The Income-tax Officer, Jammu V. Sh. Sanjay Kumar Gupta, Prop. M/s. Sanjay & Bros, Jammu

ITA 532/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0812 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-03-2016
• Assessment Year: misc
• Appeal Filed On: 28-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA
• Assessee Lawyers: ARUN GUPTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.538(ASR)/2014 ASSESSMENT YEAR:2006-07 PAN: AAQPG2014E SH. SANJAY KUMAR GUPTA VS. INCOME TAX OFFICER, 2/C, NEHRU MARKET, JAMMU. WARD-1(3), JAMMU. (APPELLANT) (RESPONDENT) ITA NO.532(ASR)/2014 ASSESSMENT YEAR:2006-07 PAN: AAQPG2014E INCOME TAX OFFICER, VS. SH. SANJAY KUMAR GUPTA WARD-1(3), JAMMU. 2/C, NEHRU MARKET, JAMMU. (APPELLANT) (RESPONDENT) AASSESSEE BY: SH. ARUN GUPTA, CA DEPARTMENT BY: SH. R.K. SHARDA, DR DATE OF HEARING: 10/03/2016 DATE OF PRONOUNCEMENT: 27/04/2016 ORDER THESE ARE THE CROSS APPEALS ONE BY THE ASSESSEE AND THE OTHER BY THE REVENUE FOR THE ASSESSMENT YEAR 2006-07, AGAINS T THE ORDER DATED 11.06.2014, PASSED BY THE LD. CIT(A), JAMMU. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 1. THAT THE ADDITION OF RS.22,76,174/- MADE BY THE AO AND CONFIRMED BY LD. CIT(A) JAMMU AT 50% AT RS.11,38,08 7/- ON ACCOUNT OF FREIGHT PAID BY THE ASSESSEE IS BAD IN L AW AND ILLEGAL AND REQUIRES TO BE DELETED IN TOTO. 2. THAT THE ADDITION OF RS.22,76,174/- MADE BY THE AO AND CONFIRMED BY LD. CIT(A) JAMMU AT 50% AT RS.11,38,08 7/- ON ACCOUNT OF FREIGHT PAID BY THE ASSESSEE IS AGAINST THE FACTS AND CIRCUMSTANCES OF THIS CASE IS UNJUSTIFIED AND I LLEGAL AND REQUIRES TO BE DELETED IN TOTO. ITA NO.532(ASR)/2014 ASSESSMENT YEAR: 2006-07 2 3. THAT THE AMOUNT OF RS.22,76,174/- IS DULY ACCOUN TED FOR AND HAVE BEEN PAID BY THE ASSESSEE TO EARN THE INCO ME WHICH IS DULY ACCOUNTED FOR AND EXPLAINED BY THE AS SESSEE REQUIRES TO BE ALLOWED AS DEDUCTION. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER THE CIT(APPEALS) JAMMU WAS RIGHT IN LAW TO ALLOW 50% OF THE TOTAL CARRIAGE CONTRACT RECEIPTS AS INCI DENTAL EXPENSES. 2. WHETHER THE CIT(APPEALS) JAMMU WAS RIGHT IN LAW TO ALLOW 50% OF THE TOTAL CARRIAGE CONTRACT RECEIPTS AS INCI DENTAL EXPENSES WHEN THE ASSESSEE HAD NOT PRODUCED THE DET AILS OF EXPENDITURE. 3. WHETHER THE CIT(APPEALS) JAMMU WAS RIGHT IN LAW TO ALLOW 50% OF THE TOTAL CARRIAGE CONTRACT RECEIPTS AS INCI DENTAL EXPENSES WHEN THE ASSESSEE HAD NOT PRODUCED THE DET AILS OF EXPENDITURE WHICH SHOWS THAT THE BOOKS OF ACCOUNTS PRODUCED ARE NOT COMPLETE AND CORRECT AS IT DOES NO T GIVE THE CORRECT AND COMPLETE INFORMATION OF ACCOUNTS ON THE BASIS OF WHICH THE CORRECT INCOME CAN BE DETERMINED. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE HAD CLAIMED EXPENSES OF RS.22,76,174/- AGAINST THE RECE IPT OF RS.31,34,483/- IN RESPECT OF AMUL FREIGHT. DURING THE ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO PRODUCE T HE EXPENDITURE VOUCHERS AS CLAIMED IN THE PROFIT AND LOSS ACCOUNT . BUT THE ASSESSEE COULD NOT PRODUCE THE EXPENDITURE VOUCHERS. SINCE THE ASSESSEE FAILED TO FURNISH THE EXPENDITURE VOUCHERS, THE SAME WERE DIS ALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. 5. ON APPEAL, THE LD. CIT(A) ALLOWED 50% OF THE TOT AL RECEIPT AT RS. 31,34,483/- AS INCIDENTAL EXPENSES, BY OBSERVING AS UNDER: I HAVE CONSIDERED THE FINDINGS OF THE AO IN THE ASS ESSMENT ORDER AND SUBMISSION OF THE ASSESSEE. IN THE ASSESSMENT O RDER, THE AO ITA NO.532(ASR)/2014 ASSESSMENT YEAR: 2006-07 3 HAS MENTIONED THAT DESPITE BEING ASKED, THE ASSESSE E DID NOT PRODUCE THE DETAILS OF EXPENDITURE OF RS.22,76,174/ -. THE ASSESSEE WAS ASKED SPECIFICALLY BY THE AO ABOUT THE BILLS AN D VOUCHERS FOR THESE EXPENDITURES BUT HE FAILED TO DO SO. THE AO HAS, THEREFORE, DISALLOWED THE AMOUNT OF EXPENDITURE CLAIMED AT RS. 22,76,174/-. THE APPELLANT ON THE OTHER HAND STATED THAT, THE AP PELLANT HAS RECEIVED A SUM OF RS.31,34,483/- AS CARRIAGE CONTRA CT RECEIPT DURING THE YEAR AND ALSO PAID A SUM OF RS.22,76,174/- AS E XPENSE. IT WAS MENTIONED THAT IT IS NOT POSSIBLE TO EARN AN INCOME WITHOUT HAVING INCURRING EXPENSES TO EARN THAT INCOME. THE APPELLA NT IS SILENT ON THE ISSUE AS TO WHY THE EVIDENCES OF EXPENDITURES RELAT ING TO SUCH INCOME WERE NOT PRODUCED BEFORE THE AO. IT IS TRUE THAT THERE HAS TO BE SOME EXPENDITURE IN ORDER TO EARN AN INCOME AND TAKING A BALANCE VIEW OF THE MATTER, I ALLOW 50% OF THE TOTA L RECEIPT AT RS.31,34,483/- AS INCIDENTAL EXPENSES. THIS GROUND OF APPEAL OF APPELLANT IS PARTLY ALLOWED. 6. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE 50% OF THE TOTAL CONTRA CT RECEIPTS ON ACCOUNT OF FREIGHT PAID BY THE ASSESSEE. RATHER, THE LD. CI T(A) SHOULD HAVE DELETED THE WHOLE ADDITION MADE BY THE AO, WHICH WAS DULY A CCOUNTED FOR AND EXPLAINED BY THE ASSESSEE. THUS, THE ACTION OF THE LD. CIT(A) IS BAD IN LAW AND ILLEGAL AND REQUIRES TO BE NULLIFIED AND THE WH OLE ADDITION IS REQUIRED TO BE ALLOWED AS DEDUCTION. 7. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDE R OF THE ASSESSING OFFICER AND PLEADED THAT THE LD. CIT(A) WAS NOT JUS TIFIED IN LAW TO ALLOW 50% OF THE TOTAL CARRIAGE CONTRACT RECEIPTS AS INCI DENTAL EXPENSES WHEN THE ASSESSEE HAD NOT PRODUCED THE DETAILS OF EXPEN DITURE, WHICH SHOWED THAT THE BOOKS OF ACCOUNT PRODUCED WERE NOT COMPLET E AND CORRECT. 8. HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD, I DEEM IT APPROPRIATE AND IN T HE INTEREST OF SUBSTANTIAL JUSTICE TO REMIT THIS MATTER TO THE FIL E OF THE LD. CIT(A) TO BE ITA NO.532(ASR)/2014 ASSESSMENT YEAR: 2006-07 4 DECIDED AFRESH IN ACCORDANCE WITH LAW, AFTER TAKING INTO CONSIDERATION THE BREAK UP OF EXPENSES PAID AS FREIGHT DURING THE PRE CEDING 2-3 ASSESSMENT YEARS BY THE ASSESSEE, BUT BY AFFORDING ADEQUATE OPPORTUNITY OF HEARING THE ASSESSEE. NOTHING CONCRETE HAS BEEN PRODUCED BEFORE ME EITHER BY THE REVENUE OR BY THE ASSESSEE TO SUPPORT THEIR CASE. THE ASSESSEE, NO DOUBT, SHALL CO-OPERATE IN THE FRESH P ROCEEDINGS BEFORE THE LD. CIT(A). 6. IN THE RESULT, FOR STATISTICAL PURPOSES, BOTH TH E APPEALS ARE TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/04/ 2016. SD/- (A.D. JAIN) JUDICIAL MEMBER /SKR/ DATED: 27/04/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. SANJAY KUMAR GUPTA, JAMMU. 2. THE ITO WARD 1(3), JAMMU. 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.