WASI AHMED ALI AHMED KHAN, THANE V. ACIT CIR. 3, THANE, THANE

ITA 6462/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1297 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 03-11-2016
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Assessee Lawyers: DHIRENDRA M SHAH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 6462 / MUM/20 1 6 ( ASSESSMENT YEAR : 2012 - 13 ) WASI AHMED ALI AHMED KHAN, PROP. M/S. INDUSTRIAL EQUIPMENTS, KAHKASHAN BUNGALOW, NEXT TO SUNRISE TOWER, NR. BHARAT GEAR CO. LTD., BHOLENATH NAGAR, POST DAWLA, MUMBRA, THANE 400 612 VS. ACIT - CC - 3, THANE PAN/GIR NO. AFZPK4940D APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI DHIRENDRA M. SHAH REVENUE BY MS. BEENA SANTOSH DATE OF HEARING 18 / 04 /201 7 DATE OF PRONOUNCEME NT 20 / 04 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2, THANE, DATED 29/08/2016 IN THE MATTER OF ORDER PASSED U/S. 143(3) OF THE IT ACT. 2. IN THIS APPEAL, ASSESSEE IS AGGRIEVED FOR ADDITION OF RS.15,72,829/ - MADE ON ACCOUNT OF SUNDRY CREDITORS AS UNEXPLAINED. ASSESSEE IS ALSO AGGRIEVED FOR UPHOLDING DISALLOWANCE OF 10% ON ADHOC BASIS IN RESPECT OF DIRECT AND INDIRECT EXPENDITURE. 3. RIVAL CONTE NTIONS HAVE BEEN HEARD AND RECORD PERUSED. ITA NO. 6462/MUM/2016 WASI AHMED ALI AHMED KHAN 2 4. FACTS IN BRIEF ARE THAT ASSESSEE IS PROPRIETOR OF M/ S INDUSTRIAL EQUIPMENTS, ENGAGED IN THE BUSINESS OF MANUFACTURING OF INTER COOLERS, CONICAL MIXER, PER HEATER, RIBBON BLENDER, FEEDING CONVEYOR, NAUTA DRYER A ND SIMILAR INDUSTRIAL EQUIPMENTS. THE RETURN OF INCOME, DECLAR ING TOTAL INCOME AT 16,74,090/ - , WAS FILED ON 29.09.2012 AND THE SAME WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY THE STATUTORY NOTICES U /S 143(2) / 142( 1 ) OF THE ACT, ALONG WITH DETAILED QUESTIONNAIRE, WERE ISSUED AND DULY SERVED UPON THE ASSESSEE. IN COMPLIANCE, THE LD AR ATTENDED THE PROCEEDINGS AND FURNISHED THE REQUISITE DETAILS. THE A O AFTER CONSIDERING THE SUBMISSION MADE BY THE LD AR, FINALIZED THE ASSESSMENT ORDER U / S 143(3) OF THE ACT, ON 13.03.2015, AT TOTAL INCOME OF RS 42,49,920/ - , AFTER MAKING ADDITION OF RS. 15,92,465 / - , ON ACCOUNT OF UN EXPLAINED SUNDRY CREDITORS AND, RS.9,83,360/ - , ON ACCOUNT OF DISALLOWANCE OUT OF DIRECT A ND INDIRECT EXPENSES . 5. BY THE IMPUGNED ORDER CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF RS.15,72,829/ - ON ACCOUNT OF CREDITORS IN RESPECT OF FOLLOWING PARTIES. (I) BHARAT TEXTILES RS. 3,150/ - (II) HARSH ENTERPRISE RS. 3,51,897/ - (III) AMBUJA M ETAL CORPORATION RS.11,71,932/ - (IV) ALLIED WELD INDUSTRIES RS. 45,850/ - TOTAL RS. RS.15,72,829/ - ITA NO. 6462/MUM/2016 WASI AHMED ALI AHMED KHAN 3 6. I HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND FROM RECORD THAT AN AMOUNT OF RS.3,150/ - WAS PAID IN CASH TO M/S. BHARAT TEXTILES WASTE ON 01/04/20 12. THERE WAS PROPER ENTRY IN THE BOOKS OF ACCOUNTS , A CCORDINGLY, THERE IS JUSTIFICATION FOR THE ADDITION OF RS.3,150/ - SO MADE BY THE AO. 7. IN RESPECT OF AMBUJA METAL CORPORATION, I FOUND THAT PAYMENT WAS NOT MADE TO THE PARTY BECAUSE THERE WAS CLAIM FO R DEFECTIVE SUPPLY, THEREFORE, OUT OF TOTAL PAYMENT OF RS.15,25,545/ - ONLY AN AMOUNT OF RS.3,53,613/ - WAS PAID ON 09/01/2012 THROUGH ACCOUNT PAYEE CHEQUE. 8. SIMILARLY ON ACCOUNT OF CLAIM OF DEFECTIVE SUPPLY, PAYMENT OF RS.45,850/ - WAS NOT MADE TO M/S. AL LIED WELD INDUSTRIES, THE ASSESSEE HAS FILED CONFIRMATION O F THE PARTY. THIS AMOUNT WAS ADJUSTED AGAINST LABOUR BILLS. THIS CLIENT IS VENDOR CUM CUSTOMER OF THE ASSESSEE IN SO FAR AS PURCHASES ARE MADE AND USED IN PRODUCT SOLD TO HIM. IT APPEARS THAT LOWER AUTHORITIES HAVE NOT PROPERLY APPRECIATED THE DOCUMENTS TO REPLY FILED IN RESPECT OF HARSH ENTERPRISES, AMBUJA METAL CORPORATION AND ALLIED WELD INDUSTRIES. IN THE INTEREST OF JUSTICE, I RESTORE THE ADDITION MADE IN RESPECT OF THESE PARTIES TO THE FILE OF THE AO FOR DECIDING AFRESH AS PER LAW. 9 . ASSESSEE IS ALSO AGGRIEVED FOR CONFIRMING ADHOC DISALLOWANCE OF 10% IN RESPECT OF DIRECT AND INDIRECT EXPENDITURE. LEARNED AR HAS DRAWN OUR ATTENTION TO THE FINDING OF CIT(A) TO THE EFFECT THAT ASSESSEE HAS NOT MA INTAINED VERIFIABLE VOUCHERS / BILLS ONLY IN RESPECT OF PETTY EXPENSES. AS ITA NO. 6462/MUM/2016 WASI AHMED ALI AHMED KHAN 4 PER LEARNED AR DISALLOWANCE OF SUCH EXPENDITURE ON ACCOUNT OF PERSONAL ELEMENT WAS NOT JUSTIFIED. 8. I HAVE CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE NATURE OF EXPENDITURE SO INCURRED BY THE ASSESSEE, SOME OF WHICH ARE STATUTORY PAYMENT FOR WHICH NO DISALLOWANCE CAN BE MADE ON ACCOUNT OF PERSONAL ELEMENT. KEEPING IN VIEW THE TOTALITY OF FACTS A ND CIRCUMSTANCES OF THE CASE, I RESTRICT THE DISALLOWANCE TO THE EXTENT OF 5% OF S UCH EXPENSES. I DIRECT ACCORDINGLY. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 20 / 04 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATE D 20 / 04 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//