Shri Rakesh Jadon, Panchmahal V. The Income tax Officer,Ward-2, Godhra

ITA 540/AHD/2011

• Counselvise Citation: 54020514 RSA 2011
• Duration Of Justice: 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 30-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 23-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: SUNIL H TALATI

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI G.C.GUPTA, VICE-PRESIDENT(AZ) AND SHRI B.P. JAIN, ACCOUNTANT MEMBER ./ I.T.A. NO.540/AHD/2011 ( / / / / ASSESSMENT YEAR : 2007-08) SHRI RAKESH JADON PROP. ADVANCE ENGINEERING AT TIMBAGAM, TA.GODHRA DIST.PANCHMAHAL / VS. THE ITO WARD-2 GODHRA ! '# ./$% ./ PAN/GIR NO. : ADXPJ 2204 M ( !& / // / APPELLANT ) .. ( '(!& / RESPONDENT ) !& ) ' / APPELLANT BY : SHRI SUNIL H.TALATI '(!& * ) ' / RESPONDENT BY : SHRI B.L.YADAV, SR. D.R. +, * -# / / / / DATE OF HEARING : 30/12/2011 ./ * -# / DATE OF PRONOUNCEMENT : 19.01.2012 '0 / O R D E R PER SHRI G.C. GUPTA, VICE-PRESIDENT (AZ): THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 2007-08 IS DIRECTED AGAINST THE ORDER OF THE LD.CIT(A)-VI, BAR ODA DATED 24/12/2010. 2. GROUNDS OF APPEAL ARE AS UNDER:- 1. THE ORDER PASSED BY THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW, CONTRARY TO LEGAL PRON OUNCEMENTS AND SAME BE QUASHED. ITA NO. 540/AHD/2011 SHRI RAKESH JADON VS. ITO ASST.YEAR - 2007-08 - 2 - 2. THE HONBLE CIT(A) HAS ERRED IN CONFIRMING THE ADHOC DISALLOWANCE AT 15% OF THE FOLLOWING EXPENSES * WIT HOUT APPRECIATING THE FACTS / DETAILS SUBMITTED DURING T HE COURSE OF HEARING. YOUR APPELLANT SUBMITS THAT THE DISALLOWA NCE BEING ON ADHOC BASIS WITHOUT ASSIGNING ANY REASON AND BEING VERY HARSH, BE DELETED NOW PARTICULARLY WHEN THE ACCOUNTS OF THE A PPELLANT ARE AUDITED AND NO ADVERSE REMARK HAS BEEN PASSED BY TH E AUDITORS. * RS. IN LAKHS LABOUR AND WAGES 51.58 PIECE RATE WORK 45.46 TRANSPORT CHARGES 01.63 CRAIN HIRE CHARGES 07.05 OFFICE RENT 00.60 MATERIAL EXPENSES 66.81 BANK INTEREST & OTHERS 00.91 TRAVELLING EXPENSES 01.12 MISCELLANEOUS EXPENSES (TELEPHONE, LIGHT BILL ETC.) 01.14 VEHICLE EXPENSES 02.65 TOTAL 178.95 2. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A SMALL INCOME-TAX PAYER AND HIS ACCOUNTS ARE AUDIT ED AND NO ADVERSE COMMENT HAD BEEN MADE BY THE CHARTERED ACCO UNTANT WHILE SUBMITTING THE AUDIT REPORT IN THE CASE OF THE ASSE SSEE. IT IS SUBMITTED THAT THE ASSESSING OFFICER HAD MADE A DI SALLOWANCE OF A FLAT RATE OF 15% OF THE EXPENSES WHICH IS VERY EXCE SSIVE. HE CONTENDED THAT IN THE IMMEDIATELY PRECEDING ASSESSM ENT YEAR, I.E. 2006-07 IN SIMILAR CIRCUMSTANCES A DISALLOWANCE OF RS.1 LAC ONLY WAS MADE BY THE ASSESSING OFFICER. ITA NO. 540/AHD/2011 SHRI RAKESH JADON VS. ITO ASST.YEAR - 2007-08 - 3 - 3. THE LD.DR HAS OPPOSED THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT IN THE ASSESSMENT YEAR 2006-07, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS ON THE LOWER SIDE AND THERE IS NO RES JUDICATA IN THE INCOME-TAX PROCEEDINGS. HE SUBMITTED THAT THE ASSESSING OFFICER WAS JUSTIFIED AND REASONABLE IN MAKING A DISALLOWANCE @ 15% OF THE EXPENSES WHICH W ERE UNVOUCHED AND UNVERIFIABLE. HE RELIED UPON THE ORD ERS OF THE ASSESSING OFFICER AND THE CIT(APPEALS). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS) AND GONE THROUGH THE NATURE OF THE EXPENSES CLAIMED BY THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS MAINTAINED HIS REGULAR BOOKS OF ACCOUN T WHICH WERE AUDITED BY THE C.A. AND NO ADVERSE REMARKS HAVE BEE N PASSED BY THE AUDITOR EXCEPT FOR THE EXPENSES INCURRED UNDER THE HEAD TELEPHONE EXPENSES. IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, IN SIMILAR FACTS, A DISALLOWANCE OF RS.1 LAC WAS MADE BY THE ASSESSING OFFICER. THE FACT THAT SOME OF THE EXPEN SES UNDER THE VARIOUS HEADS OF EXPENSES WERE NOT FULLY VOUCHED, COULD NOT BE DISPUTED BY THE ASSESSEE. IN THE FACTS OF THE CASE , WE HOLD THAT SOME DISALLOWANCE ON ACCOUNT OF UNVOUCHED EXPENSES IS CA LLED FOR. HOWEVER, IN THE FACTS OF THE CASE, CONSIDERING THE NATURE OF THE EXPENSES CLAIMED BY THE ASSESSEE AND PAST HISTORY O F THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE ENDS OF JUSTICE SHALL BE MET IF DISALLOWANCE IS RESTRICTED TO RS.5 LACS AS AGAINST THE DISALLOWANCE OF ITA NO. 540/AHD/2011 SHRI RAKESH JADON VS. ITO ASST.YEAR - 2007-08 - 4 - RS.26.84 LACS CONFIRMED BY THE CIT(APPEALS) AND THE GROUNDS OF THE APPEAL ARE PARTLY ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SD/- SD/- ( B.P. JAIN ) ( G.C. GUPTA ) ACCOUNTANT MEMBER VICE PRESIDENT (AZ) DATED 19/ 01 /2012 1.., .../ T.C. NAIR, SR. PS '0 * '-2 3'2- '0 * '-2 3'2- '0 * '-2 3'2- '0 * '-2 3'2-/ COPY OF THE ORDER FORWARDED TO : 1. !& / THE APPELLANT 2. '(!& / THE RESPONDENT. 3. - +4 / CONCERNED CIT 4. +4() / THE CIT(A)-VI, BARODA 5. 278 '- , , / DR, ITAT, AHMEDABAD 6. 8 9, / GUARD FILE. '0+ '0+ '0+ '0+ / BY ORDER, (2- '- //TRUE COPY// : :: :/ // / $ $ $ $ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION.. 30/12/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 02/01/2012 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S19.1.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19.1.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER