AMANPRIT SINGH CHABRA, Ajmer V. ACIT, Ajmer

ITA 612/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5293 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 12-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R PAREEK CIT DHK
• Keywords: Principle of natural justice
• Section: 37(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO. 612/JP/15 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SHRI AMANPREET SINGH CHHABRA 102,MAKHIJA TOWER BAPU NAGAR, AJMER CUKE VS. THE ACIT, CIRCLE-2, AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABGPC 2017 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : WRITTEN SUBMISSION JKTLO DH VKSJ LS@ REVENUE BY : SHRI G.R. PAREEK (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25.05.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 26/05/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), AJMER DATED 03.03.2015 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: THAT THE LD. CIT(A), AJMER HAS ERRED IN NOT FULLY DELETING THE DISALLOWANCE AND RESTRICTING THE DISALLOWANCE TO 50 % OF TOTAL DISALLOWANCE MADE BY AO WHICH IN THE FACTS & CIRCUM STANCES OF THE CASE AND IN THE LIGHT OF JUDGEMENTS OF HONBLE ITAT IN SIMILAR NATURE CASES, HAD HELD THAT NO DISALLOWANCE COULD BE MADE. ITA NO. 612/JP/15 SHRI AMANPREET SINGH CHHABRA, AJMER VS. THE ACIT, C IRCLE-2, AJMER 2 2. NONE APPEARED ON BEHALF OF THE APPELLANT. HENCE , THE MATTER IS BEING DECIDED BASED ON MATERIAL ON RECORD. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT DURING TH E ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD C LAIMED RS. 13,21,095/- ON A/C OF PETROL AND DIESEL EXPENSE S AND SOME OF THE BILLS DID NOT BEAR THE NAME OF THE ASSESSEE. THEREF ORE, THE AO DISALLOWED RS.1,32,110/- @ 10% OF RS. 13,21,095 AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3.1 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE LD. CIT(A) WHO HAS REDUCED THE DISALLOWA NCE TO 5% WITH THE FOLLOWING FINDINGS: : I HAVE CONSIDERED THE CONTENTIONS OF THE APPELLAN T AS WELL AS ASSESSMENT ORDER. IT IS SEEN THAT THE ASSESSEE WA S ENGAGED AS CARRYING AND FORWARDING AGENT OF PRODUCTS OF M/S P ARLE BISCUITS PVT. LTD. AND PARLE PRODUCTS PVT. LTD. DURING THE Y EAR UNDER CONSIDERATION AND CLAIMED PETROL AND DIESEL EXPENS ES OF RS.13,21,095/-. DURING ASSESSMENT, THE AO HAS NOTE D THAT SOME PETROL AND DIESEL BILLS DID NOT BEAR THE NAME OF THE ASSESSEE. NO OTHER DEFECTS HAS BEEN POINTED OUT BY THE AO IN PETROL AND DIESEL BILLS. DURING APPEAL, THE ASSESS EE HAS EXPLAINED THAT THE TRUCK DRIVERS WERE GIVEN PETTY CASH FOR PAYMENT OF DIESEL AND PETROL FOR JOURNEYS UNDERTAKE N WHEN TRANSPORTING GOODS BUT WHILE PURCHASING DIESEL OR P ETRO DUE TO ILLITERACY OR SEMI LITERACY AND ODD WORKING HOURS, THE DRIVERS OR THEIR ASSISTANTS COLLECTED SOME BILLS FROM PETROL P UMP WITHOUT PROPER CHECKING THEREOF EXCEPT QUANTITY AND AMOUNT . THE BOOKS OF ACCOUNTS OF THE ASSESSEE HAS BEEN MAINTAIN ED AND AUDITED U/S 44AB OF THE IT ACT AND EXPENSES HAS NOT BEEN SHOWN TO BE UNREASONABLE. IN VIEW OF EXPLANATION O F THE APPELLANT AND NATURE OF BUSINESS OF THE APPELLANT, IT WILL BE REASONABLE TO RESTRICT THE DISALLOWANCE TO RS.66,05 5/- I.E. 50% OF DISALLOWANCE MADE BY THE AO AND BALANCE AMOUNT I S DELETED. ITA NO. 612/JP/15 SHRI AMANPREET SINGH CHHABRA, AJMER VS. THE ACIT, C IRCLE-2, AJMER 3 3.2 THE APPELLANT SUBMITTED THAT DURING THE ASSESSM ENT PROCEEDINGS, THE LD. AO HAS MADE ADDITION OF RS.1,3 2,110/- ON ADHOC BASIS BY DISALLOWING 10% OF TOTAL PETROL AND DIESEL EXPENSES OUT OF TOTAL EXPENSES INCURRED & POSTED IN THE P & L ACCOU NT FOR RS. 13,21,095/- AS SOME SUPPORTING BILLS DID NOT BEAR T HE NAME OF THE ASSESSEE/APPELLANT. AGAINST THE SAID ORDER, ASSESS EE PREFERRED APPEAL BEFORE LD. CIT(A), AJMER AS THE SAID ADDITI ON WAS INCORRECT, AGAINST THE SPIRIT OF SECTION 37(1) OF THE IT ACT, 1961 AND ALSO AGAINST NATURAL JUSTICE. HOWEVER WHILE CONSIDERING THE MA TTER LD. CIT(A) AJMER REDUCE THE DISALLOWANCE TO 50%. HOWEVER, THE LD. CIT(A) AJMER HAS ERRED IN NOT APPRECIATING THE FACT THAT A LL THE EXPENDITURE WAS DONE IN RELATION TO THE BUSINESS, PROPERLY DO CUMENTED AND CORRECTLY POSTED IN THE BOOKS OF ACCOUNTS, HOWEVER DUE TO THE NATURE OF BUSINESS AND NATURE OF WORK FORCE INVOLVE D AND ODD HOURS OF WORKING, IN SOME BILLS THE NAME OF ASSESSEE/APPE LLANT WAS NOT WRITTEN BY THE SUPPLIER, WHICH DOES NOT SHOWS THE F ACT THAT THE FUEL WAS NOT USED IN ASSESSE/APPELLANT BUSINESS. FURTHE R THE LD. AO HAS NOT PUT OUT THE TOTAL NUMBER OF BILLS AND AMOUNT IN VOLVED, WHICH ACCORDING TO THE JUDGEMENTS OF HONBLE ITAT BENCHES IN VARIOUS DECISIONS WAS THE GROUND TO DELETE THE DISALLOWANCE . FURTHER THE ASSESSEE/APPELLANT RELIES ON THE FOLLOWING CASE LAW S IN SUPPORT OF HIS CONTENTION. ITA NO. 612/JP/15 SHRI AMANPREET SINGH CHHABRA, AJMER VS. THE ACIT, C IRCLE-2, AJMER 4 (I) TRIPAT KAUR VS. ACIT CIR 22(1) IN ITA NO.3244/ DEL/2012 WHERE HONBLE ITAT HAS HELD THAT ADDITION MADE ON ESTIMAT E BASIS CANNOT BE JUSTIFIED . FURTHER DISALLOWANCE ON SURMISES AND CONJECTURES BASIS SHALL NOT SUBSIST. (II) M/S CRESCENT CHEMICALS VS. ITO 19(2)(1) IN IT A NO.1355/ MUM/2010 WHERE THE HONBLE ITAT HAS HELD THAT AS LO NG AS EXPENDITURE IS FOR BUSINESS, AO HAS NO POWER TO DIS ALLOW THE SAME. THUS THE APPELLANT PRAYS TO DELETE THE BALANCE OF D ISALLOWANCE OF RS.53,430/-CONFIRMED BY THE LD. CIT(A), AJMER. 3.3 LD DR IS HEARD WHO HAS RELIED UPON THE ORDER OF THE LOWER AUTHORITIES AND SUBMITTED THAT APPROPRIATE RELIEF H AS ALREADY BEEN GRANTED BY THE LD CIT(A) AND HENCE, THE SAME SHOULD BE SUSTAINED. 3.4 WE HAVE HEARD LD DR AND PERUSED THE MATERIAL AV AILABLE ON RECORD. THE LD CIT(A) HAS GIVEN A FINDING THAT THE TRUCK DRIVERS WERE GIVEN PETTY CASH FOR PAYMENT OF DIESEL AND PETROL FOR JOURNEYS UNDERTAKEN WHEN TRANSPORTING GOODS BUT WHILE PURCHA SING DIESEL OR PETROL DUE TO ILLITERACY OR SEMI LITERACY AND ODD WORKING HOURS, THE DRIVERS OR THEIR ASSISTANTS COLLECTED SOME BILLS FR OM PETROL PUMP WITHOUT PROPER CHECKING THEREOF EXCEPT QUANTITY AN D AMOUNT. THE SAID FINDING HAS NOT BEEN CONTROVERTED BY THE REVEN UE AND THE EXPLANATION OF THE APPELLANT HAS THUS BEEN ACCEPTED FOR NON- MENTIONING OF ITS NAME ON THE PETROL AND DIESEL BIL LS. IN LIGHT OF THAT, WE ARE OF THE VIEW THAT WHERE THE EXPENDITURE HAS N OT BEEN DOUBTED AND THE EXPLANATION OF THE APPELLANT HAS BEEN ACCEP TED, THE ITA NO. 612/JP/15 SHRI AMANPREET SINGH CHHABRA, AJMER VS. THE ACIT, C IRCLE-2, AJMER 5 IMPUNGED ADDITION DESERVES TO BE DELETED. HENCE, W E DELETE THE IMPUNGED ADDITION OF RS 53,430 AND ALLOW THE SOLE G ROUND OF THE APPELLANT. IN THE RESULT THE APPEAL FILED BY THE APPELLANT IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 /0 5/2016. SD/- SD/- ( R.P. TOLANI ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 26/ 05 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI AMANPREET SINGH CHHABRA, AJ MER 2. THE RESPONDENT- THE ACIT, CIRCLE-2, AJMER 3. THE CIT(A) AJMER 4. THE CIT- AJMER, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO.612 /JP/15 ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR