED THAT THE ORDER OF THE CIT(A) BE SET -ASIDE AND THAT OF THE A.O. BE RESTORED. 4. IN GROUND NO.1 OF THE ASSESSEE AND IN GROUND NO. 1 OF THE REVENUE, THE BRIEF FACTS ARE THAT THE ASSESSE HAD CLAIMED AN EXPENDITURE IN THE STIPEND ACCOUNT. THE ASSESSE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF PAYMENTS RECORDED UNDER THIS HEAD. THE AO OBSERVED THAT SINC E THE ASSESSEE HAD FILED NO DETAILS AS TO WHOM THE SAID STIPEND WAS PAID WHE THER IT IS INCIDENTAL TO THE BUSINESS ACTIVITIES OF THE ASSESSEE AND WHEN THE SA ID AMOUNT WAS PAID, THE AO DISALLOWED THE WHOLE AMOUNT OF RS.5,00,523/-. 5. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAD PR ODUCED THE BOOKS OF ACCOUNT, BUT NO DETAILS OF THE PERSONS TO WHOM THE MONEY HAD BEEN PAID FOR THE PURPOSE OF PAYMENT WAS PRODUCED BY THE ASSESSEE . AS REGARDS THE RELIANCE IN ASSESSES OWN CASE FOR THE ASSESSMENT Y EAR 2001-02 DECIDED BY THE TRIBUNAL IS DIFFERENT TO THE FACTS OF THE PRESE NT CASE. SINCE IN THE CASE OF THE ASSESSEE DURING THE ASSESSMENT YEAR 2001-2002, THE ASSESSEE HAD PRODUCED REGISTER SHOWING PAYMENTS GIVEN TO THE IND IVIDUAL WORKERS. THE EVIDENCE IN THE FORM OF PAYMENT VOUCHERS AND REGIST ER OF EMPLOYMENT WERE SUBMITTED BEFORE THE AO DURING THE COURSE OF ASSESS MENT PROCEEDINGS. IN THE ITA NO. 461 & 462(ASR)/2010 ASSTT. YEAR 2003-04 4 PRESENT CASE, NO EVIDENCE IN SUPPORT OF STIPEND PAY MENTS WERE PRODUCED DURING ASSESSMENT PROCEEDINGS. AS PER PAST HISTORY OF THE CASE, WHERE STIPEND HAS BEEN PAID AND BEING ALLOWED AS DEDUCTIO N, THE LD. CIT(A) CONSIDERED IT FAIR AND REASONABLE TO DISALLOW 50% O F THE EXPENDITURE CLAIMED BY THE ASSESSEE IN THE ABSENCE OF EVIDENCE IN SUPPORT OF THE CLAIM OF THE ASSESSEE AND ALLOWED THE REST OF THE 50% OF THE CLAIM MADE BY THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE H AS NOT PRODUCED EVIDENCE WITH REGARD TO THE CLAIM OF THE ASSESSEE. AT THE SA ME TIME, THE ASSESSEE HAD PRODUCED THE BOOKS OF ACCOUNT. THE ASSESSEE HAD BEE N ALLOWED THE CLAIM IN THE PAST IN FULL UNDER THE SAME HEAD ON IDENTICAL F ACTS IS NOT UNDER DISPUTE. IT WAS ARGUED THAT THE ASSESSEE HAD BEEN ALLOWED THE S AID CLAIM IN THE FOLLOWING YEARS AS WELL. IN THE PRESENT YEAR, THE A SSESSEE DID NOT ADDUCE ANY EVIDENCE BEFORE THE AO AND THE ADDITIONAL EVIDENCE IN THE FORM OF PAYMENTS OF VOUCHERS ETC. WERE FILED BEFORE THE LD. CIT(A), WHO FORWARDED THE SAME TO THE AO FOR HIS COMMENTS. THE AO OBSERVED THAT NO SUCH DETAILS WERE FILED BEFORE THE AO DURING THE ASSESSMENT PROCEEDIN GS. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS NOT A CA SE WHERE NO DETAILS WITH REGARD TO THE PAYMENT OF STIPEND IS THERE WITH THE ASSESSEE BUT THE SAME WERE ITA NO. 461 & 462(ASR)/2010 ASSTT. YEAR 2003-04 5 NOT FILED BY THE ASSESSEE DURING THE ASSESSMENT PRO CEEDINGS, WHICH WERE FILED BEFORE THE LD. CIT(A) BUT WERE APPRECIATED FO R THE REASONS MENTIONED IN HIS ORDER. THEREFORE, KEEPING IN VIEW THE FACTS AN D CIRCUMSTANCES OF THE PRESENT CASE, THE LD. CIT(A) HAS RIGHTLY ALLOWED 50 % OF THE CLAIM MADE BY THE ASSESSEE AND HAS RIGHTLY DISALLOWED THE BALANC E OF THE CLAIM. WE FIND NO INFIRMITY IN HIS ORDER. THUS, GROUND NO.1 OF THE A SSESSEE AND GROUND NO.1 OF THE REVENUE ARE DISMISSED. 7. AS REGARDS GROUND NO.2 OF THE ASSESSEE, THE AO M ADE DISALLOWANCE OF RS.1,33,124/- ON THE GROUND THAT PERSONAL USE OF TE LEPHONE FACILITY COULD NOT BE RULED OUT AND THE ASSESSEE COULD NOT PRODUCE CER TAIN BILLS AS ASKED FOR BY THE AO. THE AO FOLLOWING THE DECISION OF THE ITAT IN ASSESSEES OWN CASE WHERE DISALLOWANCE OF RS.15,000/- WAS RESTRICTED FO R PERSONAL USE AS AGAINST DISALLOWANCE OF 15% AT RS.1,56,275/- IN THE ASSESS MENT YEAR 2001-02, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE AT RS.20,000 /-. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE C OULD NOT PRODUCE TELEPHONE BILLS AS ASKED FOR BY THE AO AND USE OF THE TELEPHO NE FOR PERSONAL PURPOSES BY THE PARTNERS AND THEIR FAMILY MEMBERS CANNOT BE RULED OUT, IN THE ABSENCE OF COMPLETE RECORDS OF THE USERS OF THE TELEPHONE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS RIGHT LY RESTRICTED THE ITA NO. 461 & 462(ASR)/2010 ASSTT. YEAR 2003-04 6 DISALLOWANCE AT RS.20,000/- AND WE FIND NO INFIRMIT Y IN HIS ORDER. THUS, GROUND NO.2 OF THE ASSESSEE AND GROUND NO.2 OF THE REVENUE ARE DISMISSED. 9. AS REGARDS GROUND NO.3 OF THE ASSESSEE AND GROU ND NO.3 OF THE REVENUE, THE AO HAS MADE DISALLOWANCE OF RS. 2,00,0 00/- OUT OF VEHICLE RUNNING AND MAINTENANCE EXPENDITURE AND CAR DEPRECI ATION ON ACCOUNT OF PERSONAL USER OF THE VEHICLES, WHICH COULD NOT BE RULED OUT. THE LD. CIT(A) CONSIDERING THE OVER ALL CIRCUMSTANCES OF THE CASE, RESTRICTED THE DISALLOWANCE AT RS.50,000/-. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE CONTENTION OF THE ASSESSEE THAT VEHICLES WERE N OT ALLOWED TO BE USED BY THE PARTNERS FOR PERSONAL PURPOSES HAS RIGHTLY NOT BEEN ACCEPTED BY THE LD. CIT(A). IN THE OVER ALL CIRCUMSTANCES AND FACTS OF THE CASE, THE LD. CIT(A) HAS RIGHTLY RESTRICTED THE DISALLOWANCE AT RS.50,00 0/-. WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS, GROUND NO.3 O F THE ASSESSEE AND GROUND NO.3 OF THE REVENUE ARE DISMISSED. 11. AS REGARDS GROUND NO.4 OF THE ASSESSEE AND GROU ND NO.4 OF THE REVENUE, THE AO MADE A DISALLOWANCE OF RS.3 LACS OU T OF TRAVELLING EXPENSES SINCE THE BILLS WERE NOT PROPERLY MAINTAIN ED AND THE ASSESSEE DID NOT PRODUCE BILLS EVEN ON THE NEXT DATE OF HEARING. THE LD. CIT(A) FOLLOWING THE DECISION OF HIS PREDECESSOR IN ASSESSEES OWN C ASE, WHICH ORDER OF THE ITA NO. 461 & 462(ASR)/2010 ASSTT. YEAR 2003-04 7 CIT(A) WAS UPHELD BY THE TRIBUNAL, RESTRICTED THE D ISALLOWANCE AT RS.10,000/-. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IN THE PRESENT YEAR, THERE ARE INSTANCES OF NO EVID ENCE OF EXPENDITURE INCURRED BY THE ASSESSEE AS SPECIFICALLY MENTIONED OF RS1,200/- DEBITED AS ON 14.6.2002. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO WAS NOT JUSTIFIED IN DISALLOWING RS.3 LACS. THE LD. CIT(A) HAS RIGHTLY RESTRICTED THE DISALLOWANCE AT RS.10,000/-. IN THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS, GROUND NO.4 OF THE ASSESSEE AND GROUND NO.4 THE REVENUE ARE DI SMISSED. 13. AS REGARDS GROUND NO.5 OF THE ASSESSEE AND GROU ND NO.5 OF THE REVENUE, THE AO MADE A DISALLOWANCE OF RS. 2 LACS O UT OF EXPENSES CLAIMED BY THE ASSESSEE OF PALWAL UNIT. CERTAIN DISCREPAN CIES IN BILLS AND VOUCHERS WERE POINTED OUT TO THE ASSESSEE INCLUDING SELF MAD E VOUCHERS. THE LD. CIT(A), HOWEVER, RESTRICTED THE ADDITION TO RS.25 ,000/- VIDE PARA 5.3 OF HIS ORDER. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IT IS NOT UNDER DISPUTE THAT CERTAIN BILLS AND VOUC HERS WERE NOT PRODUCED DURING THE ASSESSMENT PROCEEDINGS. IT WAS ARGUED TH AT THE ASSESSEE IS HAVING ALL THE EVIDENCES OF THE EXPENDITURE SO INCURRED AN D ONLY VOUCHERS WERE ITA NO. 461 & 462(ASR)/2010 ASSTT. YEAR 2003-04 8 PRODUCED BEFORE THE AO BUT THE SAME WERE NOT ADMITT ED AS ADDITIONAL EVIDENCE. THE DEFECTS POINTED OUT BY THE AO WERE FEW AS COMPARED TO THE TOTAL EXPENDITURE INCURRED BY THE ASSESSEE AT PALWA L UNIT. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT SUCH LARGE DISALL OWANCE SHOULD NOT BE MADE AND ACCORDINGLY, THE LD. CIT(A) HAS RIGHTLY RESTRICTED THE DISALLOWANCE AT RS.20,000/- AND WE FIND NO INFIRMIT Y IN HIS ORDER. THUS, GROUND NO.5 OF BOTH THE ASSESSEE AND THAT OF THE RE VENUE ARE DISMISSED. 15. AS REGARDS GROUND NO.6 OF THE ASSESSEE IN RESPE CT OF BILLS OF TELEPHONE, WATER, ELECTRICITY AND ADVERTISEMENT, TH E AO HAD MADE AN ADDITION OF RS.10,038/- ON THE BASIS OF TAX AUDIT R EPORT POINTING OUT CERTAIN BILLS OF LAST YEAR WERE DEBITED IN THE BOOKS OF ACC OUNT OF THE CURRENT FINANCIAL YEAR. THE LD. CIT(A) CONFIRMED THE ACTION OF THE AS SESSING OFFICER. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT EVIDENCE PLACE D ON RECORD BEFORE ANY OF THE AUTHORITIES BELOW THAT THE LIABILITY HAS QUANTI FIED DURING THE IMPUGNED YEAR. WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS, GROUND NO.6 OF THE ASSESSEE IS DISMISSED. 17. GROUND NOS. 7, 8 & 9 OF THE ASSESSEE AND GROUND NOS. 6 & 7 OF THE REVENUE ARE GENERAL IN NATURE AND, THEREFORE, REQUI RE NO ADJUDICATION. ITA NO. 461 & 462(ASR)/2010 ASSTT. YEAR 2003-04 9 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.461(ASR)/2010 AND THE APPEAL OF THE REVENUE IN ITA NO.462(ASR)/2010 A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1ST JUNE, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: IST JUNE, 2012 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE:M/S. MALHOTRA BOOK DEPOT, MBD HOUSE, J ALANDHAR. 2. THE ACIT, RANGE-IV, JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.