M/s Neelson Overseas, Agra V. Addl.CIT, Agra

ITA 618/AGR/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6773 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 03-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK MISHRA
• Assessee Lawyers: RAJENDER SHARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.618/AGR/2008 ASST. YEAR: 2005-06 M/S. NEELSON OVERSEAS, VS. ADDL. C.I.T., CIRCLE -1, AGRA. 55, TRANSPORT NAGAR, AGRA. (PAN : AABFN 1977 E) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDER SHARMA, ADVOCATE RESPONDENT BY : SHRI ASHOK MISHRA, SR. D.R. ORDER PER P.K. BANSAL, A.M.: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) DATED 06.08.2008. 2. GROUND NO.1 RELATES TO THE DISALLOWANCE OF RS.1, 47,417/- OUT OF THE TOTAL CLAIM OF RS.11,79,341/- MADE BY THE ASSESSEE IN RESPECT OF T HE CAR EXPENSES. 3. LD. A.R. VEHEMENTLY CONTENDED THAT THE DISALLOWA NCE MADE IS AT HIGHER SIDE AS THE PARTNERS ARE HAVING THEIR PERSONAL CARS. LD. D.R., ON THE OTHER HAND, RELIED ON THE ORDER OF THE A.O. 2 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD. WE NOTED THAT SINCE ASSESSEE FIRM HAVING SEVERAL CA RS, USER OF THE CAR FOR PERSONAL PURPOSE CANNOT BE DENIED BUT SINCE THE PARTNERS HAVING SEPARATE VE HICLES, THEREFORE, IN OUR OPINION IT WILL BE REASONABLE IF THE DISALLOWANCE IS RESTRICTED TO 1/1 0 TH OF THE TOTAL EXPENSES I.E. RS.1,17,934/-. WE, THEREFORE, ALLOW THIS GROUND PARTLY. 5. THE NEXT GROUND RELATES TO THE DISALLOWANCE OF R S.66,439/-. THE A.O. DISALLOWED 1/6 TH OF THE TOTAL EXPENDITURE ON PROBABLE PERSONAL USE OF T HE TELEPHONE BY PARTNERS AND THEIR FAMILY MEMBERS 6. AFTER HEARING RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, IN OUR VIEW, THE DISALLOWANCE OF THE TELEPHONE EXPENSES AT 1/10 TH OF THE TOTAL EXPENDITURE IS REASONABLE AND ACCORDINGLY WE SUSTAIN THE DISALLOWANCE TO 1/10 TH OF THE TOTAL EXPENSES. THIS GROUND THUS STANDS PARTLY ALLOWED. 7. GROUND NO.3 RELATES TO 1/10 TH OF THE FOLLOWING EXPENSES AMOUNTING TO RS.1,35,831 /- :- WORKERS WELFARE RS.9,09,556/- MISCELLANEOUS EXPENSES RS.83,252/- ELECTRIC REPAIR RS.2,94,729/- GENERATOR REPAIR & MAINTENANCE EXPENSES RS.70,775 /- 8. THE A.O. WAS OF THE VIEW THAT PART OF THE EXPENS ES HAS BEEN INCURRED FOR THE WELFARE OF THE WORKERS AND ACCORDINGLY HE DISALLOWED 1/10 TH OF THE EXPENSES HOLDING THAT THE EXPENSES SEEM TO BE EXCESSIVE. 3 9. AFTER HEARING RIVAL SUBMISSIONS, WE ARE OF THE V IEW THAT THE STAFF WELFARE EXPENSES HAVE BEEN INCURRED FOR THE BUSINESS PURPOSE. THIS HAS N OT BEEN DENIED BY THE A.O. THE EXPENSES ARE NOT PERSONAL EXPENSES OF THE ASSESSEE. ONCE THE EX PENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS, IN OUR OPINION, THE A.O. CANNOT DETERMINE THE QUANTUM OF EXPENDITURE WHICH IS TO BE ALLOWED TO THE ASSESSEE UNLESS AND UNTIL THE CASE F ALLS UNDER SECTION 40A(2) OF THE ACT. IF THE A.O. WAS OF THE VIEW THAT ANY OF THE EXPENDITURE HA S NOT BEEN INCURRED FOR THE PURPOSE OF BUSINESS, HE SHOULD HAVE POINTED OUT THAT EXPENDITU RE SPECIFICALLY BUT THE A.O. HAS NOT MADE ADHOC DISALLOWANCE BY OBSERVING THAT THE EXPENDITUR E SEEMS TO BE EXCESSIVE OR UNREASONABLE. WE, ACCORDINGLY, DELETE THE DISALLOWANCE OF RS.1,35 ,831/-. THUS, THIS GROUND OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 25.06.2010 ). SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 25 TH JUNE, 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY