BALAJI INDUSTRIAL PRODUCTS LTD., Jaipur V. ACIT, Jaipur

ITA 53/JPR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5601 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 19-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

ITA NO. 53/JP/15 M/S SHRI BALAJI INDUSTRIAL PRODUCTS LTD. VS. ACIT, CIRCLE-3, JAIPUR 1 IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO. 53/JP/15 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 LQUOKBZ DH RKJH[K DATE OF HEARING : 22 . 12.2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 08/01/2016 VKNS'K@ ORDER FU/KKZFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ASHISH SHARMA (ADV.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA SINGH(JCIT) PER SHRI VIKRAM SINGH YADAV, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-I, JAIPUR DATED 29.10.2014 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND OF APPEAL: M/S SHRI BALAJI INDUSTRIAL PRODUCTS, 48, JHOTWARA INDUSTRIAL AREA, JAIPUR CUKE V/S. ACIT, CIRCLE - 3, JAI P UR LFKK;H YS[KK LA-@THVKJBZVKJ LA-@ PAN NO. AAACB 7092 E ITA NO. 53/JP/15 M/S SHRI BALAJI INDUSTRIAL PRODUCTS LTD. VS. ACIT, CIRCLE-3, JAIPUR 2 (1) THE LD. CIT(A) HAS GROSSLY ERRED IN SUSTAINING THE ADDITION OF RS. 4,41,672/- RESTRICTING THE ADDITION TO 5% OF THE CL AIM MADE BY THE APPELLANT. (2) THAT THE CIT(A) HAS GROSSLY ERRED IN SUSTAINING THE ADDITION WITHOUT CONSIDERING THE FACT OF EXPENDITURE HAVING INCURRED IN BUSINESS EXPEDIENCY WHICH HAS NOT BEEN DENIED OR RE BUTTED BY ASSESSING OFFICER. (3) THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FA CT OF ADDITION MADE ON SURMISES AND CONJECTURES ONLY WHICH BEING ANT ITHESIS TO LAW DESERVES TO BE TURNED DOWN. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED I TS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 9,39,40,112/- WHICH W AS SELECTED FOR SCRUTINY AND AN ORDER U/S 143(3) OF THE INCOME TA X ACT WAS PASSED DETERMINING THE INCOME OF THE ASSESSEE AT RS. 9,48, 23,450/-. THE AO HAS DISALLOWED 10% OF STAFF AND LABOUR WELFARE EXPE NSES, TRAVELLING EXPENSES, POSTAGE AND TELEPHONE EXPENSES, VEHICLE R EPAIRS & MAINTENANCE EXPENSES, AND SALE PROMOTION EXPENSES AMOUNTING TO RS. 8,83,341/-. 2.1 THE LD. CIT(A) HAS SUSTAINED 5% OF THE DISALL OWANCES DONE BY THE AO WITH THE FOLLOWING OBSERVATIONS: I HAVE DULY CONSIDERED THE FACTS OF CASE AND SUBMIS SION MADE BY APPELLANT. I HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER PASSED. ITA NO. 53/JP/15 M/S SHRI BALAJI INDUSTRIAL PRODUCTS LTD. VS. ACIT, CIRCLE-3, JAIPUR 3 IT IS FACT THAT AO HAS NOT DISTURBED THE GP % RATI O BUT MADE 10% DISALLOWANCES (MENTIONED ABOVE) OF EXPENSES CLAIMED . APPELLANT HAS MENTIONED THAT AO IN SUCCEEDING YEARS HAS DISA LLOWED 5% OF EXPENSES INCURRED KEEPING IN VIEW OF THE FACT, DISA LLOWANCE IS RESTRICTED TO 5%. 2.2 DURING THE COURSE OF HEARING THE LD. AR SUBMITT ED THAT THE DISALLOWANCE HAVE BEEN MADE ON PURELY ADHOC BASIS AND THE AO HAS NOT BROUGHT ON RECORD ANY COGENT EVIDENCE TO REJECT THE CLAIM OF EXPENDITURE INCURRED BY THE APPELLANT COMPANY. FURTHER THE LD. AR BROUGHT TO THE NOTICE OF THE BENCH THE DECISION OF LD. CIT(A) FO R A.Y. 2010-11 DATED 20.04.2015 WHEREIN THE SIMILAR DISALLOWANCE MADE BY THE AO @ 5% OF THE TOTAL EXPENDITURE HAS BEEN DELETED BY THE LD. CIT(A). 2.3 THE LD. DR IS HEARD. 2.4 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. AS APPARENT FROM THE ORDER OF THE AO, THE DISALLOWANCE HAVE BEEN MADE ON A PURELY ADHOC BASI S WHICH CANNOT BE SUSTAINED IN THE EYE OF LAW. FURTHER IT IS NOTED T HAT THE SIMILAR DISALLOWANCES MADE BY THE AO FOR A.Y. 2010-11 HAVE BEEN DELETED BY THE LD. CIT(A) HOLDING THE SAME TO BE MADE ON PUREL Y ON SURMISES ITA NO. 53/JP/15 M/S SHRI BALAJI INDUSTRIAL PRODUCTS LTD. VS. ACIT, CIRCLE-3, JAIPUR 4 WITHOUT BRINGING ANY COGENT EVIDENCES. IN LIGHT O F ABOVE, THE ADHOC DISALLOWANCES MADE BY THE AO ARE DELETED. HENCE T HE GROUNDS TAKEN BY THE ASSESSEE ARE ALLOWED. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/ 01/2016. SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 08/01 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT M/S SHRI BALAJI INDUSTRIAL P RODUCTS LTD., JAIPUR 2. THE RESPONDENT THE ACIT, CIRCLE-3, JAIPUR 3. THE CIT(A)-I, JAIPUR. 4. THE CIT-I. JAIPUR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO.53/JP/15) VKNS'KKUQLKJ@ BY ORDER, ;D IATHDKJ@ ASSISTANT. REGISTRAR