M/s Orbit Resorts (P) Ltd., Chandigarh V. DCIT, C1(1), Chandigarh

ITA 577/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1225 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GE E TINDERMANN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHES B, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA,ACCOUNTANT MEMBER ITA NO. 577/CHD/2018 ASSESSMENT YEAR: 2008-09 M/S ORBIT RESORTS LTD., V THE DCIT, SECTOR 9-C, CIRCLE 1(1), CHANDIGARH. CHANDIGARH. PAN : AAAC04024H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISHAN RESPONDENT BY : SHRI GEETINDER MANN, JCIT DATE OF HEARING : 06.08.2018 DATE OF PRONOUNCEMENT : 04.09.2018 ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER DATED 16.03.2017 OF CIT(A)-1 GU RGAON PERTAINING TO THE 2008-09 ASSESSMENT YEAR ON THE FOLLOWING GROUND S : 1. THAT THE ORDER PASSED UNDER SECTION 250(6) BY THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS)-1, GURGAON IN APPEAL NO. 463/P/10-11 DATED 16.03.2017 IS CONTRARY TO LAW AND FACTS OF TH E CASE. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN PRESENCE OF PROPER BOOKS OF ACCOUNTS MAINTAINED WITH SUPPORTING EVIDEN CE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, GURGAON GRA VELLY ERRED IN UPHOLDING THE ADDITION OF RS. 3,00,000/- MADE BY THE ID. ASSE SSING OFFICER ON ACCOUNT OF PAYMENT MADE TO LABOUR AND GARDENERS. 2. THE LD. AR INVITING ATTENTION TO THE ASSESSMENT ORDER SUBMITTED THAT THE ASSESSEE IN THE FACTS OF THE PRESENT CASE IS RUNNING A HOTEL BUSINESS. IN THE FACTS OF THE PRESENT CASE, THE ASSESSE E PRODUCED BOOKS OF ACCOUNT WHICH WERE EXAMINED AND THE AO MADE A DISALLOW ANCE OF RS. 3 LACS WHICH WAS CHALLENGED IN APPEAL BEFORE THE CIT(A) UNSU CCESSFULLY. IT WAS HIS SUBMISSION THAT THE EXPENSES DISALLOWED WERE THE PAYMENTS MADE TO LABOUR/GARDENERS TO MAINTAIN GARDEN ETC. AND TO DO THE ODD JOBS AND THESE NECESSARILY COULD NOT BE VOUCHED BY WA Y OF PRINTED BILLS ITA 577/CHD/2018 A.Y.2008-09 PAGE 2 OF 3 ETC. SINCE NO SPECIFIC INFIRMITY HAS BEEN POINTED OUT, THE ADD ITION, IT HAS BEEN REQUESTED, MAY BE DELETED. 3. THE LD. SR.DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS SEEN THAT THE ADDITION WAS MADE BY THE A O BY WAY OF A DISALLOWANCE IN THE FOLLOWING MANNER : '4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS VARIOUS DETAILS WERE CALLED FOR FROM THE ASSESSEE. THE BOOKS OF ACC OUNTS ALONG WITH RELATED BILLS/VOUCHERS WERE ALSO CALLED FOR AND EXAMINED AN D IT WAS FOUND THAT CERTAIN BILLS/ VOUCHERS WERE NOT VERIFIABLE. SOME O F THE PAYMENTS OF SMALL AMOUNTS WERE MADE IN CASH WHICH WERE NOT VERIFIABLE . THE ASSESSEE WAS CONFRONTED THE SAME. IN RESPONSE, THE ASSESSEE SUBM ITTED, 'WITH RESPECT TO THE TURNOVER OF THE ASSESSEE OF RS. 916465054/-, THESE ARE PETTY BILLS/VOUCHERS. THESE PETTY PAYMENTS HAVE BEEN MADE TO THE LABOUR/G ARDENERS WHO DO NOT PROVIDE PRINTED BILLS. HOWEVER ALL THESE EXPENSES HAVE BEEN DULY REFLECTED IN OUR BOOKS. 4.1 THE REPLY OF THE ASSESSEE HAS BEEN CONSIDER ED, HOWEVER THE ASSESSEE HAS NOT BEEN ABLE TO FULLY RECONCILE THE SAID EXPENSES WITH ITS BOOKS OF ACCOUNT. AFTER DISCUSSION WITH THE ASSESSEE, A LUMP SUM AMOU NT OFRS. 300000/- IS DISALLOWED ON ESTIMATED BASIS. HENCE AN AMOUNT OF R S. 300000/- IS ADDED BACK TO THE INCOME OF THE ASSESSEE. ' (EMPHASIS SUPPLIED) 5. THE SAID ADHOC ADDITION WAS UPHELD BY THE CIT(A) ON TH E FOLLOWING REASONING : 6.2 I HAVE CAREFULLY CONSIDERED THE APPELLANT'S SUBMISSIONS. IT IS AN ADMITTED FACT ON RECORD THAT THE EXPENSES UNDER REF ERENCE WERE NOT SUPPORTED BY PROPER BILL AND WERE CLAIMED ON THE BASIS OF SEL F MADE VOUCHERS. THE A.O HAS SPECIFICALLY POINTED OUT IN THE ASSESSMENT ORDE R THAT THE APPELLANT HAD NOT BEEN ABLE TO FULLY RECONCILE THE SAID EXPENSES WITH ITS BOOKS OF ACCOUNTS. KEEPING IN VIEW THE QUANTUM OF DISALLOWANCE, DISALL OWANCE OF RS. 3 LACS OUT OF THE AFORESAID EXPENSES CANNOT BE CONSIDERED TO B E EXCESSIVE. THE DISALLOWANCE MADE BY THE A.O IS ACCORDINGLY CONFIRM ED. THIS GROUND OF APPEAL IS DISMISSED. (EMPHASIS SUPPLIED) 6. WE FIND, ON GOING THROUGH THE CONSISTENT EXPLANATION OF THE ASSESSEE AND ON READING OF THE AFORESAID FINDINGS OF THE AU THORITIES BELOW THAT THE ADDITION CANNOT BE SUSTAINED. ADMITTEDLY , THE BOOKS SUPPORTED BY VOUCHERS WERE MADE AVAILABLE. THE AO AND THE CIT(A) HAVE FAILED TO POINT OUT WHICH BILL OR VOUCHER WAS NOT VER IFIABLE. THE ASSESSEE HAS CONSISTENTLY MADE A CLAIM THAT THESE WER E BILLS OF PAYMENTS MADE TOWARDS LABOUR AND GARDENERS WHICH CONS ISTENT ARGUMENT ON RECORD, WE FIND HAS NOT BEEN UPSET. IN THE SAID BACKGROUND, CONSIDERING THE PECULIAR FACTS AND CIRCUMSTA NCES OF THE PRESENT CASE, WE FIND NO GOOD REASON WHY ESTIMATED DISALLO WANCE IN THE FACTS OF THE PRESENT CASE CAN BE SAID TO BE JUSTIFIED. IN THE ABSENCE OF ITA 577/CHD/2018 A.Y.2008-09 PAGE 3 OF 3 ANY REBUTTAL, CONSIDERING THE FACTS OF THE PRESENT CASE , ADDITION IS DIRECTED TO BE DELETED. SAID ORDER WAS PRONOUNCED IN TH E OPEN COURT AT THE TIME OF HEARING ITSELF. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. SAID O RDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. ORDER PRONOUNCED IN THE OPEN COURT ON 04.09. 2018. SD/- SD/- (ANNAPURNA GUPTA) ( DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.