Shri Karsan Velji Bhimani, V. The Income Tax Officer, Ward-1, Bhuj

ITA 579/RJT/2012

• Counselvise Citation: 57924914 RSA 2012
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 22-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE DR F C
• Assessee Lawyers: J C RANPURA CA F

Judgement Text

C I , IN THE INCOME TAX APPELLATE TRIBU N AL; RAJKOT BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAVA, AM IT A NO . 579 / RJT/20 12 E / ASSESSMENT YEAR : 20 0 8 - 0 9 SHRI KARSAN VELJI HIRANI, NAVAV AS, BHARASAR, TALUKA BHUJ PAN : AAXPH 6580 P ( V / APPELLANT) VS. ITO, WARD - 1, BHUJ AV / RESPONDENT EF / ASSESSEE BY SHRI J C RANPURA, CA F / REVENUE BY SHRI VILAS V. SHINDE, DR F C /DATE OF HEARI NG 29 . 0 7 .2013 F C / DATE OF PRONOUNCEMENT 31 . 0 7 . 2013 / ORDER . . [ , 4 / T. K. SHARMA, J. M . : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER DATED 08.08.2012 OF LD CIT (A) - II, RAJKOT FOR THE ASSESSMENT YEA R 200 8 - 0 9 . 2 . THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL , DERIVING COMMISSION INCOME FROM LIC OF INDIA. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED HIS RETURN OF INCOME ON 30.06.2008 DECLARING TOTAL INCOME AT RS.2,24,570/ - . THE ASSESS ING OFFICER NOTICED FROM THE P&L ACCOUNT THAT THE ASSESSEE HAS SHOWN COMMISSION RECEIPT OF RS.18,53,882/ - . AFTER CLEARING VARIOUS EXPENSES TO THE TUNE OF RS.16,00,532/ - , THE ASSESSEE HAS SHOWN NET PROFIT OF RS.2,53,350/ - WHICH WORKS OUT TO ONLY 13.06% OF T HE GROSS RECEIPTS. THE EXPENSES MAINLY CONSIST OF SALARY EXPENSES AMOUNTING TO RS.13,79,786/ - WHICH IS TABULATED BY THE ASSESSING OFFICE R IN PARAGRAPH 2 OF THE ASSESSMENT ORDER. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER DISALLOWED THE SALARY EXPENSE S TO THE TUNE OF RS.11,00,000/ - OUT OF TOTAL SALARY EXPENSES CLAIMED AT RS.13,79,786/ - . ON APPEAL, IN THE IMPUGNED ORDER, THE LD CIT(A) CONFIRMED THE ADDITION OF RS.11,00,000/ - FOR THE DETAILED REASONS GIVEN IN PARAGRAPH NOS. 7 579 - RJT - 2012 KARSAN VELJI HIRANI 2 AND 7.1 OF THE IMPUGNED ORDER . AGGRIEVED BY THE ORDER OF LD CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUNDS: - 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - II, RAJKOT [CIT(A)] ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING DISALLOWANCE OF RS.11,00,000/ - MADE OUT OF TOTAL SALARY EXPENSE OF RS.13,79,786/ - . THE ESTIMATED DISALLOWANCE IS ONLY ON CONJECTURES AND SURMISES AND MAY KINDLY BE DELETED. 3.0 YOUR HONORS APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY OR MORE GROUNDS OF APPEAL ON OR BEFORE THE HEARING OF APPEAL. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF THE ASSESSEE SHRI J C RANPURA, CA APPEARED AND POINTED OUT THAT THE ASSESSEE IS A HANDICAPPED PERSON AND NEEDS ASSISTANCE OF VARIOUS EMPLOYEES TO EARN THE COMMISSION INCOME. THE LD COUNSEL SUBMITTED THAT BOTH THE ASSESSING OFFICER AND LD CIT(A) ARE NOT JUSTIFIED IN MAKING AND CONFIRMING THE DISALLOWANCE OF RS.11,00,000/ - ON DOUBTS AND SUSPICION AND HE REITERATED ON THE SUBMISSIONS MADE BEFORE THE LD CIT(A). 4. AS AGAINST THIS, SHRI VILAS V. SHINDE, DR APPEARED ON BEHALF OF THE REVENUE, VEHEMENTLY SUPPORTED THE ORDER OF LD CIT(A). HE SUBMITTED THAT THE ASSESSING OFFICER MADE A LEDGER COPY OF SALARY ACCOUNT AS ANNEXURE - A AND PHOTOCOPY OF UNSIGNED VOUCHERS AS ANNEXURE - B TO THE ASSESSMENT ORDER, WHICH CLEARLY INDICATES THAT ALL THES E VOUCHERS HAVE BEEN PREPARED AT SINGLE SITTING ON A LATER DATE , WHEN CALLED FOR VERIFICATION. THE LD DEPAR TMENTAL REPRESENTATIVE POINTED OUT THAT LOOKING TO THE CONSPICUOUS FACTS AND EVIDENCE S BROUGHT ON RECORD BY THE ASSESSING OFFICER, THE ADDITION OF RS.11,00,000/ - CONFIRMED BY THE LD CIT(A) BE UPHELD. 5. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GON E THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT ADDITION OF RS.11,00,000/ - HAS NOT BEEN MADE BY THE ASSESSING OFFICER ON DOUBT AND SUSPICION. IN PARAGRAPH 2.1 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS MENTIONED 579 - RJT - 2012 KARSAN VELJI HIRANI 3 THAT SA LARY VOUCHERS HAVE BEEN PREPARED AT ONE SITTING ON A LATER DATE WHEN CALLED FOR IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE VOUCHERS ARE UNSIGNED. IN PARAGRAPH 2.2 AND 3 ON PAGE NO.3 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS MENTIONED THAT MAJOR PART OF THE LIC COMMISSION RECEIPTS IS WITHDRAWN IN CASH ONLY IN THE LAST QUARTER OF THE YEAR; T HEREFORE IT IS IMPOSSIBLE TO DISBURSE CASH SALARY IN EARLIER MONTHS EVEN ON ASSUMPTION THAT HE HAD IN FACT HIRED SUCH LARGE NUMBER OF EMPLOYEES . . B EFORE BOTH THE DEPARTMENTAL AUTHORITIES BELOW AS WELL AS BEFORE US , THE ASSESSEE HAS FAILED TO DEMONSTRATE THAT THE SA LARY PAID TO VARIOUS EMPLOYEES IS GENUINE EXPENDITURE. WE ARE, THEREFORE, OF THE VIEW THAT THE LD CIT(A) IS LEGALLY AND FACTUALLY CORRECT IN CONFIRM ING THE DISALLOWANCE RS.11,00,000/ - OUT OF TOTAL SALARY EXPENSES OF RS.13,79,786/ - . WE, THEREFORE, DECLINE TO INTERFERE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREI NABOVE. SD/ - SD/ - ( D. K. SRIVASTAVA ) (T. K. SHARMA) ,A / ACCOUNTANT MEMBER E / JUDICIAL MEMBER / ORDER DATE 31 . 07 .2013 . /RAJKOT * BT T 4JO O / COPY OF ORDER FORWARDED TO: - 1 . V / APPELLANT - SHRI KARSAN VELJI HIRANI, NAVAVAS, BHARASAR,TALUKA BHUJ 2 . AV / RESPONDENT - ITO, WARD - 1, BHUJ 3 . I / CONCERNED CIT - I, RAJKOT 4 . - / CIT (A) - II, RAJKOT 5 . EEI , C I , / DR, ITAT, RAJKOT 6 . / GUARD FILE. / BY ORDER , TRUE COPY PRIVATE SE CRETARY INCOME TAX APPELLATE TRIBUNAL, RAJKOT