M/s. R.L. Allied Industries, New Delhi V. ITO, New Delhi

ITA 6487/DEL/2014

• Counselvise Citation: 648720114 RSA 2014
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 16-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DEVI SHARAN SINGH
• Assessee Lawyers: K R MANJANI
• Keywords: Depreciation; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH SMC SMC SMC SMC : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT ITA NO ITA NO ITA NO ITA NO . .. . 6487/DEL/2014 6487/DEL/2014 6487/DEL/2014 6487/DEL/2014 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2007 2007 2007 2007 - -- - 08 0808 08 M/S R.L. ALLIED INDUSTRIES, M/S R.L. ALLIED INDUSTRIES, M/S R.L. ALLIED INDUSTRIES, M/S R.L. ALLIED INDUSTRIES, 5163, KOHLAPUR ROAD, 5163, KOHLAPUR ROAD, 5163, KOHLAPUR ROAD, 5163, KOHLAPUR ROAD, KAMLA NAGAR, KAMLA NAGAR, KAMLA NAGAR, KAMLA NAGAR, DELHI DELHI DELHI DELHI 110 007. 110 007. 110 007. 110 007. PAN : AAAFR5507P PAN : AAAFR5507P PAN : AAAFR5507P PAN : AAAFR5507P. .. . VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -20(1), 20(1), 20(1), 20(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.R. MANJANI, ADVOCATE. RESPONDENT BY : SHRI DEVI SHARAN SINGH, SR.DR. DATE OF HEARING : 16.07.2015 16.07.2015 16.07.2015 16.07.2015 DATE OF PRONOUNCEMENT : 03.08.2015 03.08.2015 03.08.2015 03.08.2015 ORDER ORDER ORDER ORDER THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-0 8 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXII, NEW DELHI DATED 29 TH SEPTEMBER, 2014. 2. THE ONLY GROUND OF APPEAL OF THE ASSESSEE IS AS UNDER :- BRUSHING ASIDE VARIOUS JUDGMENTS AND WITHOUT DISCUSSING THEM, THE LD.A.O. AS WELL AS THE LD.CIT(A) HAVE ERRED ON FACTS AS WELL AS IN LAW IN MAKING AND SUSTAINING FOLLOWI NG ADDITIONS MERELY ON SURMISES: (A) TRADING ADDITION RS.2,03,938/- (B) DEPRECIATION RS.23,513/- (C) BROKERAGE RS.1,20,264/- (D) MACHINERY REPAIRS RS.50,000/- INSPITE OF THE FACT THAT THE APPELLANT PRODUCED WHAT EVER MATERIAL HE COULD LAY ITS HANDS OR COLLECT FROM PERSON S FROM WHOM THINGS WERE GOT DONE, EVEN THOUGH I) ITS BOOKS OF ITA-6487/DEL/2014 2 ACCOUNTS FOR MANY YEARS BURNED IN FIRE ABOUT WHICH TH ERE IS NO DOUBT II) THE APPELLANT HAS ACCEPTED HISTORY AND III) INFORMATION SO FAR COLLECTED AND SUPPLIED SUPPORT AND PROVE AUTHENTICITY OF BOOKS IV) WHICH ARE EVEN AUDIT ED ONES. IT IS THEREFORE PRAYED THAT ABOVE ADDITIONS MAY KINDL Y BE DELETED. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FI RST TRADING ADDITION OF `2,03,938/- WAS UNCALLED FOR AS THERE WAS A FIRE AT THE PREMISES OF THE ASSESSEE WHICH DESTROYED ITS ENTIRE ACCOU NT BOOKS AND THE RELEVANT RECORD AND THIS FACT HAS BEEN PROVED BY THE ASSESSEE. MOREOVER, THE ASSESSEE HAS SHOWN GROSS PROFIT RATE OF 12% A ND THERE WAS NO BASIS FOR THE ASSESSING OFFICER TO APPLY GROSS PROFIT RATE OF 15%. HE SUBMITTED THAT IN THE EARLIER YEARS ALSO, THE SAME R ATE OF PROFIT WAS ACCEPTED BY THE DEPARTMENT AND HAS FILED THE COMPAR ATIVE CHART OF GROSS PROFIT RATE OF THIS YEAR AS WELL AS EARLIER THREE YEARS. 4. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERU SED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). I FIND THAT THE ASSESSEE HAS DECLARED 12% GROSS PROFIT DURING THE RELEVANT PERIOD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PLYWOOD AND ALLIED PRODUCTS. THE SAME RATE OF GROSS PROFIT WAS ACCEPTED IN THE EARLIER ASSESSMENTS FRAMED BY THE DEPARTMENT. NO MATERI AL HAS BEEN PRODUCED ON BEHALF OF THE DEPARTMENT TO JUSTIFY A HI GHER RATE OF GROSS PROFIT. IN THESE FACTS OF THE CASE, I AM OF THE VIEW THAT THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE BEING COMPARABLE WITH THE EARLIER THREE YEARS, NO CASE FOR ADDITION IS MADE OUT BY THE DEPARTM ENT AND THE TRADING ADDITION OF `2,03,938/- IS DELETED AND GROUN D NO.1(A) OF THE ASSESSEE IS ALLOWED. ITA-6487/DEL/2014 3 6. THE NEXT ISSUE IN GROUND NO.1(B) IS REGARDING DISALL OWANCE OF DEPRECIATION OF `23,513/-. 7. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASS ESSEE HAS FILED THE COPY OF VOUCHER BEFORE THE ASSESSING OFFIC ER AS WELL AS LEARNED CIT(A) OF THE PURCHASE OF MACHINERY AND THE COPY THEREOF HAS BEEN FILED AT PAGE 31 OF THE COMPILATION BEFORE THE TRIBUNAL. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERU SED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). I FIND THAT AT PAGE 31 OF THE COMPILATION FILED BEFORE THE TRIBUNA L, THE BILL AMOUNT OF THE PURCHASE OF OLD MACHINERY IS OF `11,960/- ONLY. THE ASSESSING OFFICER AND LEARNED CIT(A) HAVE RECORDED THAT THE A SSESSEE HAS NOT PRODUCED THE RELEVANT EVIDENCE IN SUPPORT OF THE CLA IM OF PURCHASE OF NEW ASSETS. IN THESE FACTS OF THE CASE, I CONFIRM THE OR DER OF LEARNED CIT(A) AND ACCORDINGLY, GROUND NO.1(B) OF THE ASSESSEE IS DISMISSED. 9. THE NEXT ISSUE IN GROUND NO.1(C) OF THE ASSESSEE IS RE GARDING DISALLOWANCE ON ACCOUNT OF BROKERAGE AMOUNTING TO `1 ,20,264/-. 10. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A SSESSEE HAS PAID THE BROKERAGE AMOUNT TO SHRI SURESH KUMAR AG GARWAL AND SHRI MUKESH AGGARWAL AND BOTH WERE EXISTING INCOME TA X ASSESSEES AND THE PAYMENTS WERE GENUINE. HE SUBMITTED THAT TD S WAS DEDUCTED AT THE RATE OF 5.10% ON THE BROKERAGE AMOUNT AND DE POSITED TO THE CREDIT OF THE CENTRAL GOVERNMENT. ITA-6487/DEL/2014 4 11. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESSIN G OFFICER AND THE LEARNED CIT(A). 12. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THA T THE FACT THAT BOTH THE PAYEES OF THE BROKERAGE AMOUNT WERE EXISTING INCOME TAX ASSESSEES AND THE TDS AMOUNT WAS DEDUCTED AND PAID TO THE CREDIT OF THE GOVERNMENT, COULD NOT BE CONTROVERTED ON BEHALF OF THE REVENUE. THE BUSINESS PURPOSE OF THE PAYMENT COULD NOT BE DOUBTE D BY THE ASSESSING OFFICER. THE EXPENDITURE TOWARDS BROKERAGE WA S FOUND LESSER IN THIS YEAR AS COMPARED TO THE EARLIER YEARS. I T SEEMS THAT THE ASSESSING OFFICER HAS NOT MADE ANY FURTHER ENQUIRY IN TH IS REGARD FROM THE ASSESSMENT RECORD OF THE PAYEE PARTIES AND THEY WERE NOT SUMMONED. IN THESE FACTS OF THE CASE, I HOLD THAT NO C ASE OF DISALLOWANCE OF BROKERAGE AMOUNT COULD BE MADE OUT B Y THE DEPARTMENT AND, ACCORDINGLY, DISALLOWANCE OF `1,20,2 64/- IS DELETED AND GROUND NO.1(C) IS ALLOWED. 13. THE NEXT GROUND IS GROUND NO.1(D) RELATING TO AM OUNT OF `50,000/- CLAIMED AS MACHINERY REPAIRS BY THE ASSESSEE. 14. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN TH E MANUFACTURING PROCESS OF PLYWOOD ETC., THE ASSESSEE HAS T O SPEND ON REPAIRS EXPENSES OF MACHINERY ON REGULAR BASIS. HE SUBMI TTED THAT THE ASSESSEE IS HAVING COMPLETE BILLS OF THE SAME AND THE COPI ES THEREOF WERE PRODUCED BEFORE THE REVENUE AUTHORITIES AND A C OPY THEREOF HAS BEEN FILED AT PAGES 7 TO 30 OF THE COMPILATION BEFOR E THE TRIBUNAL. 15. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). ITA-6487/DEL/2014 5 16. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). I FIND THAT THE ASSESSEE HAS GIVEN COMPLETE DETAILS AND HAS GIVEN COMPLETE SET OF SUPPORTING BILLS/VOUCHERS FOR THE PURCHASE OF VARIOUS IT EMS REQUIRED FOR REPAIRS IN THE MANUFACTURING PROCESS OF PLYWOOD. NO M ATERIAL HAS BEEN PRODUCED BY THE ASSESSING OFFICER ON RECORD TO DISBELIEV E THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE. IN THES E FACTS OF THE CASE, I AM OF THE VIEW THAT NO DISALLOWANCE OUT OF MA CHINERY REPAIRS COULD BE MADE BY THE DEPARTMENT. ACCORDINGLY, THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND GROUND NO.1(D) OF THE ASSESSEE I S ALLOWED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 3 RD AUGUST, 2015. SD/- (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S R.L. ALLIED INDUSTRIES, M/S R.L. ALLIED INDUSTRIES, M/S R.L. ALLIED INDUSTRIES, M/S R.L. ALLIED INDUSTRIES, 5163, KOHLAPUR ROAD, KAMLA NAGAR, 5163, KOHLAPUR ROAD, KAMLA NAGAR, 5163, KOHLAPUR ROAD, KAMLA NAGAR, 5163, KOHLAPUR ROAD, KAMLA NAGAR, DELHI DELHI DELHI DELHI 110 007. 110 007. 110 007. 110 007. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -20(1), NEW D 20(1), NEW D 20(1), NEW D 20(1), NEW DELHI. ELHI. ELHI. ELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR