ASHOK KUMAR GUPTA, Jaipur V. ITO, Jaipur

ITA 543/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5391 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 04-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Section: 143(3)

Judgement Text

1 ITA NO.543/JP/2014 IN THE INCOME TAX APPELLATE TRIBUNAL: JAIPUR BENCH [SMC] : JAIPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER I.T.A. NO. 543/JP/2014 ASSESSMENT YEAR: 2008-09 ASHOK KUMAR GUPTA, 12, GOPINATH MARG, NEW COLONY, JAIPUR PAN:ABAPG1621J VS THE INCOME TAX OFFICER, WARD 1 (3), JAIPUR (APPELLANT) (RESPONDENT) APPELLANT BY SHRI SHRAWAN KUMAR GUPTA, AR RESPONDENT BY SHRI RAJ MEHRA, JCIT DATE OF HEARING: 03-03-2016 DATE OF PRONOUNCEMENT: 9-03-2016 O R D E R PER MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF THE LEARNED CIT (A)-I, JAIPUR DATED 09-05-2014 FOR ASSE SSMENT YEAR 2008-09. THE GROUNDS RAISED ARE REPRODUCED BELOW:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISALLOWING SALARY OF RS.96,000/- PAID TO SH. S. N. GUPTA. THE SALARY HAS BEEN DISALLOWED WRONG AND AGAINST THE FACTS ON RECORD AND DESERVES TO BE QUASHED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADD ITION OF RS.96,000/- MADE ON THE GROUND THAT SALARY PERTAINS TO LAST YEA R IS NOT PAYABLE TO SH. S. N. GUPTA DUE TO HIS DEATH. THE ADDITION OF R S.96,000/- OF UNPAID SALARY IS TOTALLY ILLEGAL AND WITHOUT AND JUSTIFICA TION, HENCE ADDITION DESERVES TO BE QUASHED. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISALLOWING THE FO LLOWING EXPENSES: TELEPHONE EXPENSES : 13.337/- 2 ITA NO.543/JP/2014 VEHICLE RUNNING EXPENSES : 22,897/- THE EXPENSES HAVE BEEN DISALLOWED WITHOUT ANY JUST IFICATION AND ADDITION DESERVES TO BE QUASHED. 2. APROPOS GROUND NO.1, THE OBSERVATION OF THEA.O. AS PER THE ORDER PASSED U/S 143(3) DATED 06-12-2010 WERE THAT THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE EXPENDITURE OF SALARY OF RS.96,000/- PAID TO SHRI S . N. GUPTA. THE SAME WAS DISALLOWED. THE ASSESSEE WAS ASKED TO PRODUCE SHRI S. N. GUPTA. HOWEVER, IT WAS INFORMED THAT SHRI S. N. GUPTA WAS FATHER OF TH E ASSESSEE WHO HAD EXPIRED ON 04-08-2010. THE AO HAS PROCEEDED TO DISALLOW THE SAID AMOUNT OF RS.96,000/- WHICH WAS CHALLENGED BEFORE THE LEARNED CIT (A). EVEN, THE LEARNED CIT (A) HAS AFFIRMED THE ACTION OF THE AO. 3. ON THIS SHORT ISSUE I HAVE HEARD BOTH THE SIDES. THE EXPLANATION OF THE ASSESSEE WAS THAT IN THE PAST ALTHOUGH THE ASSESSEE HAS PAID SALARY TO HIS FATHER WHO HAD ESTABLISHED THE BUSINESS OF THE ASSESSEE BU T NO SUCH DISALLOWANCE EVER MADE IN THE PAST. IT HAS ALSO BEEN PLEADED THAT THE PROFIT RESULTS WERE BETTER DURING THE YEAR THAN THE PAST YEARS. HENCE, THERE W AS NO JUSTIFICATION OF SUCH DISALLOWANCE. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ESPECIALLY WHEN THE RESPECTED FATHER OF THE A SSESSEE IS NO MORE, IT IS UNJUSTIFIABLE AS WELL AS UNFAIR TO TAKE ANY ADVERSE VIEW AGAINST THE ASSESSEE. THE VIEW TAKEN BY THE REVENUE AUTHORITIES IS HEREBY REV ERSED AND DIRECTED TO DELETE THE ADDITION. 4. APROPOS GROUND NO.2, RELATING TO DISALLOWANCE OF TELEPHONE EXPENSES, TRAVELLING EXPENSES AND VEHICLE RUNNING EXPENSES, T HE AO HAS MERELY STATED THAT THE PAYMENTS WERE MADE IN CASH, HENCE, NOT SUBJECTE D TO VERIFICATION. AN ESTIMATED PERCENTAGE WAS APPLIED AND PROPORTIONATE DISALLOWANCE WAS MADE. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELL ATE AUTHORITY, THE DISALLOWANCE OF TRAVELLING EXPENSES WAS DELETED. HO WEVER, THE DISALLOWANCE PERTAINING TO TELEPHONE EXPENSES AND VEHICLE RUNNIN G EXPENSES WERE CONFIRMED. 3 ITA NO.543/JP/2014 5. CONSIDERING THE FACTUAL MATRIX OF THE CASE I HAV E NOTICED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD SHOWN SUB STANTIAL BROKERAGE EARNED ON SHARE TRANSACTION. MOREOVER, THE ASSESSEE HAS AL SO SHOWN NET PROFIT @14.87% ON THE TOTAL RECEIPT OF RS.50,96,883/- AS A GAINST NET PROFIT OF 10.72% ON THE TOTAL RECEIPT OF RS.25,68,510/- IT IS WORTH MENTIONING THAT THESE FIGURES HAVE BEEN MENTIONED DURING THE COURSE OF HEARING BE FORE ME VIDE WRITTEN SUBMISSION PLACED ON RECORD. BY ACCEPTING THE EXPLA NATION OF THE ASSESSEE I HEREBY HOLD THAT FOR RUNNING THE BUSINESS THE TELEP HONE EXPENSES AND VEHICLE RUNNING EXPENSES ARE REQUIRED AND IN THE ABSENCE OF ANY SPECIFIC INSTANCE QUOTED BY THE REVENUE DEPARTMENT THAT THOSE EXPENSE S WERE NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF ASSESSEE S BUSINESS, I HEREBY DIRECT TO DELETE THE ADDITION. AS A RESULT, BOTH THE GROUNDS ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH OF MARCH, 2016. SD/- (MUKUL K. SHRAWAT) JUDICIAL MEMBER JAIPUR, DATED: 9 TH MARCH, 2016 LAKSHMIKANT DEKA/SR. PS LAKSHMIKANT DEKA/SR. PS LAKSHMIKANT DEKA/SR. PS LAKSHMIKANT DEKA/SR. PS COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T., CONCERNED 4. CIT (APPEALS), JAIPUR. 5. D.R., ITAT, JAIPUR. 6. GUARD FILE TRUE C OPY BY ORDER ASSISTANT REGISTRA R, INCOME TAX APPELLATE TRIBUNA L, JAIPUR BENCH, JAIPUR.