M/S Pakiza Ratail Private Limited, Indore V. THE JCIT, RANGE-1, Indore

ITA 494/IND/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2315 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 11-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K BORICHA
• Section: 143(3)

Judgement Text

1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.494/IND/2016 ASSESSMENT YEAR: 2011-12 APPELLANT BY SHRI WRITTEN SUBMISSIONS RESPONDENT BY SHRI V.K. BORICHA DATE OF HEARING 8.2.2018 DATE OF PRONOUNCEMENT 15.02.2018 ORDER PER MANISH BORAD, AM. THIS APPEAL FILED BY THE ASSESSEE PERTAI NING TO ASSESSMENT YEAR 2011-12 IS DIRECTED AGAINST THE ORDER OF LD. C OMMISSIONER OF - INCOME-TAX (APPEALS)-2, INDOREL DATED 29.2.2016 WHI CH IS ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT D ATED 25.03.2014 FRAMED BY THE JCIT-2, RANGE-I, INDORE. 2. WHEN THE CASE WAS CALLED FOR HEARING, THE REPRESENTATIVE ON BEHALF OF THE ASSESSEE REQUESTED FOR ADJOURNMENT. HOWEVER, FROM A PERUSAL OF FILE AND LOOKING TO THE SMALLNESS OF THE PAKIJA RETAIL PRIVATE LIMITED, INDORE VS. JOINT COMMISSIONER OF INCOME TAX, RANGE-1, INDORE (APPELLANT) (RESPONDENT ) PAN NO.AANC[ 0414B 2 ISSUE, THE CASE WAS HEARD ON THE BASIS OF ASSESSEE S WRITTEN SUBMISSIONS WITH THE ASSISTANCE OF THE LEARNED SENI OR DR. 3. THE SOLE GRIEVANCE OF THE ASSESSEE IN THIS APPEA L IS AGAINST THE ORDER OF THE LEARNED CIT(A) CONFIRMING THE ADDITION OF RS.5,00,000/- ON ACCOUNT OF VARIOUS EXPENSES INCURR ED TOWARDS REPAIR AND MAINTENANCE OF FURNITURE, ELECTRICAL AND MACHINES, ETC. 4. BRIEFLY STATED, THE FACTS, AS CULLED OUT FROM RE CORD, ARE THAT THE ASSESSEE IS A PRIVATE COMPANY ENGAGED IN T HE BUSINESS OF SALE OF READYMADE AND GROCERY ITEMS. THE RETURN OF INCOME WAS FILED DECLARING INCOME AT RS.97,43,726/-. THE CASE WAS PICKED UP FOR SCRUTINY ASSESSMENT. NECESSARY NOTICES UNDER SE CTIONS 143(2) AND 142(1)OF THE ACT WERE DULY SERVED UPON THE ASSE SSEE ALONG WITH QUESTIONNAIRE. THE AO, AFTER EXAMINING THE BOOKS OF ACCOUNTS AND OTHER DETAILS, MADE AN AD HOC DISALLOWANCE OF RS. 8 LACS AND ASSESSED THE INCOME AT RS.1,05,43,726/-. 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) AND PARTLY SUCCEEDED AS THE CIT(A) S USTAINED THE DISALLOWANCE/ADDITION AT RS. 5 LACS THEREBY GIVING RELIEF OF RS.3 LACS TO THE ASSESSEE. 6. NOW, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL RAISING THE SOLE GROUND OF THE ALLEGED ADDITION OF RS. 5 LACS CONFIRMED BY THE CIT(A) WHICH WAS MADE BY THE AO ON AD HOC BASIS. 7. THE LEARNED DR SUPPORTED THE FINDINGS OF T HE LEARNED CIT(A). 3 8. WE HAVE HEARD THE SUBMISSIONS OF THE LEAR NED DR AND PERUSED THE RECORD PLACED BEFORE US AND ALSO GONE T HROUGH THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AS WELL A S THE PAPER BOOK CONSISTING OF DETAILED LEDGER ACCOUNTS OF EACH HEAD OF EXPENDITURE FOR WHICH THE LEARNED AO MADE AD HOC DISALLOWANCE. 9. WE OBSERVE THAT THE TURNOVER OF THE ASSESSEE INC REASED TO RS.68.97 CRORES FROM RS.59.82 CRORES IN THE IMME DIATELY PRECEDING YEAR. THE BOOKS OF ACCOUNTS ARE AUDITED. ALL THE DETAILS HAVE BEEN FILED. THE AO HAS NOT REJECTED THE BOOKS OF ACCOUNT. FURTHER, NO SPECIFIC ERROR HAS BEEN POINTED OUT FOR ANY OF THE ALLEGED EXPENDITURE NOR THERE IS SPECIFIC FINDING T HAT THE DETAILS WERE MISSING OR THE EXPENDITURE WERE NOT PROPERLY V OUCHED. THE AOS ONLY ALLEGATION IS THAT THE EXPENDITURE HAS IN CREASED DRASTICALLY AND IN PER CENTRAGE TERMS THEY ARE MUCH MORE THAN THE INCREASE IN SALE. HE ACCORDINGLY MADE AN AD HOC DI SALLOWANCE OF RS. 80,000/- WHICH WAS SUSTAINED BY THE LD. CIT(A) AT RS.5,00,000/-. 10. WE FURTHER FIND THAT THE ASSESSEE HAS GIVEN DET AILS OF EACH AND EVERY EXPENDITURE WHICH HAS BEEN INCURRED IN THE REGULAR COURSE OF BUSINESS AND THESE DETAILS EVEN INCLUDE M INOR EXPENSES OF RS. 20/-, RS.10/-, RS. 50/-, RS.33/- AND SO ON. FU RTHER, IT IS CONSISTENTLY HELD BY VARIOUS JUDICIAL FORUMS THAT A D HOC ADDITIONS WITHOUT ANY BASIS AND WITHOUT POINTING OUT ANY MIST AKE IN THE BOOKS OF ACCOUNT ARE NOT SUSTAINABLE. WE, THEREFOR E, IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND LOOKING TO THE VOLUME OF 4 TURNOVER ACHIEVED BY THE ASSESSEE, INCOME DISCLOSED IN THE INCOME TAX RETURN, REGULAR BOOKS OF ACCOUNTS MAINTAINED AN D AUDITED AND COMPLETE DETAILS AVAILABLE ON RECORD IN SUPPORT OF THE EXPENDITURE, FIND NO REASON TO UPHOLD THE FINDINGS OF THE LEARNE D CIT(A) SUSTAINING THE DISALLOWANCE OF RS.5,00,000/-. WE AC CORDINGLY DELETE THE SAME AND ALLOW GROUND NOS. 1 AND 2 OF THE ASSES SEES APPEAL. 6. GROUND NO. 3 IS GENERAL IN NATURE AND REQUIRES N O ADJUDICATION. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 15.02.201 8. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 15 FEBRUARY, 2018 COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE 1. DATE OF DICTATION : 8.2.2018 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : 9.2.2018 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S./P .S: 5 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISSTANT R EGISTRAR FOR SIGNATURE OF THE ORDER. 9. DATE OF DESPATCH OF THE ORDER: