The ITO, Ward-1, Amalapuram, Amalapuram V. Sri V.Lakshminarayana, C.A, Amalapuram

ITA 5/VIZ/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67357 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-05-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 11-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P SASMAL
• Assessee Lawyers: D BALAJI
• Section: 148

Judgement Text

ITA NOS.5 & 6/VIZ/2012 SRI V. LAKSHMINARAYANA, C.A. , AMALAPURAM IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D. MANMOHAN , VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 05 & 06 /VIZAG/ 20 12 ASSESSMENT YEAR S : 2003 - 04 & 2004 - 05 ITO WAR D - 1 AMALAPURAM VS. SRI V. LAKSHMINARAYANA, C.A. AMALAPURAM (APPELLANT) (RESPONDENT) GIR NO.L - 0716 APPELLANT BY: SHRI J.P. SASMAL, ADDL. CIT RESPONDENT BY: SHRI D. BALAJI, C.A. DATE OF HEARING : 01.05.2013 DATE OF PRONOUNCEMENT : 01.05.2013 ORDER PER SHRI D. MANMOHAN, VICE PRESIDENT:- THESE TWO APPEALS, FILED AT THE INSTANCE OF THE R EVENUE, ARE DIRECTED AGAINST THE COMMON ORDER DATED 09.09.2011 PASSED BY THE CIT(A) RAJAHMUNDRY AND THEY PERTAIN TO THE ASSESSMENT YEAR S 2003-04 & 2004-05. GROUNDS URGED IN BOTH THE APPEALS ARE IDENTICAL WHI CH ARE EXTRACTED FOR THE SAKE OF IMMEDIATE REFERENCE: 1. THE CIT(A) ERRED BOTH IN LAW AND ON FACTS OF THE CA SE. 2. THE CIT(A) ERRED IN DELETING THE ADDITION MADE BY T HE ASSESSING OFFICER. 3. THE POWERS OF CIT(A) ARE COTERMINOUS WITH THAT OF T HE ASSESSING OFFICER. THE CIT(A) DID NOT CONSIDER THE FACTUAL RE PORT SUBMITTED BY THE ASSESSING OFFICER AS HE OBSERVED THAT FURTHER E NQUIRY WAS NOT CONDUCTED BY THE ASSESSING OFFICER. 4. THE CIT(A) SHOULD HAVE GIVEN OPPORTUNITY TO THE ASS ESSING OFFICER TO FURNISH ANY ADDITIONAL INFORMATION IN THIS REGAR D AS HIS POWERS ARE COTERMINOUS WITH THAT OF ASSESSING OFFICER. 5. THE CIT(A) ERRED IN NOT APPRECIATING THE COMPLETE F ACTS THAT ALL THE VOUCHERS ARE PREPARED BY A SINGLE PERSON AFTER THE ISSUANCE OF NOTICE AND HOLDING THAT THE ASSESSING OFFICER DID N OT POINT OUT ANY INFLATION IN EXPENDITURE AS THE ONUS OF PROVING THE GENUINENESS OF THE EXPENDITURE IS ON THE ASSESSEE. 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF H EARING THE APPEAL. ITA NOS.5 & 6/VIZ/2012 SRI V. LAKSHMINARAYANA, C.A. , AMALAPURAM 2 2. FACTS IN SHORT ARE THAT THE ASSESSEE CARRIED OUT DATA PROCESSING WORK FOR ITC LIMITED APART FROM HIS REGULAR PROFESSION A S A CHARTERED ACCOUNTANT. FOR THE YEARS UNDER CONSIDERATION, THE ASSESSEE ADM ITTED TOTAL INCOME OF RS.1,98,445/- AND RS.3,17,480/- RESPECTIVELY, WHICH WERE ORIGINALLY PROCESSED U/S 143(1) OF THE INCOME-TAX ACT BUT SUBSEQUENTLY R E-OPENED BY ISSUING A NOTICE U/S 148 OF THE ACT. DURING THE COURSE OF RE -ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE CLAIMED CERTAIN EXPENDITURE AGAINST THE GROSS FEE RECEIVED FROM ITC LIMITED. ACCORDING TO THE ASSESSING OFFICER, THE EXPENDITURE INCURRED FOR EARNING THE ABOVE MENTIONE D GROSS RECEIPTS WAS NOT SUPPORTED BY PROPER VOUCHERS. IN THIS REGARD, HE O BSERVED THAT IN THE ABSENCE OF PROPER VOUCHERS, ETC., NO COGNIZANCE CAN BE GIVEN TO THE VOUCHERS PLACED BEFORE HIM AND ACCORDINGLY THE ENTIRE EXPEND ITURE WAS DISALLOWED. 3. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE LD. CIT (A) THAT HE ENGAGED VARIOUS WORKERS TO DO THE DATA PROCESSING WORK AT T HE PURCHASE POINTS AND SALARY WAS PAID TO THEM REGULARLY. EVEN PROVIDENT FUND WAS DEDUCTED ON THESE SALARIES. SINCE EXPENDITURE WAS INCURRED GEN UINELY, THE ACTION OF THE A.O. IN DISALLOWING THE CLAIM OF DEDUCTION IS NOT I N ACCORDANCE WITH LAW. THE LD. CIT(A) OBSERVED THAT THE ONLY EXPENDITURE WHICH IS DEBITED BY THE ASSESSEE IS TOWARDS SALARIES, PF THEREON AND TRAVEL LING EXPENDITURE. THE ASSESSEE ALSO FURNISHED COMPLETE DETAILS OF EMPLOYE ES BUT THE A.O. DISALLOWED ON THE ONLY GROUND THAT THE ASSESSEE DID NOT FURNISH THE EDUCATIONAL QUALIFICATIONS OF THESE STAFF MEMBERS A PART FROM EXPRESSING DOUBT ON THE GENUINENESS OF THE VOUCHERS BY HOLDING THAT THEY ARE IN THE SAME HAND WRITING AND PREPARED ON THE SAME DAY. IN THIS REGARD, THE LD. CIT(A) OBSERVED THAT THE A.O. OUGHT NOT TO HAVE DISALLOWED ON SUCH ASSUMPTIONS AND IF HE WANTS TO DISALLOW THE EXPENDITURE, HE SHO ULD HAVE MADE FURTHER ENQUIRIES. HE FURTHER HIGHLIGHTED THE FACT THAT TH E ASSESSEE DEDUCTED PF ON THE SALARY PAYMENTS AND DEPOSITED THE SAME IN THE P F ACCOUNT ON REGULAR BASIS. ATLEAST THOSE CHALLANS COULD NOT HAVE BEEN PREPARED AFTER THE ISSUE OF NOTICE U/S 148 OF THE ACT. HE THUS ARRIVED AT A CO NCLUSION THAT THE A.O. PROCEEDED TO DISALLOW THE ENTIRE EXPENDITURE WITHOU T PROPERLY EXAMINING THE GENUINENESS OF THE SAME. IT MAY BE NOTICED THAT WI TH REGARD TO THE TAXI HIRE ITA NOS.5 & 6/VIZ/2012 SRI V. LAKSHMINARAYANA, C.A. , AMALAPURAM 3 CHARGES OF RS.35,317/- & RS.28,262/-, THE ASSESSEE HAD NO OBJECTION FOR DISALLOWANCE OF THE SAME, SINCE IT WAS REIMBURSED B Y ITC LIMITED. HAVING REGARD TO THE CIRCUMSTANCES, THE LD. CIT(A) DIRECTE D THE A.O. TO ALLOW ALL OTHER EXPENDITURE AS CLAIMED BY THE ASSESSEE, EXCEP T THE EXPENDITURE ON TAXI HIRE DEBITED IN BOTH THE YEARS. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), REVENU E PREFERRED APPEALS BEFORE THE TRIBUNAL. AT THE TIME OF HEARING, LD. D .R. RELIED UPON THE ORDERS PASSED BY THE ASSESSING OFFICER. WHEN ASKED ABOUT THE ENQUIRIES CAUSED BY THE ASSESSING OFFICER WITH REGARD TO THE CORRECTNES S OF THE CLAIM, THE LD. D.R. WAS FAIR ENOUGH TO PLACE A COPY OF THE LETTER ADDRE SSED BY THE ITO WARD-1, AMALAPURAM DATED 24.09.2010 TO THE CIT RAJAHMUNDRY, WHEREIN, THE A.O. ADMITTED THAT THE EXPENDITURE CLAIMED BY THE ASSESS EE IS IN ORDER AND THERE IS NO BASIS FOR DISALLOWING THE EXPENDITURE. 5. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND HENCE THE APPEALS FILED BY THE REVENUE ARE DISMISSED, AS PRONOUNCED IN THE OPE N COURT. PRONOUNCED IN THE OPEN COURT ON 01.05.2013 SD/ - SD/ - (B . R . BASKARAN) ( D. MANMOHAN ) ACCOU NTANT MEMBER VICE PRESIDENT VISAKHAPATNAM, DATED 1 ST MAY, 2013 VG/SPS COPY TO 1 ITO WARD - 1, AMALAPURAM 2 SRI V. LAKSHMINARAYANA, C.A., 4 - 2 - 70, BHUPAYYA AGRAHARAM, AMALAPURAM 3 THE CI T, RAJAHMUNDRY 4 THE CIT (A) , RAJAHMUNDRY 5 THE DR, ITAT, VI SAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM