Appeal details
Counselvise Citation
[2016] 133 COUNSELVISE.COM (IT) 2191 (ITAT-RANCHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 3 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
02-03-2016
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Assessment Year
2008-2009
Appeal Filed On
02-12-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BEFORE S/SHRI SHAMIM YAHYA (AM) & PARTHA SARATHI CHAUDHURY (JM) I.T.A. NO.05 /RAN/2015 ASSESSMENT YEAR : 2008-2009 SRI NAND KISHORE CHOUDHARY, PROP. VARIETY TEXTILES, MAHAVIR CHOWK, UPPER BAZAR, RANCHI V S DCIT, CIRCLE-2, RANCHI PAN/GIR NO. : ABIPC 2652 F (APPELLANT ) .. RESPONDENT APPELLANT BY : SHRI DEVESH PODDAR, ADV RESPONDENT BY : SHRI SANDIP RAJ, ADDL. CIT DATE OF HEARING : 01-03-2016 DATE OF PRONOUNCEMENT : 02 - 3-2016 O R D E R PER PARTHASARATHI CHAUDHURY, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FR OM THE ORDER OF THE LD CIT(A), RANCHI DATED 18.9.2014 FOR THE ASSESSMEN T YEAR 2008-09. 2. ALTHOUGH THE ASSESSEE HAS RAISED MULTIPLE GROUND S OF APPEAL, BUT ESSENTIALLY, THE SOLE GRIEVANCE OF THE ASSESSEE IS AGAINST THE DISALLOWANCE OF 25% OF THE EXPENSES MADE BY THE ASSESSING OFFICE R AND CONFIRMED BY THE LD CIT(A). IT IS ALSO STATED THAT IN SOME OF T HE HEADS, THE DISALLOWANCE IS RESTRICTED TO 10% OF THE EXPENSES. 2 I.T.A. NO.05 /RAN/2015 ASSESSMENT YEAR : 2008-2009 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER U/S.143(3) OF THE I.T.ACT DATED 8.9.2010 WERE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF WHOLESALE TRADING IN CLO TH. THE ASSESSEE ALSO DERIVES INCOME FROM LONG TERM CAPITAL GAIN, SHORT T ERM CAPITAL GAIN AND INCOME FROM OTHER SOURCES. THE ASSESSEE MAINTAINED REGULAR BOOKS OF ACCOUNT I.E. CASH BOOK, LEDGER, JOURNALS, BANK BOO K ETC IN RESPECT OF HIS PROPRIETORY FIRM M/S. VARIETY TEXTILES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED TO THE PROFIT AND LOSS ACCOUNT THE FOLLOWING EXPEN SES: I) SALES PROMOTION EXPENSES : RS.41,009/- II) STAFF WELFARE EXPENSES : RS.29,964/- III) CONVEYANCE EXPENSES : RS.23,186/- IV) TRAVELLING EXPENSES : RS.84,360/- V) VEHICLE MAINT. EXPENSES : RS.61,972/- VI) DISCOUNT : RS.55,946/- VII) TAKADA EXPENSES : RS.2,20,640/- THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FUR NISH BILLS AND VOUCHERS TO SUBSTANTIATE THE CLAIM. HOWEVER, THE A SSESSEE COULD NOT PRODUCE SOME OF THE BILLS AND VOUCHERS FOR THE ABOV E EXPENSES. FROM THE VOUCHERS FURNISHED BEFORE THE ASSESSING OFFICER, TH E ASSESSING OFFICER NOTICED THAT SOME OF THE VOUCHERS ARE SELF MADE VOU CHERS AND SOME ARE NOT PROPERLY MAINTAINED AND SOME PAYMENTS ARE MADE IN CASH. IN VIEW OF ABOVE, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE EXPENSES ARE 3 I.T.A. NO.05 /RAN/2015 ASSESSMENT YEAR : 2008-2009 NOT COMPLETELY VERIFIABLE AND JUSTIFIABLE. ACCORDI NGLY, HE DISALLOWED RS.1,71,870/- BEING 25% OF THE TOTAL EXPENSES. 4. IN THE FIRST APPEAL, THE LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER , INTER ALIA, OBSERVING THAT THE ONUS WAS ON THE ASSESSEE TO EXPLAIN THE GENUINENESS OF THE EXPENSES REFLECTE D IN THE PROFIT AND LOSS ACCOUNT. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, LD COUNSEL FOR THE ASSES SEE SUBMITTED THAT CONSIDERING THE NATURE OF EXPENSES, THE DISALLOWANC E IS ON HIGHER SIDE. ON THE OTHER HAND, LD D.R. SUBMITTED THAT SINCE PRO PER BILLS AND VOUCHERS ARE NOT PRODUCED, THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM ON ESTIMATE BASIS AND LD CIT(A) IS FULLY JUSTIFIED IN CONFIRMING THE SAME. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD OF THE CASE. IT IS A CASE WHERE THE AUTHORITIES BELOW HAV E FOUND OUT THAT ALL BILLS AND VOUCHERS WERE NOT PRODUCED FOR VERIFICATION BEF ORE THE ASSESSING OFFICER OR BEFORE THE LD CIT(A). AT THE SAME TIME, THEY HAVE NOT DOUBTED THE BUSINESS ACTIVITIES. IT IS A FACT THAT THE ONU S IS ON THE ASSESSEE TO SUBSTANTIATE ITS CLAIM BY FURNISHING PROPER BILLS A ND VOUCHERS. HOWEVER, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE AND THE NATURE OF EXPENSES INCURRED BY THE ASSESSEE, IN THE INTEREST OF JUSTICE, IT WOULD BE JUSTIFIABLE TO RESTRICT THE DISALLOWANCE T O 5% OF THE TOTAL CLAIM OF EXPENSES. WE ORDER ACCORDINGLY. 4 I.T.A. NO.05 /RAN/2015 ASSESSMENT YEAR : 2008-2009 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02 /03/20 16 . SD/- SD/- (SHAMIM YAHYA) (PARTHA SARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 02 / 03/2016 PARIDA , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT : SRI NAND KISHORE CHOUDHARY, PROP. VARIETY TEXTILES, MAHAVIR CHOWK, UPPER BAZAR, RANCHI 2. THE RESPONDENT: DCIT, CIRCLE-2, RANCHI 3. THE CIT(A)- RANCHI 4. CIT , RANCHI 5. DR, ITAT, RANCHI 6. GUARD FILE. BY ORDER, //TRUE COPY// SR.PRIVATE SECRETARY ITAT, RANCHI
