M/s Janki Sons, Jalandhar V. Assistant Commissioner of Income Tax, Jalandhar

ITA 550/ASR/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7099 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-01-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 01-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMAR
• Section: 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP (SMC) BENCH AT JALANDHAR BEFORE SH. N. K. SAINI, HONBLE VICE PRESIDENT ITA NO. 550/ASR./2016 : ASSTT. YEAR : 2011-12 M/S JANKI SONS, G.T. ROAD, JALANDHAR VS ACIT, RANGE-III, JALANDHAR (APPELLANT) (RESPONDENT) PAN NO. AAEFJ8527H ASSESSEE BY : SH. SANDEEP VIJH, CA REVENUE BY : SH. M.S. PARMAR, DR DATE OF HEARING : 15.01.2019 DATE OF PRONOUNCEMENT : 17.01.2019 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 29.8.2016 OF LD. CIT(A)-2, JALANDHAR. 2. EARLIER THIS APPEAL WAS DISPOSED OF IN ITA NO. 5 50/ASR/2016 VIDE ORDER DATED 29.8.2016 WHICH WAS RECALLED ON TH E ISSUE RELATING TO THE SUSTENANCE OF DISALLOWANCE OUT OF FORWARDING AN D DELIVERY EXPENSES BY OBSERVING IN ORDER DATED 29.5.2018 IN M .A. NO. 47/ASR/2017 THAT THE COORDINATE BENCH INADVERTENTLY ESCAPED TO DECIDE THE GROUND NO. 1. ACCORDINGLY THE APPEAL WAS FIXED FOR HEARING. 3. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THA T THE ASSESSEE FILED THE RETURN OF INCOME DECLARING AN INCOME OF RS. 32, 55,250/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX AC T, 1961. LATER ON THE CASE WAS SELECTED FOR SCRUTINY. THE AO NOTICED THAT THE ASSESSEE HAD CLAIMED FORWARDING AND DELIVERY EXPENSES AMOUNT ING TO RS. 20,82,277/-. THE AO CONSIDERED IT REASONABLE TO DIS ALLOW 20% OF THE SAID EXPENSES AND MADE THE DISALLOWANCE OF RS. 4,16 ,515/-. ITA NO. 550/ASR./2016 M/S J ANKI SONS 2 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND SUBMITTED THAT NO SPECIFIC DEFECT HAD BE EN POINTED OUT BY THE AO WHILE EXAMINING THE VOUCHERS IN THE COURSE O F ASSESSMENT PROCEEDINGS AND THAT FOR SOME OF THE EXPENSES WHICH WERE SMALL IN AMOUNT, NO VOUCHERS COULD BE PRODUCED BEFORE THE AO . IT WAS FURTHER SUBMITTED THAT THE RATIO OF THE EXPENSES INCURRED W AS 0.89% AND 0.74% FOR THE ASSESSMENT YEAR 2007-08 AND 2008-09 RESPECT IVELY AND IN THE NEXT TWO YEARS IT REMAINED CLOSE TO 0.87% WHILE IN THE YEAR UNDER CONSIDERATION IT WAS ONLY 0.54%. THEREFORE, THE EXP ENSES CLAIMED WERE JUSTIFIED AND MAY BE ALLOWED. 5. THE LEARNED CIT(A), HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT THERE WAS FORCE IN THE CONTENTION OF THE ASSESSEE AS THE EXPENSES CLAIMED UNDER THIS HEAD IN A PROPORTION TO SALES HAD DECLINED IN THIS YEAR AS CO MPARED TO THE PRECEDING YEAR AND THAT AS REGARDS TO THE NON PRODU CTION OF SUPPORTING VOUCHERS BEFORE THE AO THE ASSESSEE HAS JUSTIFIED T HE SAME COULD NOT BE PRODUCED ON THE GROUND THAT THE SUPPORTING VOUCH ERS FOR SUCH EXPENSES COULD NOT BE OBTAINED FROM SOME OF THE SMA LL VENDORS. HE, THEREFORE, RESTRICTED THE DISALLOWANCE TO RS. 2,00, 000/-. 5. NOW THE ASSESSEE IS IN APPEAL. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(A) AND FURTHER SUBMITTE D THAT THE ASSESSEE PRODUCED ALL THE VOUCHERS AND THAT THE BOO KS OF ACCOUNTS WERE DULY AUDITED IN WHICH NO SPECIFIC DEFECT WAS P OINTED OUT BY THE ITA NO. 550/ASR./2016 M/S J ANKI SONS 3 AO, THEREFORE, THE DISALLOWANCE SUSTAINED BY THE LE ARNED CIT(A) WAS NOT JUSTIFIED. 7. IN HIS RIVAL SUBMISSIONS, THE LEARNED DR SUPPORT ED THE ORDERS OF THE AUTHORITIES BELOW. 8. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN TH E PRESENT CASE, THE LEARNED CIT(A) HIMSELF ACCEPTED THIS CONTENTION OF THE ASSESSEE THAT THE EXPENSES CLAIMED UNDER THIS HEAD ON PROPORTIO N TO THE SALES HAD DECLINED IN THE YEAR UNDER CONSIDERATION. HE ALSO A CCEPTED THAT NON PRODUCTION OF THE SUPPORTING VOUCHERS IN CERTAIN CA SES WAS ON ACCOUNT OF SMALLNESS OF THE EXPENSES INVOLVED. IN MY OPINIO N, WHEN THE EXPENSES INCURRED BY THE ASSESSEE WERE ON THE LOWER SIDE UNDER THIS HEAD IN COMPARISON TO THE PRECEDING AS WELL AS SUCC EEDING YEAR AND THE BOOKS OF ACCOUNTS WERE DULY MAINTAINED IN REGUL AR COURSE OF BUSINESS, THERE WAS NO JUSTIFICATION IN SUSTAINING THE ADDITION SUSTAINED OF RS. 2,00,000/-. IN THAT VIEW OF THE MA TTER, THE ADDITION SUSTAINED BY THE LEARNED CIT(A) IS DELETED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE COURT ON 17/01/2019) SD/- (N. K. SAINI) VICE PRESIDENT DATED: 17/01/2019 *SH* ITA NO. 550/ASR./2016 M/S J ANKI SONS 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 15.01.2019 PS 2. DRAFT PLACED BEFORE AUTHOR 17.01.2019 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 11. DATE OF UPLOADING