Assistant Commissioner of Income Tax, Sagar V. Shri Birmanand Sundrani, Sagar

ITA 61/JAB/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2253 (ITAT-JABALPUR)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 08-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY MISHRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 61/JAB/2017 / ASSESSMENT YEAR : 2014-15 ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE SAGAR VS SHRI BIRMANAND SUNDARANI, SINDHI COLONY, BINA, SAGAR (MP) PAN : ANJPS 0520 P / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI PD CHOUGULE, DR ASSESSEE BY : SHRI SANJAY MISHRA, ADV. / DATE OF HEARING : 14/03/2018 / DATE OF PRONOUNCEMENT: 16/03/2018 / O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-I, JABALPUR DATED 4 TH SEPTEMBER, 2017 PERTAINING TO ASSESSMENT YEAR 2014-15. 2. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE TO 30% OF SALARY WI THOUT APPRECIATING THE FACT THAT ALLOWABILITY OF SALARY AS ON EXPENSES DEPEN DS ENTIRELY ON SERVICE RENDERED AND NOT ON DATE OF PAYMENT. 2. WHETHER ON THE FACTS OF THE CASE, THE LD. CIT(A) HAS DIS ALLOWED 30% OF SALARY PURELY ON ESTIMATE BASIS WITHOUT ANALYZING AS TO WHAT SERVICES HAD BEEN RENDERED BY SO CALLED EMPLOYEES. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE TO 30% OF SALARY IG NORING THE FACT THAT THE ALLOWABILITY OF EXPENSES IN PREVIOUS ASSESSMENT YEAR WOULD NOT OBVIATE THE NEED TO ESTABLISH THE EXPENDITURE BEING WHOLLY AND EXCLUS IVELY FOR THE BUSINESS. ITA NO. 61/JAB/2017 ACIT VS. SHRI BIRMANAND SUNDRANI AY : 2014-15 2 4. THE LD. CIT(A) HAS ERRED IN NOT GIVING COGNIZANCE TO THE FACT THAT THE AMOUNT OF RS.49,00,000/- HAS NOT BEEN SHOWN AS CURRENT LIA BILITIES IN THE BALANCE SHEET FOR THE YEAR ENDING 31.03.2014 CONTRARY TO THE CONTE NTION OF THE ASSESSEE THAT THE SALARY WAS PAID IN THE FOLLOWING YEARS. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE IS A RAILWAY CONTRACTOR. DURING THE PERIOD UNDER CONSIDERATION, S ALARY FOR THE SUM OF RS.49,10,000/- WAS CREDITED AND CLAIMED IN PROFIT AND LOSS ACCO UNT. THE SAME SALARY WAS DULY PAID TO EMPLOYEES IN ASSESSMENT YEAR 2015-16 BY ACCOUNT PAYEE CHEQUE. 3.1 FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME ON 30.11.2014 DECLARING TOTAL INCOME OF RS.49,75,140/- AND THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 29.11.2016. WHILE FRAMING THE ASSESSM ENT, THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE SALARY PAI D BY THE ASSESSEE BY INVOKING PROVISIONS OF SECTION 40A(2)(B) OF THE ACT. A GAINST THIS ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A ) WHO, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, PARTLY AL LOWED THE APPEAL BY ALLOWING 70% OF THE SALARY CLAIMED BY THE ASSESSEE. 4. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPOR TED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT LEAR NED CIT(A) WAS NOT JUSTIFIED IN REDUCING THE ADDITION TO 30%. ON THE OTH ER HAND, LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LEARNED CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATER IAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORIT IES BELOW. WE FIND THAT LEARNED CIT(A) HAS GIVEN FINDING OF FACTS IN PARAGR APH 7.1.3 OF HIS ITA NO. 61/JAB/2017 ACIT VS. SHRI BIRMANAND SUNDRANI AY : 2014-15 3 ORDER. THESE WELL REASONED FINDING OF FACTS OF LD. C IT(A) HAVE NOT BEEN CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY M ATERIAL ON RECORD. MOREOVER, THE ASSESSING OFFICER HAS INVOKED THE PROV ISIONS OF SECTION 40A(2)(B) OF THE ACT WITHOUT SPECIFYING ABOUT THE REASON ABILITY OF THE EXPENDITURE. UNDER THESE FACTS, WE DO NOT SEE ANY INF IRMITY IN THE ORDER OF THE LEARNED CIT(A) WHICH IS UPHELD. THE APPEAL OF THE REVENUE IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE COURT ON 16 TH MARCH, 2018 AT JABALPUR. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER JABALPUR; DATED 16/03/ 2018 *BIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, JABALPUR 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, JABALPUR