Excel StockBroking Pvt. Ltd., Kolkata, Kolkata V. ACIT, Circle-5(2), Kolkata, Kolkata

ITA 597/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9319 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 26-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Section: 144; 143(3); 145(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.597/KOL/2019 ( / ASSESSMENT YEAR: 2015-16) EXCEL STOCK BROKING PVT. LTD. CENTRE POINT, 21, HEMANT BASU SARANI, 3 RD FLOOR, ROOM-309, KOLKATA VS. ACIT, CIRCLE-5(2), KOLKATA ./ ./PAN/GIR NO.: AABCE 8639 D (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SUBASH AGARWAL, ADVOCATE RESPONDENT BY : SMT. RANU BISWAS, ADDL. CIT / DATE OF HEARING : 31/10/2019 /DATE OF PRONOUNCEMENT : 10/01/2020 / O R D E R PER BENCH: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PER TAINING TO ASSESSMENT YEAR 2015-16, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-2, KOLKATA IN APPEAL NO. 10353/CIT(A)-2/17 -18, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFI CER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 11/12/2017 . 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1.FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. A.O. WAS NOT JUSTIFIED IN MAKING AN ADDITION AMOUNTING T O RS. 1,37,874/- BEING 20% OF RS. 6,89,473/-. EXCEL STOCK BROKING PVT. LTD. ITA NO.597/KOL/2019 ASSESSMENT YEAR:2015-16 P PP PA AA AG GG GE EE E | || | 2 22 2 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. A.O. WAS NOT JUSTIFIED IN MAKING AN ADDITION AMOUNTING T O RS. 95,800/- UNDER THE HEAD MOTOR CAR EXPENSE. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. A.O. WAS NOT JUSTIFIED IN MAKING AN ADDITION AMOUNTING T O RS. 66,730/- UNDER THE HEAD COMPUTER EXPENSE. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. A.O. WAS NOT JUSTIFIED IN MAKING AN ADDITION AMOUNTING T O RS. 66,157/- UNDER THE HEAD GENERAL EXPENSE, 36,000/- UNDER THE HEAD EXAMI NATION CHARGES, 11,264/- UNDER THE HEAD OFFICE MAINTENANCE & 18,300 /- UNDER THE HEAD ADVERTISEMENT EXPENSE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF GROUNDS OF APPEAL. 3. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEA L IS THAT ASSESSING OFFICER HAS MADE AD HOC ESTIMATED DISALLOWANCE WITHOUT REJECTIN G BOOKS OF ACCOUNTS. THE DETAIL OF AD HOC / ESTIMATED DISALLOWANCE UNDER VAR IOUS HEADS ARE GIVEN BELOW: I. DISALLOWANCE AMOUNTING TO RS. 137874/- UNDER TRA VELLING EXPENSES. THE LD. A.O DISALLOWED A SUM OF RS 137874 I.E 20% O F RS. 689473/- UNDER THE HEAD TRAVELLING EXPENSE ON THE GROUND THAT SATISFAC TORY SUPPORTING DOCUMENTS WERE NOT PROVIDED ALTHOUGH THE LD. COUNSEL SUBMITTED BE FORE US THAT ALL THE DOCUMENTS HAS BEEN SUBMITTED BY ASSESSEE DURING THE COURSE O F ASSESSMENT PROCEEDING. II. DISALLOWANCE AMOUNTING TO RS. 95800/- UNDER MOT OR CAR EXPENSE. THE LD. A.O DISALLOWED A SUM OF RS 95800/- UNDER TH E HEAD MOTOR CAR EXPENSE ON THE GROUND THAT SATISFACTORY SUPPORTING DOCUMENTS W ERE NOT PROVIDED ALTHOUGH THE LD. COUNSEL SUBMITTED BEFORE US THAT ALL THE DOCUME NTS HAS BEEN SUBMITTED BY ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDIN G. III. DISALLOWANCE AMOUNTING TO RS. 66730/- UNDER CO MPUTER EXPENSE. THE LD. A.O DISALLOWED A SUM OF RS 66730/- UNDER TH E HEAD COMPUTER EXPENSE ON THE GROUND THAT SATISFACTORY SUPPORTING DOCUMENTS W ERE NOT PROVIDED ALTHOUGH THE EXCEL STOCK BROKING PVT. LTD. ITA NO.597/KOL/2019 ASSESSMENT YEAR:2015-16 P PP PA AA AG GG GE EE E | || | 3 33 3 LD. COUNSEL SUBMITTED BEFORE US THAT ALL THE DOCUME NTS HAS BEEN SUBMITTED BY ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDIN G. IV. DISALLOWANCE AMOUNTING TO RS. 131721/- UNDER GE NERAL EXPENSE, EXAMINATION FEES ,OFFICE MAINTENANCE, ADVERTISEMENT ETC. THE LD. A.O DISALLOWED A SUM OF RS 66157/- UNDER TH E HEAD GENERAL EXPENSE, 36000/- UNDER THE HEAD EXAMINATION CHARGES, 11264/- UNDER THE HEAD OFFICE MAINTENANCE AND RS. 18300/- UNDER THE HEAD ADVERTIS EMENT EXPENSE ON THE GROUND THAT SATISFACTORY SUPPORTING DOCUMENTS WERE NOT PROVIDED ALTHOUGH LD. COUNSEL SUBMITTED BEFORE US THAT ALL THE DOCUMENTS HAS BEEN SUBMITTED BY ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING. V. DISALLOWANCE AMOUNTING TO RS. 18674/- UNDER INTE REST ON SERVICE TAX. THE LD. A.O DISALLOWED A SUM OF RS 18674/- UNDER TH E HEAD INTEREST ON SERVICE TAX WRONGLY. 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONFIRMED T HE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWING: I HAVE CONSIDERED THE GROUNDS OF APPEAL, STATEMENT OF FACTS AND SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE APPELLATE COMPANY AS WELL AS THE ORDER OF THE ASSESSING OFFICER FRAMED IN THE LIGHT OF THE MATERIALS AVAILA BLE ON RECORD BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE AO H AS MENTIONED THAT DURING THE TEST CHECKING, SOME BILLS, VOUCHERS ARE MISSING AND SOME ARE SELF-MADE IN RESPECT OF AFORESAID EXPENSES. I AGREE WITH THE AO THAT WITHOU T SUPPORTING BILLS AND VOUCHERS IT CANNOT BE HELD THAT THE EXPENSES WERE INCURRED EXCL USIVELY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. KEEPING IN VIEW OF THE FACTS AS ME NTIONED ABOVE, IN THE ABSENCE OF ANY COGENT MATERIAL EVIDENCE, I DO NOT FIND ANY INFIRMI TY IN THE ORDER OF THE ASSESSING OFFICER AND THE SAME IS HEREBY UPHELD. IN VIEW OF ABOVE, THIS GROUND OF APPEAL IS DISMISSED. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE AS SESSEE IS IN APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON T HE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. ON THE OTHER HAND THE LD. DR HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREAD Y NOTED IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. EXCEL STOCK BROKING PVT. LTD. ITA NO.597/KOL/2019 ASSESSMENT YEAR:2015-16 P PP PA AA AG GG GE EE E | || | 4 44 4 7. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THR OUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLU DING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT BOOKS OF ACCOUNTS OF ASSESSEE COMPANY ARE AUDITED AND ASSESSING OFFICER WHILE SCRUTINIZING THE EXPENSES MADE AD HOC ESTIMATED DISALLOWANCE. WE NOT E THAT THE ASSESSING OFFICER COULD HAVE VENTURED INTO ESTIMATION ONLY AFTER REJE CTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE U/S 145(3) AND THEREAFTER BY BEST JUDG MENT ASSESSMENT U/S 144 OF THE ACT. HERE IN THIS CASE, THE AO HAS NOT PASSED ANY O RDER U/S 144 OF THE ACT. THE AO THUS WITHOUT REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE HAS GONE FOR ESTIMATION ON SUSPICION AND CONJECTURES THAT THE ASSESSEE MAY BE INFLATING ITS EXPENSES WITH THE SELF-MADE VOUCHERS. WHILE SCRUTINIZING THE EXPE NDITURE IF THE EXPENSES CLAIMED ARE NOT HAVING ANY NEXUS TO THE BUSINESS OF THE ASS ESSEE OR IF THERE IS DEFICIENCY IN THE VOUCHERS OR THERE IS NO BILLS SUPPORTING THE IN CURRENCE OF AN EXPENDITURE, AT THE MOST EXPENSES TO THE EXTENT THAT ARE NOT SUPPORTED BY THE VOUCHERS CAN BE HELD TO BE NON-GENUINE AND CAN BE DISALLOWED BY THE AO; AND ITEM-WISE THE AO COULD HAVE DISALLOWED THE EXPENDITURE RATHER THAN GOING F OR ADHOC DISALLOWANCE OF PERCENTAGE BASIS OF THE EXPENSES CLAIMED BY THE ASS ESSEE WHICH ACTION OF THE AO IS ARBITRARY IN NATURE AND CANNOT BE SUSTAINED. THE REFORE WE DELETE ALL THE ADHOC/ESTIMATED DISALLOWANCE MADE BY AO AND GROUND NOS 1 TO 4 RAISED BY THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 10.0 1.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 10/01/2020 ( SB, SR.PS ) EXCEL STOCK BROKING PVT. LTD. ITA NO.597/KOL/2019 ASSESSMENT YEAR:2015-16 P PP PA AA AG GG GE EE E | || | 5 55 5 COPY OF THE ORDER FORWARDED TO: 1. EXCEL STOCK BROKING PVT. LTD. 2. ACIT, CIRCLE-5(2), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES