M/S RAGHAV TRADING CORPORATION, BEAWAR V. Add.CIT, Jaipur

ITA 629/JPR/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87566 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 15-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAILASH MANGAL JCIT DR DHK
• Assessee Lawyers: M C BHANDARI
• Keywords: Depreciation

Judgement Text

ITA NO. 629/JP/2012 M/S. RAGAV TRADING CORPORATION VS. ADDL. CIT, RAN GE-III, JAIPUR 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 629/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 M/S. RAGHAV TRADING CORPORATION, 227, CITY CENTRE, SANSAR CHANDRA ROAD, JAIPUR CUKE VS. THE ADDL. CIT RANGE-III JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AABFR 5914K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI M.C. BHANDARI, C.A. JKTLO DH VKSJ LS@ REVENUE BY :SHRI KAILASH MANGAL , JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/03/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 20/03/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-III, JAIPUR DATED 02-04-2012 FOR THE ASS ESSMENT YEAR 2007-08 CHALLENGING THE CONFIRMATIONS OF FOLLOWING ADDITION S. (I) ADHOC DISALLOWANCES OF TRAVELING EXPENSES OF RS . 40,780/-BEING 10% OUT OF TOTAL TRAVELING EXPENSES A MOUNTING TO RS. 4,07,802/-. (II) ADHOC DISALLOWANCES OF OFFICE EXPENSES OF RS. 11,648/- BEING 10% OUT OF TOTAL OFFICE EXPENSES AMOUNTING T O RS. 1,16,478/-. ITA NO. 629/JP/2012 M/S. RAGAV TRADING CORPORATION VS. ADDL. CIT, RAN GE-III, JAIPUR 2 (III) ADHOC DISALLOWANCES OF CONVEYANCES, VEHICLE R EPAIRS AND DEPRECIATION ON VEHICLES OF RS. 25,943/- BEING 10% OUT TOTAL CONVEYANCE EXPENSES AMOUNTING TO RS. 1,89,151/-, V EHICLE REPAIR AND MAINTENANCE AMOUNTING TO RS. 28,477/- AN D RS. 41,833/- FOR DEPRECIATION ON VEHICLE. (IV) ADHOC DISALLOWANCES OF RS. 30,170/- BEING 10% OUT TOTAL TELEPHONE EXPENSES AMOUNTING TO RS. 3,01,696/-. (V) UPHOLDING THE INTEREST CHARGED OF RS. 1,638/- U /S 234D OF THE ACT. 2.1 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE ADDITIONS HAVE BEEN MADE WITHOUT ANY JUSTIFICATION, ARBITRARY MANNER A ND WITHOUT FINDING ANY DEFECTS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. TH E LD. AR CONTENDS THAT SIMILAR TYPE OF ADHOC DISALLOWANCES WERE MADE IN AS SESSMENT YEAR 2005-06 WHICH WERE CHALLENGED BY THE ASSESSEE. THE LD. CIT( A) VIDE HIS ORDER DATED 17-12-2009 HAD DELETED THE ADDITIONS AGAINST WHICH THE DEPARTMENT DID NOT PREFER ANY APPEAL. RELIANCE IS PLACED OF ITAT JODHP UR BENCH IN THE CASE OF LAKE PALACE HOTELS & MOTELS LTD. VS. ACIT 81 TTJ 65 7 (JODHPUR), HOLDING THAT ADHOC DISALLOWANCE MADE OUT OF MISC. EXPENSES WITHOUT RECORDING ANY ADVERSE FINDINGS COULD NOT BE SUSTAINED. SOME OF TH E GROUNDS RAISED BEFORE THE ITAT WERE CHALLENGED BY THE REVENUE BEFORE THE HON'BLE RAJASTHAN HIGH COURT. HOWEVER, DELETION OF ADHOC DISALLOWANCE WAS NOT CHALLENGED. ITA NO. 629/JP/2012 M/S. RAGAV TRADING CORPORATION VS. ADDL. CIT, RAN GE-III, JAIPUR 3 2.2 THE LD. CIT(A) HAS CONFIRMED THE ABOVE DISALLOW ANCES. THE AO HAS MADE ADHOC DISALLOWANCES HOLDING THAT CLAIMS PERTAI NING TO TOUR AND TRAVELS ARE PAID BY WAY OF CASH AND MOSTLY SELF MADE VOUCHE RS WERE PREPARED AND THE PERSONAL EXPENSES INCURRED CANNOT BE RULED OUT. THESE VAGUE AND GENERAL OBSERVATIONS MADE BY THE AO WITHOUT CITING ANY SPEC IFIC INSTANCES WERE CHALLENGED BEFORE THE LD. CIT(A). THE ALLEGATIONS O F THE AO THAT VOUCHERS WERE NOT VERIFIABLE WERE ALSO CHALLENGED. THE LD. C IT(A) WITHOUT APPRECIATING THE MATERIAL ADDUCED BY THE ASSESSEE C ONFIRMED THE ADHOC DISALLOWANCES AND SUMMARILY HELD THAT THERE WAS ABS ENCE OF PROPER DETAILS AND SUPPORTING RECORDS. 2.3 THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO VA RIOUS PAGES OF THE PAPER BOOK TO DEMONSTRATE THAT ALL THE RELEVANT DETAILS W ERE FILED BEFORE THE LOWER AUTHORITIES. THUS THE AHOC ADDITIONS BEING UNJUSTIF IED ARE PRAYED TO BE DELETED. 2.4 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE FACTS EMERGES THAT THE AO HAS NOT POINTED OUT EVEN A SINGLE INSTANCE OF EXPENDITURE WHICH IS IRREGULAR OR INFLATED. SIMILARLY, NO COGENT REASONS HAVE BEEN GIVEN TO THE VAGUE REASONS GIVEN BY THE AO TO THE ITA NO. 629/JP/2012 M/S. RAGAV TRADING CORPORATION VS. ADDL. CIT, RAN GE-III, JAIPUR 4 EFFECT THAT PERSONAL ELEMENT CANNOT BE RULED OUT. I N OUR CONSIDERED VIEW, THE AO HAS TO POINT OUT AT LEAST SOME INSTANCES TO INDI CATE THAT PERSONAL USAGE IS FOUND. THE GROUNDS RAISED BY THE ASSESSEE BEFORE TH E LD. CIT(A) AND ITAT ARE FULL OF PLEADINGS THAT ALL THE RELEVANT RECORD S WERE AVAILABLE AND PRODUCED BEFORE THE AO. THE LD. CIT(A) WITHOUT GOIN G INTO THE ISSUE HAS SUMMARILY UPHELD THE ORDER OF THE AO BY FOLLOWING O BSERVATIONS. THUS CONSIDERING THE NATURE AND QUANTUM OF THE AB OVE EXPENSE AND ALSO OTHER RELEVANT FACTS, AS DISCUSSED ABOVE, I FIND THE APPROACH OF THE AO QUITE FAIR AND REASONABLE UN DER THE GIVEN CIRCUMSTANCES. ACCORDINGLY, THE ADHOC ADDITIO NS TOWARDS TRAVELING EXPENSES (RS. 40780), OFFICE EXPENSES (RS . 11648), CONVEYANCE / REPAIRS AND DEPRECIATION OF VEHICLES ( RS. 25943) AND TELEPHONE EXPENSES (RS. 30710) ARE HEREBY CONFI RMED. CONSEQUENTLY, THIS GROUND OF APPEAL REJECTED. THE REASONINGS OF THE LD. CIT(A) DOES NOT ADJUDICAT E ON THE SPECIFIC ISSUES RAISED BY THE ASSESSEE. IN PAST ALSO, SIMILAR ADHOC DISALLOWANCES HAVE BEEN DELETED WHICH HAVE BEEN ACCEPTED BY THE DEPARTMENT. THUS WE FIND NO JUSTIFICATION IN THE ORDER OF THE LD. CIT(A) UPHOLD ING THE DISALLOWANCES AS MENTIONED ABOVE. THEREFORE, THEY ARE DELETED AND T HE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 629/JP/2012 M/S. RAGAV TRADING CORPORATION VS. ADDL. CIT, RAN GE-III, JAIPUR 5 3.1 THE GROUND NO. 5 OF THE ASSESSEE IS REGARDING CHARGING OF INTEREST U/S 234D WHICH IS CONSEQUENTIAL IN NATURE. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/03 /2015. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20 TH MARCH, 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. RAGHAV TRADING CORPORATION, , J AIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ADDL. CIT, RANGE-III, JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.629/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR