SMT RAINA GARG, Jaipur V. ACIT, Jaipur

ITA 61/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99496 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 16-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE:SHRI T.R. MEENA,AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NO. 61/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SMT. RAINA GARG PROP. M/S. GARG SALES CORPORATION, KAALI PALTAN, TONK CUKE VS. THE ACIT CIRCLE- 7 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAWPG 4732 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE - WRITTEN SUBMISSION JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 20 /11/2015 VKNS'K@ ORDER PER T.R. MEENA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-III, JAIPUR DATED 08-11-2012 FOR THE ASSES SMENT YEAR 2008-09 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS I N HER APPEAL. 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING ADDITIO N OF RS. 5,93,806/- FROM JUNGLE EXPENSES ACCOUNT (SAKH KATRA N) IN SPITE OF BETTER RESULTS AS WELL AS EXPENSES I.E. 30 .45% IN THIS YEAR, 36.56% IN LAST YEAR AND 57.25% IN A.Y. 2006-0 7 IN JUNGLE EXPENSES A/C WHICH HAS BEEN ACCEPTED BY AO. ALL EXPENSES ARE FULLY SUPPORTED THROUGH VOUCHERS AS MA INTAINED IN EARLIER YEARS. ITA NO.61//JP/2013 SMT. RAINA GARG VS. ACIT, CIRCLE- 7, JAIPUR . 2 2. THE LD. CIT(A) HAS ERRED FURTHER IN CONFIRMING 1 0% ADHOC DISALLOWANCE ON ACCOUNT OF SALARY, FILING EX PENSES, HAMALI EXPENSES, RENT OF JEEP MOTOR CYCLE ETC. , RE NT OF TRACTOR AND PETROL DIESEL EXPENSES WHICH ARE ALSO F ROM JUNGLE EXPENSES ACCOUNT. THESE ARE MOST REASONABLE IN COMP ARISON TO EARLIER YEARS AND SUPPORTED WITH VOUCHERS AS IN PAST. 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE DATE OF HEARING. HOWEVER, THE WRITTEN SUBMISSION HAS FILED BY THE AS SESSEE WHICH HAS BEEN TAKEN INTO CONSIDERATION WHILE DECIDING THE APPEAL OF THE ASSESSEE. 3.1 AS REGARDS GROUND NO. 1, THE ASSESSEE FILED ITS RET URN OF INCOME ON 29-09-2008 DECLARING TOTAL INCOME OF RS. 36,49,720/ - FROM SALE AND PURCHASE OF TENDUPATTA ON WHOLESALE BASIS WHICH IS USED IN MANUFACTURING OF BIRI. THE AO OBSERVED FROM THE AUD IT REPORT FURNISHED BY THE ASSESSEE THAT HE IS A WHOLESALE DEALER OF TE NDUPATTA WHICH IS A SEASONAL BUSINESS AND BASED ON LABOUR. THE AO OBSER VED THAT ASSESSEE PURCHASES TENDUPATTA THROUGH THE STATE MINOR FOREST PRODUCE & DEVELOPMENT COOPERATIVE FEDERATION LTD. AND THE COO PERATIVE SOCIETY DECIDES THE TERMS AND CONDITIONS TO PURCHASE THE TE NDUPATTA. AS PER ORDER SHEET ENTRY DATED 18-10-2010, THE AO ASKED THE ASSE SSEE TO PRODUCE THE BOOKS OF ACCOUNT ALONGWITH VARIOUS BILLS/ VOUCHERS FOR THE EXPENSES MADE UNDER VARIOUS HEADS WHICH WERE CHECKED ON TEST BASI S BY THE AO ON PRODUCTION OF THE BILLS/ VOUCHERS BY THE ASSESSEE. THE AO HAD GONE THROUGH THE NOTIFICATION NO.TENDUPATTA(2007)-1 DATE D 23-11-2006 ISSUED ITA NO.61//JP/2013 SMT. RAINA GARG VS. ACIT, CIRCLE- 7, JAIPUR . 3 BY STATE MINOR FOREST PRODUCE & DEVELOPMENT COOPERA TIVE FEDERATION LTD. ACCORDING TO THE TERMS AND CONDITIONS DECIDED BY THE SOCIETY, IT IS CLEARLY MENTIONED THAT ASSESSEE WILL PURCHASSE TEND UPATTA FROM PATTA COLLECTION CENTRE I.E. PHAD, LABOUR CHARGES FOR COL LECTION, PHAD MUNSHI, SHAKH KARTAN EXPENSES (BRANCH CUTTING EXPENSES) WIL L BE BORNE BY THE SOCIETY. THE AO OBSERVED THAT THE ASSESSEE HAD FURN ISHED A LIST OF VARIOUS JUNGLE EXPENSE IN WHICH EXPENSES ON BRANCH CUTTING (SHAKH KARTAN) HAD BEEN DEBITED FOR THE THREE HEADQUARTER KANNOD (2,99 ,931), ASHAPUR (1,54,050), KUIDANI (1,39,825). THE AO OBSERVED THA T THE EXPENSES CLAIMED BY THE ASSESSEE ARE NOT ALLOWABLE IN VIEW O F APPENDIX IV POINT NO. 5(1) OF NOTIFICATION NO. TENDUPATTA 2007-1 DATE D 23-11-2006 WHICH INDICATES THAT SOCIETY WILL BEAR THE BRANCH CUTTING EXPENSES . THUS TRHE AO DISALLOWED THE AMOUNT OF THREE HEADQUARTER EXPEN SES OF S 5,93,806/- AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3.2 THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO UPHELD THE EXPENSES DISALLOWED BY THE AO BY FOLLOWING OBSE RVATIONS. 02.3 I HAVE DULY CONSIDERED THE SUBMISSIONS OF TH E APPELLANT AND MATERIAL AVAILABLE ON RECORD. LABOUR EXPENSES DEBITED UNDER THE HEAD SHAKHA KATRAN ARE INCURR ED IN CASH AND SUPPORTED BY SELF MADE VOUCHERS. NAMES AND ADDRESS OF PAYEES ARE NOT MENTIONED IN THE VOUCHERS . IT SHOWS THAT THESE EXPENSES ARE NOT VERIFIABLE. NO SU CH EXPENSES HAVE BEEN CLAIMED IN A.Y. 2007-08. IN VIE W OF ITA NO.61//JP/2013 SMT. RAINA GARG VS. ACIT, CIRCLE- 7, JAIPUR . 4 THESE FACTS AND THE NOTIFICATION OF FEDERATION MENT IONED BY AO, DISALLOWANCE OF THESE EXPENSES IS UPHELD. 3.3 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 3.4 WE HAVE HEARD THE LD. DR AND PERUSED THE WRITTE N SUBMISSION FILED INCLUDING THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED THAT THE JUNGLE EXPENSES WERE INCURRED IN CASH AND SUPPORTED BY SE LF MADE VOUCHERS WHICH CANNOT BE VERIFIED. THE DISALLOWANCE OUT OF J UNGLE EXPENSES IN PREVIOUS YEARS WERE ALSO MADE BY THE AO WHICH HAD N OT BEEN DISPUTED BY THE PARTY. THE LD. AR HAS NOT GIVEN ANY CORRELATION BETWEEN THE TURNOVER THAT THESE EXPENSES WERE AS PER TERMS AND CONDITION S OF THE CONTRACT AND THESE EXPENSES WERE TO BE BORNE BY THE SOCIETY I.E . STATE MINOR FOREST PRODUCE & DEVELOPMENT COOPERATIVE FEDERATION LTD.. THEREFORE, THERE IS NO LIABILITY OF THE ASSESSEE TO INCUR SUCH EXPENSES EVEN THOUGH THESE EXPENSES WERE NOT WHOLLY AND EXCLUSIVELY INCURRED F OR THE BUSINESS PURPOSE. IT IS AN OBLIGATION ON THE PART OF THE ASS ESSEE TO DISCHARGE ITS ONUS WHICH HAD NOT BEEN DONE BY THE ASSESSEE. THERE FORE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS IS SUE WHICH IS UPHELD. 4.1 THE NEXT GROUND OF THE ASSESSEE IS REGARDING CO NFIRMING 10% ADHOC DISALLOWANCES MADE BY THE LD. CIT(A) ON ACCO UNT OF SALARY, FILING EXPENSES, HAMALI EXPENSES, RENT OF JEEP MOTOR CYCLE ETC. RENT OF TRACTOR AND PETROL & DIESEL EXPENSES UNDER JUNGLE EXPENSES ACCOUNT. ITA NO.61//JP/2013 SMT. RAINA GARG VS. ACIT, CIRCLE- 7, JAIPUR . 5 4.2 BRIEF FACTS OF THE ISSUE UNDER CONSIDERATION I S THAT THE AO HAD CONFIRMED THE DISALLOWANCES TO THE EXTENT OF 20% UN DER THE ABOVE HEADS FOR WANT OF PROPER BILLS AND VOUCHES BY THE ASSES SEE . THE AO OBSERVED THAT MOST OF THE EXPENSES UNDER THE ABOVE HEADS WER E MADE IN CASH WHICH WERE NOT VERIFIABLE. 4.3 THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO REDUCED THE ABOVE EXPENSES TO THE EXTENT OF 10% BY OBSERVIN G AS UNDER:- 0.3.3 ON DUE CONSIDERATION OF THE FACTS AVAILABLE ON RECORD, I DO NOT FULLY AGREE WITH THE CONTENTION OF THE APPELLANT. LD AR HAS NOT DENIED THAT MOST OF THE ABOVE EXPENSES HAVE BEEN INCURRED IN CASH AND ARE SUPPORT ED BY SELF MADE VOUCHERS. THE SAME ARE THEREFORE, NOT VER IFIABLE. HOWEVER, CONSIDERING THE BETTER GROSS PROFIT RATE S HOWN BY THE APPELLANT, DISALLOWANCE MADE @ 20% IS CONSIDERE D EXCESSIVE. THE SAME IS RESTRICTED TO 105 WHICH WILL MEET THE END OF JUSTICE. THE APPELLATE DECISIONS OF EARLIER YEARS ARE NOT APPLICABLE SINCE THEREIN LUMPSUM TRADING ADDITI ON WAS MADE AFTER REJECTING THE ACCOUNT BOOKS. THIS YEAR A O HAS MADE ADDITION BY WAY OF PART DISALLOWANCES OF CERTA IN EXPENSES WHICH WERE NOT FOUND FULLY VERIFIABLE. HEN CE, THE GROUND IS NOT COVERED BY EARLIER YEARS ORDER OF CIT (A) OR ITAT. 4.4 THE LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIE S. 4.5 WE HAVE HEARD THE LD. DR AND PERUSED THE WRITTE N SUBMISSION FILED INCLUDING THE MATERIALS AVAILABLE ON RECORD. WE FI ND THAT THE LD. CIT(A) HAS TAKEN INTO CONSIDERATION ALL THE ASPECTS AS TO REDUCTION OF DISALLOWANCES FROM 20% TO 10% UNDER THE ABOVE HEADS . THEREFORE, WE ITA NO.61//JP/2013 SMT. RAINA GARG VS. ACIT, CIRCLE- 7, JAIPUR . 6 CONCUR WITH THE FINDING OF THE LD. CIT(A) ON THIS ISSUE WHICH IS SUSTAINED. THUS GROUND NO. 2 OF THE ASSESSEE IS ALS O DISMISSED . 5.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 /11/ 2015. SD/- SD/- (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ( TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20/11/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT SMT. RAINA GARG, TONK 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE- 7, JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A) 3. VK;DJ VK;QDR@ CIT 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 5. XKMZ QKBZY@ GUARD FILE (ITA NO.61/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR