Ambalal Purshottamdas & Co., Kolkata V. DCIT, C ircle- 43, Kolkata, Kolkata

ITA 474/KOL/2010

• Counselvise Citation: 47423514 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 05-03-2010
• Court: TRIBUNAL
• Department Lawyers: R K SAHA
• Assessee Lawyers: A K TIBREWALEE
• Keywords: Reopening of assessment
• Section: 147; 148; 142(1)

Judgement Text

1 , B , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- B, KOL KATA [ , . .. . ! ! ! !. .. . , , , , '# ] BEFORE SRI N.VIJAYAKUMARAN, JUDICIAL MEMBER & SRI C.D. RAO, AC COUNTANT MEMBER $ $ $ $ / ITA NO. 474 (KOL) OF 2010 %& '( / ASSESSMENT YEAR 2005-06 AMBALAL PURSHOTTAMDAS & CO., KOLKATA. (PAN-AAEFA8291R) DY. COMMISSIONER OF INCOME-TAX, CIRCLE-43, KOLKATA. (+, / APPELLANT ) - VERSUS (/0+,/ RESPONDENT ) +, 1 2 '/ FOR THE APPELLANT: / SRI A.K. TIBREWALEE /0+, 1 2 ' / FOR THE RESPONDENT: / SRI R.K. SAHA 3 1 !# / DATE OF HEARING : 24/11/2011 4' 1 !# / DATE OF PRONOUNCEMENT : 29/12/2011 '5 / ORDER ( ), (N. VIJAYAKUMARAN), JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE-FIRM IS FOR THE ASSES SMENT YEAR 2005-06. IT IS DIRECTED AGAINST THE ORDER OF THE LD. C.I.T.(A)-XXX , KOLKATA, DATED 06/01/2010. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS CHALLENGED THE REOPENING OF ASSESSMENT U/S. 147 READ WITH SEC. 148 OF THE ACT APART FROM ADDITION O F RS.15,67,881/- ON ACCOUNT OF LOSS OF STOCK IN FIRE AND DISALLOWANCE OF VARIOUS EXPENS ES TOTALLING TO RS.15,500/-. 2. THE FACTS RELEVANT ARE THAT THE ASSESSEE-FIRM C ARRIES ON BUSINESS OF TOBACCO AND ALLIED ARTICLES. IT ORIGINALLY FILED ITS RETUR N ON 29/10/2005 DECLARING TOTAL LOSS OF RS.8,94,400/- WHICH WAS DULY PROCESSED U/S. 143(1) OF THE ACT ON 28/3/2007. THEREAFTER THE CASE WAS REOPENED U/S. 147 FOLLOWED BY 148 NOTICE. IN RESPONSE TO NOTICE U/S.148 OF THE ACT, THE ASSESSEE FILED ANOTH ER RETURN ON 07/12/2007 DECLARING TOTAL LOSS OF RS.3,96,400/- SINCE, ACCORDING TO THE ASSESSEE, THERE WAS A MISTAKE IN CALCULATION OF REMUNERATION ALLOWABLE TO PARTNERS I N THE ORIGINAL RETURN FILED ON 29/10/2005. THE LD. A.O. OBSERVED THAT AS PER TAX AUDIT REPORT THE ASSESSEE CLAIMED 2 LOSS OF RS.28,24,511/- BEFORE THE INSURANCE COMPANY ON ACCOUNT OF LOSS OF STOCK OF 1601 BAGS OF TOBACCO IN FIRE. HOWEVER, THE INSURAN CE COMPANY CONSIDERED THE VALUE OF DAMAGED STOCK AT RS.19,02,240/- @ RS.36/- PER BAG A S AGAINST ASSESSEES CLAIM FOR RS.48/- PER BAG, WHICH WAS ACCEPTED BY THE ASSESSEE AS PER SURVEY REPORT OF THE INSURANCE COMPANY. THE LD. A.O. FURTHER OBSERVED T HAT THE SURVEYOR ARRIVED AT A SALVAGE VALUE OF AFFECTED GOODS AT RS.6,45,610/-, R ESULTING IN THE ACTUAL LOSS DIMINISHED TO RS.12,56,630/- [RS.19,02,240 RS.6,45,610]. TH E LD. A.O., THEREFORE, HELD THAT THE ASSESSEE HAS CLAIMED EXCESS LOSS OF RS.15,67,881/- ON ACCOUNT OF LOSS OF STOCK IN FIRE AND ADDED BACK THE SAME TO ITS TOTAL INCOME. BESID ES ABOVE, THE LD. A.O. DISALLOWED VARIOUS EXPENDITURE IN THE TOTAL SUM OF RS.15,500/- UNDER THE FOLLOWING HEADS OF EXPENDITURE ALLEGING NON-FURNISHING OF PROPER BILLS AND VOUCHERS FOR SUCH EXPENSES AND ULTIMATELY ASSESSED THE TOTAL INCOME AT RS.11,88,26 0/- IN THE ASSESSMENT FRAMED U/S. 143(3)/147 OF THE ACT DATED 30/12/2008 :- A) SUNDRY EXPENSES RS. 4,500/- B) PRINTING & STATIONERY RS. 1,000/- C) TELEPHONE EXPENSES RS. 2,500/- D) TRAVELLING EXPENSES RS. 3,000/- E) CAR RUNNING EXPENSES .. RS. 4,500/- RS.15,500/- 3. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. C. I.T.(A) AGITATING THE ABOVE ADDITION AND DISALLOWANCE. IN RESPECT OF DISALLOWA NCE OF RS.15,500/- MADE BY THE LD. A.O. ON ACCOUNT OF VARIOUS EXPENSES, THE LD. C.I.T. (A) FOUND THE SAME FAIR AND REASONABLE AND THUS UPHELD THE SAME. IN SO FAR AS A DDITION OF RS.15,67,881/- IS CONCERNED, THE LD. C.I.T.(A) UPHELD THE ACTION OF T HE LD. A.O. BY OBSERVING AS UNDER :- THE APPELLANT CLAIMED LOSS OF RS.28,24,511/-. TH E A.O EXAMINED THE APPELLANTS CONTENTION. THE A.O NOTICED THE DETAILS REGARDING T HE LOSS OF STOCK ARRIVED BY THE INSURANCE COMPANY. THE INSURANCE COMPANY APPOIN TED SURVEYOR FOR EXAMINING THE LOSS OF STOCK. THE SURVEYOR VALUED ST OCK LOSS BY THE APPELLANT AT RS.19,02,240/-. THE SURVEYOR VALUED SALVAGE VALUE O F THE AFFECTED STOCK AT RS.6,45,610/-. AFTER CONSIDERING THIS ITEMS THE SUR VEYOR FIXED THE VALUE OF RS.12,56,650/- AS THE LOSS OF GOODS IN THE FIRE. TH E INSURANCE COMPANY PROCESSED THE APPELLANTS CLAIM FOR THE LOSS LOST O F STOCK. THE SURVEYOR APPOINTED BY THE INSURANCE COMPANY IS A SPECIALIST FOR CONSIDERING THE LOSS INCURRED BY THE APPELLANT IN THE FIRE. THE VALUE OF THE LOSS ARRIVED AT BY THE SURVEYOR IS AFTER CONSIDERING THE VARIOUS FACTS SUB MITTED BY THE APPELLANT 3 REGARDING THE FIRE, THE APPELLANT HAS ARRIVED AT TH E LOSS OF RS.28,24,5117- ON THE BASIS OF HIGHER VALUE OF THE STOCK. THE CLOSING STOCK IS REDUCED BY THIS AMOUNT AND HENCE THE APPELLANT HAS CLAIMED THIS LOS S OF RS.28,24,511/- IN THE ACCOUNT. BUT SURVEYORS REPORT OF THE INSURANCE COMP ANY VALUED THE LOSS OF GOODS AT RS.12,56,650/- ONLY. HENCE THE LOSS ON ACCOUNT O F FIRE IS ALLOWABLE TO THE EXTENT OF RS.12,56,650/-. THE A.O IS CORRECT TO RES TRICT THE LOSS TO THIS AMOUNT AND MAKE AN ADDITION FOR EXCESS CLAIM OF LOSS BY TH E APPELLANT OF RS. 15,67,881/-. THE AOS ACTION IS CORRECT AS PER LAW AND IS UPHELD. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONS IDERATION IS ALREADY PROCESSED U/S. 143(1) OF THE ACT ON 28/3/2007. THIS INTIMATION WA S SUBSEQUENTLY REOPENED BY NOTICE U/S. 148 FOLLOWED BY NOTICES U/S. 143(2) AND 142(1) OF THE ACT. IN VIEW OF THE ABOVE, THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. [(2007) 291 ITR 500 (SC)] IS SQUAR ELY APPLICABLE TO THE CASE OF THE ASSESSEE. HOWEVER, AS PER RECORD WE SEE THAT THIS ISSUE HAS NEVER BEEN AGITATED BEFORE THE FIRST APPELLATE AUTHORITY AND IT WAS TAK EN AS A FRESH GROUND ONLY BEFORE US FOR THE FIRST TIME. AS THE ISSUE IS DIRECTLY COVER ED BY THE DECISION OF HONBLE SUPREME COURT CITED SUPRA AGAINST THE ASSESSEE, WE CONSIDER ING THE RIVAL SUBMISSIONS REJECT GROUNDS NO. 1 & 2 OF THE ASSESSEE AS DEVOID OF MERI TS. THEREFORE, THESE GROUNDS ARE REJECTED. 5. VIDE GROUND NO. 3, THE ASSESSEE DISPUTES THE AD DITION OF RS.15,67,881/- ON ACCOUNT OF LOSS OF STOCK IN FIRE. WE OBSERVE THAT THE LD. A.O. AFTER TAKING INTO CONSIDERATION THE LOSS OF STOCK ARRIVED AT BY THE I NSURANCE COMPANY AND SALVAGE VALUE OF AFFECTED GOODS TAKEN BY THE SURVEYOR AFTER CONSI DERING THE VARIOUS FACTS SUBMITTED BY THE ASSESSEE REGARDING FIRE HAS RESTRICTED THE L OSS ALLOWABLE TO THE ASSESSEE TO THE EXTENT OF RS.12,56,650/- AND DETERMINED THE EXCESS CLAIM OF LOSS AT RS.15,67,881/-, WHICH HE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND RIVAL SUBMISSIONS, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. C.I.T.(A) IN UPHOLDING THE ADDITION ON ACCOUNT OF EXCESS CLAIM OF LOSS. WE, THEREFORE, UPHOLD THE SAME AND REJECT GROUND NO. 3. 6. VIDE GROUND NO. 4, THE ASSESSEE DISPUTES THE TO TAL DISALLOWANCE OF RS.15,500/- ON ACCOUNT OF VARIOUS EXPENSES REFERRED TO ABOVE. THE LD. A.O. DISALLOWED ON ESTIMATE 4 BASIS THE EXPENSES FOR NON-FURNISHING PROPER BILLS & VOUCHERS IN SUPPORT OF SUCH EXPENSES. BEFORE THE LD. C.I.T.(A) THE ASSESSEE CO ULD NOT IMPROVE ITS CASE AND THUS THE DISALLOWANCE WAS UPHELD BY HIM. BEFORE US ALSO THE ASSESSEE COULD NOT SATISFACTORILY EXPLAIN AND SUBSTANTIATE SUCH CLAIM OF EXPENSES. I N THAT VIEW OF THE MATTER, WE FIND NO INFIRMITY IN THE ORDER OF LD. C.I.T.(A) IN UPHOLDIN G SUCH DISALLOWANCE, WHICH IS UPHELD. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. 6 '5 #' 7 8 69 THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 29/12 /2011 SD/- SD/- ( . .. . ! ! ! !. .. . ) '# ( ) (C.D. RAO), ACCOUNTANT MEMBER (N.VIJAYAKUMARAN) JUDICIAL MEMBER ( (( (!# !# !# !#) )) ) DATE: 29-12-2011 '5 1 /%% :'';- COPY OF THE ORDER FORWARDED TO: 1. +, / THE APPELLANT : AMBALAL PURSHOTTAMDAS & CO., 1, RUPCHAND ROY STREET, KOLK ATA-700 007. 2 /0+, / THE RESPONDENT : D.C.I.T., CIRCLE-43, KOLKATA. 3. %5 () : THE CIT(A)-XXX, KOLKATA. 4. %5/ THE C.I.T., KOL- 5 ?%8 /% / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 GUARD FILE . 0 /%/ TRUE COPY, '5/ BY ORDER, (DKP) @ / DY/ASSTT. REGISTRAR .