Gour Nitye Tea & Industries Ltd., Jalpaiguri V. DCIT, Circle - 1, Jalpaiguri, Jalpaiguri

ITA 507/KOL/2011

• Counselvise Citation: 50723514 RSA 2011
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 28-03-2011
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Assessee Lawyers: A K CHAKRABORTY; D SAHA

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH C, KOLKATA () BEFORE , ,, , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 507/KOL/2011 %& '(/ ASSESSMENT YEAR : 2005-06 (*+ / APPELLANT ) GOUR NITYE TEA & INDUSTRIES LTD.., JALPAIGURI (PAN: AABCG 1513 E) -%- -VS- (-.*+/ RESPONDENT ) D.C.I.T., CIRCLE-1, JALPAIGURI. *+ / 0 '/ FOR THE APPELLANT: SHRI A.K.CHAKRABORTY & SHRI D.SAHA -.*+ / 0 '/ FOR THE RESPONDENT: SHRI P.S.DUTTA 1%2 / !# /DATE OF HEARING : 01.02.2012. 3' / !# /DATE OF PRONOUNCEMENT : 16.03.2012. '4 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THE ABOVE APPEAL FILED BY THE ASSESSEE IS AGAINST O RDER DATED 25.01.2011 OF LD. CIT(A)-JALPAIGURI PERTAINING TO A.YR. 2005-06. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING REVISED GR OUNDS OF APPEAL :- I) FOR THAT, ON THE FACTS AD IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF 5% OF THE EXPENSES AGAINST CLAIM ON ACCOUNT OF REPAIRS AND UPKEEP FOR RS11,60,327/. THE CLAIM I S MOREOVER REASONABLE HAVING REGARD TO THE PAST RECORDS OF THE ASSESSEE. II) FOR THAT, ON THE FACTS, THE LD. CIT (A) HAS FOU ND THAT THE LD. ITO HAS TAKEN THE FIGURE WRONGLY ON ACCOUNT OF PRINTING AND STATIONAR Y AT RS. 2,45,970/- INSTEAD OF RS. 56,096/- OUT OF TOTAL EXPENSES CLAIMED AS MISCELLAN EOUS EXPENSES FOR RS. 9,58,400/- AS UNDER: 2 MISCELLANEOUS EXPENSES NAMELY AMOUNT (RS) A) SUNDRY EXPENSES 2,46,361/- B) PRINTING AND STATIONARY 56,096/ C) TRANSPORT AND VEHICLE UPKEEP 6,55,943/- 9,58,400/- AND ACCORDINGLY LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCES @ 5% OF THE TOTAL EXPENSES UNDER THE AFORESAID HEAD. THE DISALLOWANCE S AS MADE BY THE LD. CIT(A) 5% IS ARBITRARY, EXCESSIVE AND WITHOUT ANY BASIS AND P ROPER REASONS MADE PURELY ON SURMISE AND SUSPICION SINCE PROPER EVIDENCES AS PER FACTS AND CIRCUMSTANCES HAVE BEEN PRODUCED AND NO MATERIAL IN SUPPORT OF THE DIS ALLOWANCES HAVE BEEN BROUGHT ON RECORD BY THE LD. AUTHORITIES BELOW. MOREOVER, THE CLAIMS MADE ARE REASONABLE HAVING REGARD TO THE PAST RECORDS OF THE ASSESSEE. III) FOR THAT, ON THE FACTS THE CONFIRMATION OF SUS TAINING RS. 4,000/- IN RESPECT OF PAYMENT TO M/S. RELIANCE ROADWAYS IS UNJUSTIFIED AN D LIABLE TO BE DELETED. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSE SSING OFFICER WHILE DOING THE SCRUTINY ASSESSMENT DISALLOWED CERTAIN EXPENDITURE BY OBSERVING AS UNDER : 1. REPAIRS & UPKEEP : THE EXPENSES CLAIMED UNDER T HIS HEAD IS RS.11,60,327/-. THESE EXPENSES ARE SEEN TO BE MOSTLY SUPPORTED WITH SELF-MADE INTERNAL VOUCHERS AND THE SAME WERE ALSO NOT FULLY VOUCHED FOR. THE INCID ENCE OF INFLATING THESE EXPENSES CANNOT BE RULED OUT AND THEREFORE 10% OF EXPENSES C LAIMED WHICH AMOUNTS TO RS.1,16,039/- IS DISALLOWED AS BEING EXCESSIVE AND NOT FULLY VOUCHED FOR. THE SAME IS ADDED BACK. 2. MISCELLANEOUS EXPENSES : EXAMINATION OF EXPENSES UNDER THIS HEAD REVEALS THAT SUNDRY EXPS. FOR RS.2,46,361/-, PRINTING AND STATIO NERY FOR RS.2,45,970/- AND TRANSIT, TRANSPORT & VEHICLE UPKEEP FOR RS.6,55,943/- ARE MO STLY SUPPORTED WITH INTERNALLY MADE DEBIT VOUCHERS. THEREFORE, 10% OF THESE EXPENS ES OF RS.11,48,274/- WHICH COMES TO RS.1,14,827/- BEING EXCESSIVE AND NOT FULL Y VOUCHED FOR ARE DISALLOWED. THE AO FURTHER OBSERVED THAT ON EXAMINATION OF THE CONFIRMATION RECEIVED FROM SUNDRY CREDITOR NAMELY RELIANCE ROADWAYS A DISCREPA NCY OF SUM OF RS.4,000/- WAS NOTED. HE FURTHER OBSERVED THAT EVEN THOUGH THE AR OF THE ASSESSEE COMPANY WAS GIVEN REASONABLE OPPORTUNITY TO RECONCILE THE DIFFE RENCE ARRIVED AT HE FAILED TO FURNISH ANY EXPLANATION REGARDING THE DISCREPANCY. SO THE A O ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE COMPANY. 3.1. ON APPEAL THE LD. CIT(A) RESTRICTED THE DISALL OWANCES TO 5% IN RESPECT OF REPAIRS AND UPKEEP AND MISCELLANEOUS EXPENSES. IN R ESPECT OF PAYMENT TO M/S.RELIANCE ROADWAYS HE CONFIRMED THE SAME BY STAT ING THAT RS.4,000/- WAS PAID FROM THE GARDEN IN CASH TO M/S.RELIANCE ROADWAYS IS NOT VERIFIABLE. 3 3.2. AGGRIEVED BY THIS, ASSESSEE IN APPEAL BEFORE U S. 4. AT THE TIME OF HEARING THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE BY REFERRING TO PAGE NOS.5 AD 6 OF THE PAPER BOOK WHER EIN A COMPARATIVE STATEMENT OF THE EXPENDITURE AND PERCENTAGE OF COST FOR A.YRS. 2002- 03 TO 2005-06 HAVE BEEN GIVEN AND BASED ON THE SAME HE CONTENDED THAT THE PERCENTAGE OF THE EXPENDITURE INVOLVED DURING THE IMPUGNED ASSESSMENT YEAR IS MUCH LESS TH AN THE PREVIOUS YEAR. THEREFORE HE REQUESTED TO DELETE THE ADDITION WHICH WERE MADE BY THE AO BASED ON SUSPICION AND SURMISES. 5. ON THE OTHER HAND THE LD. DR APPEARING ON BEHALF OF THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, KEEPING IN VIEW OF THE FACT TH AT THE LD. COUNSEL FOR ASSESSEE HAS FILED A COMPARATIVE STATEMENT OF THE EXPENDITURE AN D PERCENTAGE OF COST FOR A.YRS. 2002-03 TO 2005-06 WHICH ARE PLACED AT PAGE NOS 5 A ND 6 OF THE PAPER BOOK IT IS OBSERVED THAT THE EXPENDITURE INVOLVED IN THE ASSES SMENT YEAR UNDER CONSIDERATION I.E. 2005-06 IS MUCH LESS THAN THE PREVIOUS YEAR. THEREF ORE WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND ALLOW THE APPEAL OF THE ASS ESSEE. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE COURT ON 16.03.2012. SD/- SD/- , ,, , MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , , , , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 16.03.2012. R.G.(P.S.) 4 '4 / -5 6'5'7- COPY OF THE ORDER FORWARDED TO: 1. GOUR NITYE TEA & INDUSTRIES LTD., RAIKAT PARA, P.O. & DT.: JALPAIGURI-735101. 2 D.C.I.T., CIRCLE-1, JALPAIGURI. 3. THE C.I.T. 4. CIT(A)-JALPAIGURI 5. THE CIT(DR), KOLKATA BENCHES, KOLKATA .5 -/ TRUE COPY, '4%1/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES