M/s. Kasi Sales & Services Pvt. Ltd., Bhubaneswar V. ACIT, Circle-2(1), Bhubaneswar

ITA 467/CTK/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3618 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 28-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUVENDU DUTTA
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.467/CTK/2015 ASSESSMENT YEAR : 2010 - 2011 M/S KASI SALES & SERVICES PVT LTD., PLOT NO.220, SEC - A, ZONE - B, MANCHESWAR INDUSTRIAL ESTATE, BHUBANESWAR. VS. ACIT, CIRCLE 2(1), BHUBANESWAR PAN/GIR NO. AABCK 3041 K (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE RE V ENUE BY : SHRI SUVENDU DUTTA, DR DATE OF HEARING : 26 /07 / 2017 DATE OF PRONOUNCEMENT : 27 /07 / 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - 1, BHUBANESWAR , DATED 14.9.2015 , FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER LEVYING PENALTY U/S.271(1)(C) OF THE ACT FOR RS.69,820/ - . 2 ITA NO.467/CTK/2015 ASSESSMENT YEAR :2010 - 2011 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER WHILE MAKING THE ASS ESSMENT MADE DISALLOWANCE OF RS.91,410/ - UNDER THE HEAD MISCELLANEOUS EXPENSES ON THE GROUND THAT THE ASSESSEE HAS NOT SATISFACTORILY EXPLAINED THE EXPENSES. FURTHER, DISALLOWANCE OF RS.35,761/ - UNDER THE HEAD CLUB EXPENSES WAS MADE ON THE GROUND TH AT EXPENSES ARE PERSONAL IN NATURE AND NOT BUSINESS EXPENSES OF THE ASSESSEE. FURTHER, DISALLOWANCE OF RS.43,717/ - WAS MADE OUT OF BUSINESS PROMOTION EXPENSES @ 20% OF THE TOTAL EXPENSES OF RS.2,18,587/ - CLAIMED BY THE ASSESSEE ON THE GROUND THAT IT IS NO T WHOLLY SPENT FOR BUSINESS PROMOTION. 4. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY U/S.271(1)(C) OF THE ACT OF RS.69,820/ - ON THE GROUND OF FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. 5. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION O F THE ASSESSING OFFICER. 6. BEING AGGRIEVED BY THE SAID ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 7. LD A.R. OF THE ASSESSEE HAS FILED AN ADJOURNMENT APPLICATION. THE BENCH FINDING THE REASONS FOR SEEKING ADJOURNMENT AS NOT PLAUSIBLE ONE, REJECTED THE ADJOURNMENT APPLICATION AND THE APPEAL WAS DISPOSED OF AFTER HEARING LD D.R. AND ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. 8. LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 3 ITA NO.467/CTK/2015 ASSESSMENT YEAR :2010 - 2011 9. WE HAVE HEARD LD D.R., PERUSED THE ORDERS OF LOWER AUTHOR ITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER HAS MADE DISALLOWANCE OUT OF EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD MISCELLANEOUS EXPENSES OF RS.91,410/ - ON THE GROUND THAT IT WAS NOT SATISFACTORILY EXPLAINED BY THE ASSESSEE. HE MADE DISALLOWANCE OUT OF CLUB EXPENSE S ON THE GROUND THAT IT WAS PERSONAL EXPENSES AND NOT BUSINESS EXPENSES OF THE ASSESSEE. FURTHER, DISALLOWANCE OF RS.43,717/ - OUT OF BUSINESS PROMOTION EXPENSES WAS MADE BEING 20% TOTAL EXPENSES OF RS.2,18,587/ - ON TH E GROUND THAT IT IS WHOLLY SPENT FOR BUSINESS OF THE ASSESSEE. WE FIND THAT DISALLOWANCE S OF THE EXPENSES HAVE BEEN MADE BY THE ASSESSING OFFICER EITHER ON ESTIMATE BASIS OR ON THE GROUND THAT THE ASSESSEE COULD NOT PROVE THAT THEY WERE INCURRED WHOLLY FOR THE BUSINESS OF THE ASSESSEE . THERE IS NO FINDING BY THE ASSESSING OFFICER IN HIS ORDER THAT THE EXPENSES CLAIMED BY THE ASSESSEE ARE NOT GENUINE OR BOGUS. THE DISALLO WANCES HAVE BEEN MADE ONLY ON THE GROUND THAT THE ASSESSEE COULD NOT SATISFACTORILY EXPLAINED THE SAME. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT AS THERE IS NO FINDING BY THE ASSESSING OFFICER THAT THE EXPENSES CLAIMED BY THE ASSESSEE ARE EITHER BOGUS OR INFLATED, NO PENALTY UNDER SECTION 271(1)(C ) OF THE AT CAN BE IMPOSED ON THE ASSESSEE FOR FURNISHING INACCURATE PARTICULARS OF HIS INCOME . WE, THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE LEVY OF PENALTY OF RS.69,820/ - UNDER SECTION 271(1)(C) OF THE ACT AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 4 ITA NO.467/CTK/2015 ASSESSMENT YEAR :2010 - 2011 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 27 /07 /2017 IN THE PRESENCE OF PARTIES. SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 27 /07 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT: M/S KASI SALES & SERVICES PVT LTD., PLOT NO.220, SEC - A, ZONE - B, MANCHESWAR INDUSTRIAL ESTATE, BHUBANESWAR. 2. THE RESPONDENT. ACIT 2(1), BHUBANESWAR. 3. THE CIT(A) - 1, BHUBANESWAR. 4. PR.CIT - 1, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//