Shri Subhashchandra Gordhandas Amin, Nadiad V. The Income tax Officer,Ward-1, Nadiad

ITA 660/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5622 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 20-07-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 19-02-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K MADHUSUDHAN SRDR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.659-660/AHD/2008 ASSESSMENT YEARS: 2003-04 & 2004-05 DATE OF HEARING:20.7.10 DRAFTED:20.7.10 SHRI SUBHASCHANDRA GORDHANDAS AMIN, PORP. OF M/S. AARTI EXHIBITORS, B-2, JALDHARA APARTMENT, COLLEGE ROAD, NADIAD-387001 PAN NO.AHHPA6370K V/S . INCOME TAX OFFICER, WARD(1), NADIAD (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI VIVEK CHAVDA, AR REVENUE BY:- SHRI K. MADHUSUDHAN, SR-DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THESE TWO APPEALS BY ASSESSEE ARE ARISING OUT OF T HE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-IV, BARODA IN APPEAL NOS.CA B/IV-N-329 -330/06-07 BY EVEN DATE 28-11-2007. THE ASSESSMENTS WERE FRAMED BY I TO WARD-1, NADIAD U/S.143(3) R.W.S 147 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 29-12-2006 FOR ASSESSMENT YEARS 2003-04 AND 2004-05 RESPECTIVELY. 2. THE ONLY COMMON ISSUE IN THESE APPEALS OF ASSESS EE IS AS REGARDS TO CONFIRMATION OF DISALLOWANCES OF EXPENSES BY CIT(A) AT RS.1,05,345/- IN ASSESSMENT YEAR 2003-04 AND RS.2,97,883/- FOR ASSESSMENT YEAR 2004-05. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ASSESSEE I S ENGAGED IN THE BUSINESS OF FILM EXHIBITION AND ASSESSEE HAS TAKEN ON RENT A CINEMA HALL M/S. SHREYAS CINEMA. WE ITA NO.659-660/AHD/2008 A.YS. 03-04 & 04-05 SH. SUBHASHCHANDRA G AMIN V. ITO WD(1) NADIAD PAGE 2 FIND THAT ASSESSING OFFICER HAS MADE DISALLOWANCE O F THE FOLLOWING EXPENSES FOR ASSESSMENT YEAR 2003-04 AS UNDER:- SALARY EXPENSES RS. 45,500/- TRAVELING EXPENSES RS. 15,713/- COMMISSION & DALALI EXPENSES RS. 24,050/- ADVERTISEMENT EXPENSES RS. 20,080/- RENT EXPENSES RS.7,00,350/- TOTAL RS. 7,89,663/- AND ASSESSING OFFICER HAS ALSO MADE DISALLOWANCE OF THE FOLLOWING EXPENSES FOR ASSESSMENT YEAR 2004-05 AS UNDER:- ADVERTISEMENT EXPENSES RS. 27,120/- FILM EXHIBITION EXPENSES RS. 15,320/- SALARY EXPENSES RS. 1,06,562/- TRAVELING EXPENSES RS. 53,042/- COMMISSION & DALALI EXPENSES RS. 15,994/- OFFICE RENT EXPENSES RS. 60,000/- ELECTRIC EXPENSES RS. 9,450/- CONVEYANCE EXPENSES RS. 4,475/- OFFICE REPAIRING EXPENSES RS. 5,920/- RENT EXPENSES RS. 8,16,421/- TOTAL RS.11,14,304/- WE FIND THAT CIT(A) HAS CONFIRMED THE DISALLOWANCE OF EXPENSES EXCEPT RENT, BY GIVING FOLLOWING FINDING IN PARA-4.2 IN HIS APPELLATE ORDER FOR ASSESSMENT YEAR 2003- 04:- 4.2 WITH REGARD TO THE OTHER DISALLOWANCE OF RS.89 ,313/- (RS.7,89,663 RS.7,00,350),IT IS SEEN THAT ALL THE DISALLOWANCES PERTAIN TO EXPENSES WHICH HAVE BEEN INCURRED IN CASH AND FOR WHICH THE APPELL ANT HAS NOT BEEN ALE TO SUBMIT ANY DETAILS KEEPING IN VIEW THE FACT THAT TH E APPELLANT CHOSE TO FILE HIS RETURN OF INCOME ONLY AFTER THE SURVEY TOOK PLACE, AND HAS CLAIMED ALL THE EXPENSES IN CASH, THE ASSESSING OFFICER WAS JUSTIFI ED IN MAKING THE OTHER DISALLOWANCE OF RS.89,313/-. IN FACT, THE ASSESSING OFFICER HAS JUDICIOUSLY ALLOWED 2/3 RD OF THE EXPENSES CLAIMED ON FILM EXHIBITION EXPENSE S, TRAVELING EXPENSES, ADVERTISEMENT EXPENSES, COMMISSION AND DA LALI EXPENSES ETC. I THEREFORE, DO NOT SEE ANY REASONS TO INTERFERE WITH THE DISALLOWANCES MADE BY THE ASSESSING OFFICER OUT OF THE ABOVE EXPENSES AND THE SAME ARE CONFIRMED. SIMILAR ARE THE FINDING OF CIT(A) IN ASSESSMENT YEA R 2004-05. ITA NO.659-660/AHD/2008 A.YS. 03-04 & 04-05 SH. SUBHASHCHANDRA G AMIN V. ITO WD(1) NADIAD PAGE 3 5. WE FIND THAT ASSESSING OFFICER HAS ALLOWED 2/3 RD OF THE ABOVE EXPENSES CLAIM BY THE ASSESSEE BUT DISALLOWED 1/3 RD OF THE EXPENSES, ONLY ON THE REASON THAT ALL THE EXPENSES HAVE BEEN INCURRED IN CASH AND FOR WHICH A SSESSEE IS NOT ABLE TO SUBMIT THE DETAILS. IT IS NOT DENIED THAT EXPENSES ARE NOT INCURRED BY ASSESSEE AND THE ASSESSEE IS RUNNING THE BUSINESS AND FOR THAT MIGHT HAVE INCURRED EXPENSES. WE ARE OF THE VIEW THAT REASONABLE DISALLOWANCE WILL MEET THE ENDS OF JUSTICE TO THE EXTENT OF 10% OF THE ABOVE EXPENSES IN BOTH THE YEARS. ACCORD INGLY, WE DIRECT THE ASSESSING OFFICER TO DISALLOW TO THE EXTENT OF 10% ON THE ABO VE EXPENSES BECAUSE THE ASSESSEE IS UNABLE TO PRODUCE THE DETAILS. ACCORDI NGLY, THESE TWO APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. 6. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE PAR TLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 20/07/2010 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED : 20/07/2010 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-IV, BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD