M/s Chotanagpur Graphite Pvt. ltd, Ranchi V. ITO, Ranchi

ITA 51/RAN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0001 (ITAT-RANCHI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY PAL
• Assessee Lawyers: S S.K.PODARDEVESH PODAR
• Keywords: Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 51/RAN/2016 ASSESSMENT YEAR : 2010 - 2011 M/S. CHOTANAGPUR GRAPHITE PVT LTD., 3 - P, ASHREE GOPTAL COMPLEX, COURT ROAD, RANCHI. VS. ITO WARD - 1(1), RANCHI PAN/GIR NO. (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : S/ SHRI S.K.PODAR /DEVESH PODAR , AR REVENUE BY : SHRI SANJAY PAL , DR DATE OF HEARING : 6 /12/ 2016 DATE OF PRONOUNCEMENT : 6 /12/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - RANCHI , DATED 6.11.2015 , FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. THE SO L E ISSUE INVOLVED I N THIS APPEAL IS THAT THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING 10% OF DISALLOWANCE OF EXPENDITURES MADE UNDER THE HEAD TRAVELLING AND CONVEYANCE , MOBILE EXPENSES AND TELEPHONE EXPENSES. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ON EXAMINATION OF BOOKS OF ACCOUNT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED TRAVELLING & CONVEYANCE 2 ITA NO. 51/RAN/2016 ASSESSMENT YEAR : 2010 - 2011 EXPENSES OF RS.5,14,708/ - , MOBILE EXPENSES OF RS.1,00,400/ - AND TELEPHONE EXPENSES OF RS.4,29,594/ - . HE SUBMITTED THAT THE VOUCHERS IN MANY CASES WERE SELF MADE AND FULL PARTICULARS ARE NOT MENTIONED AND, THEREFORE, INFLATION OF EXPENSES CANNOT BE RULED OUT. HENCE, HE MADE AN ESTIMATED DISALLOWANCE OF 20% OF THE EXPENSES AND MADE AN ADDITION OF RS.1,02,942/ - UNDER THE HEAD TRAVELLING & CONVEYANCE, RS.20,080/ - UNDER THE HEAD MOBILE EXPENSES AND RS.85,919/ - UNDER THE HEAD TELEPHONE EXPENSES. 4. ON APPEAL, LD CIT(A) REDUCED THE DISALLOWANCE OF THE EXPENSES UNDER THE ABOVE HEADS TO 10% OF THE EXPENSES CLAIMED BY THE ASSESSEE. 5. BEIN G STILL AGGRIEVED BY THE ORDER OF THE LD CIT(A), THE ASSESSEE IS IN APPEAL BEFORE ME. 6. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE FILED A COPY OF ORDER DATED 4.11.2015 OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF SHRI KANHAIYALAL GANGWAL VS DCIT (IT A NOS.185 TO 187/RAN/2014) FOR ASSESSMENT YEARS 2007 - 08 TO 2009 - 2010 AND SUBMITTED THAT THE TRIBUNAL IN THIS CASE HAS HELD THAT BOTH THE LOWER AUTHORITIES HAVE NOT POINTED OUT FOR WHICH OF THE EXPENSES THE ASSESSEE HAS NOT MAINTAINED PROPER VOUCHERS. IN T HE ABSENCE OF THE SAME, THE DISALLOWANCE MADE ON ADHOC BASIS BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD CIT(A) CANNOT BE SUSTAINED IN LAW. THE FACTS IN THE CASE OF THE ASSESSEE ARE IDENTICAL AND, 3 ITA NO. 51/RAN/2016 ASSESSMENT YEAR : 2010 - 2011 THEREFORE, FOLLOWING THE SAME, THE DISALLOWANCE MADE ON ADHOC BASIS SHOULD BE DELETED. 7. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDER OF THE LD CIT(A). 8. I FIND THAT IN THE INSTANT CASE, THE ASSESSING OFFICER MADE THE DISALLOWANCE OF 20% OF THE EXPENSES CLAIMED UNDER THE HEAD TRAVELLING & CONVEYANCE OF RS.1,02,942/ - , MOBILE EXPENSES OF RS.20,080/ - AND TELEPHONE EXPENSES OF RS.85,919/ - ON THE GROUND THAT IN MOST OF THE CASES, THE VOUCHERS WERE SELF MADE AND FULL PARTICULARS ARE NOT MENTIONED. ON APPEAL, LD CIT(A) REDUCED THE DISALLOWANCE TO 10% OF THE EXPENSES UNDER THE ABOVE HEADS. I FIND THAT THE ASSESSING OFFICER AS WELL AS LD CIT(A) HAS NOT POINTED OUT FOR WHICH OF THE EXPENSES, THE ASSES SEE HAS NOT MAINTAINED PROPER VOUCHERS AND IN ABSENCE OF THE SAME, THE DISALLOWANCE @ 20% MADE ON ADHOC BASIS BY THE ASSESSING OFFICER AND REDUCED BY LD CIT(A) TO 10% CANNOT BE SUSTAINED IN LAW. THEREFORE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE DISALLOWANCE OF EXPENSES SUSTAINED BY LD CIT(A) @ 10% OF THE EXPENSES UNDER THE ABOVE HEADS. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 6 /12/2016 IN THE PRESENCE OF PARTIES. SD/ - (N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 6 /12 /2016 4 ITA NO. 51/RAN/2016 ASSESSMENT YEAR : 2010 - 2011 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : M/S. CHOTANAGPUR GRAPHITE PVT LTD., 3 - P, ASHREE GOPTAL COMPLEX, COURT ROAD, RANCHI 2. THE RESPONDENT: ITO WARD - 1(1), RANCHI 3. THE CIT(A), RANCHI 4. CIT , RANCHI 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//