Cannon Exports, Kolkata V. I.T.O.,Ward-31(3), Kolkata

ITA 671/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2797 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-08-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 03-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.671/KOL/2019 ASSESSMENT YEAR:2015-16 CANNON EXPORTS NEELKAMAL APARTMENT, 41, ELGIN ROAD, GROUND FLOOR, KOLKATA-700 020 [ PAN NO.AACFC 2790 D ] / V/S . INCOME TAX OFFICER WARD-31(3), 10B, MIDDLETON ROW, 4 TH FLOOR, KOLKATA-700 071 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI MIRAJ D SHAH, ADVOCATE /BY RESPONDENT SHRI RAJA SENGUPTA, JCIT-SR-DR /DATE OF HEARING 29-08-2019 /DATE OF PRONOUNCEMENT 30-08-2019 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2015-16 , ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-9, KOLKATAS O RDER DATED 21.01.2019 PASSED IN CASE NO.231/CIT(A)-9/WD-31(3)/2017-18/KOL, INVOLVIN G PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. I NOTICE AT THE OUTSET THAT THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE SEEKS TO REVIVE BOTH THE LOWER AUTHORITIES ACTION DISALLOWIN G ITS SALE PROMOTION EXPENSE OF 3,38,219/- IN THE CURSE OF ASSESSMENT AS AFFIRMED I N THE LOWER APPELLATE PROCEEDINGS. THE CIT(A)S DETAILED DISCUSSION TO THIS EFFECT REA DS AS UNDER:- /DECISION: I HAVE GONE THROUGH THE ASSESSMENT ORDER, GROUNDS O F APPEAL AND SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. ITA NO.671/KOL/2019 A.Y. 2015 -16 CANNON EXPORTS VS. ITO WD-31(3 ), KOL. PAGE 2 AFTER GOING THROUGH THE REASONS FOR DELAY IN FILING THE APPEAL, THE DELAY IN FILING OF APPEAL IS CONDONED. AS PER SUBMISSIONS MADE, NO ADJUDICATION IS REQUIRE D ON GROUNDS NOS. 1,2,5,6 AND 7. GROUND 3 & 4 RELATES TO DISALLOWANCES MADE OUT OF S ALES PROMOTION EXPENSES. AS PER ASSESSMENT ORDER, THE ASSESSEE DEBITED RS.36 ,71,472 TOWARDS PAYMENT OF SALES PROMOTION EXPENSES, OUT OF WHICH RS.3,38,219 WAS CLAIMED UNDER THE SUB- HEAD OTHER EXPENSES REGARDING SALES PROMOTION . THE AO STATED IN ASSESSMENT ORDER THAT ASSESSEE PRODUCED SOME SELF-M ADE BILLS TO SUBSTANTIATE THE EXPENSES AND THE SAME WERE NOT FOUND ACCEPTABLE AND THE ASSESSEE DIDNT FURNISH ANY FURTHER ARGUMENT. DURING APPELLATE PROCEEDINGS, THE APPELLANT ATTACHE D CERTAIN BILLS WITH SUBMISSIONS. IT HAS NOT BEEN EXPLAINED AS TO WHY TH E COMPLETE BILLS AND VOUCHERS WERE NOT PRODUCED BEFORE THE AO. A PERUSAL OF BILLS SHOWS THAT THESE ARE IN NATURE OF PERSONAL EXPENSES. FROM THE BILL S TATING TO BE RELATING TO GOLD COINS, IT IS SEEN THAT NO SUCH DETAILS AS TO NUMBER OF GOLD COINS MENTIONED THEREIN, INSTEAD IT HAS BEEN STATED TO BE GOLD ARTI CLES. FROM THE BILLS SHOWN AS SALES INCENTIVE DATED 15/10/2014 FOR RS.2827 AND RS .14460, IT IS SEEN THAT THESE ARE COMPRISING OF VARIOUS VOUCHERS WHICH ARE IN NAT URE OF PERSONAL EXPENSES. AS REGARDS PAYMENT OF RS.55000 MADE, IT HAS BEEN ST ATED TO BE PAID FOR INSTALLATION TO ONE DR. AVA DIHINGIA FOR A MACHINE SOLD FOR RS.2,60,000. NO DETAIL AS REGARDS IDENTITY, ADDRESS, PHONE NO. WORK EXPERIENCE OF DR. AVA DIHINGIA FURNISHED AND THUS THE SAME IS NOT VERIFIA BLE. NEITHER THE GROSS PROFIT TO THAT EXTENT HAS BEEN SHOWN. THE APPELLANT IS CLA IMING RS.55000 AS PAID FOR INSTALLATION ETC. ON A MACHINE COSTING RS.2,60,000 WITHOUT ANY SUPPORTING EVIDENCE. FROM THE PERUSAL OF DETAILS OF EXPENSES ATTACHED, I T IS SEEN THAT THE APPELLANT HAS NOT BEEN ABLE TO JUSTIFY THAT THOSE ARE NOT IN NATURE OF PERSONAL EXPENSES OF THE APPELLANT AND THAT THE SAME ARE WHOLLY AND EXCL USIVELY RELATED TO BUSINESS. THESE GROUNDS OF APPEAL ARE DISMISSED . 3. THIS ASSESSEE ADMITTEDLY TREATS IN BOOKS. THE RE IS FURTHER NO DISPUTE THAT IT HAD FILED ALL THE NECESSARY DOCUMENTARY EVIDENCE FO R THE PURPOSE OF RAISING THE IMPUGNED SALES PROMOTION CLAIM. THE REVENUES CASE IS THAT IT COULD NOT FILE THE RELEVANT PARTICULARS THAT FOR WHAT PURPOSE, IT HAD INCURRED THE IMPUGNED EXPENDITURE ON GOLD ARTICLES. MY ATTENTION IS FURTHER INVITED T O THE CIT(A)S FINDINGS TO THIS EFFECT. I NOTICE IN THIS BACKDROP THAT NEITHER THE ASSESSEE HAS BEEN ABLE TO PROVE THE IMPUGNED EXPENDITURE NOR ITS NEXUS WITH THE BUSINESS PURPOSE S IN ENTERITY NOR THE REVENUE COULD JUSTIFY ITS STAND OF DISALLOWING THE AMOUNT IN ISSU E ON TECHNICAL GROUNDS. I THEREFORE ITA NO.671/KOL/2019 A.Y. 2015 -16 CANNON EXPORTS VS. ITO WD-31(3 ), KOL. PAGE 3 DEEM IT APPROPRIATE TO RESTRICT THE IMPUGNED ISSUE OF 3,38,219/- TO THE EXTENT OF 38,219/- ONLY WITH A RIDER THAT SAME SHALL NOT BE T REATED AS A PRECEDENT IN ANY OTHER CASE OR ASSESSMENT YEAR; AS THE CASE MAY BE. 4. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOV E TERMS. ORDER PRONOUNCED IN OPEN COURT ON 30/08/2019 SD/- (S.S. GODARA) JUDICIAL MEMBE R KOLKATA, *DKP/SR.PS - 30/08/2019 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-CANNON EXPORTS NEELKAMAL APARTMENT, 41,E LGIN ROAD GROUND FLOOR, KOLKTA-20 2. /RESPONDENT-ITO WD-31(3), 10B, MIDDLETON ROW, 4 TH FLOOR, KOLAKTA-71 3. $ ' / CONCERNED CIT 4. ' - / CIT (A) 5. ( $ , $ / DR, ITAT, KOLKATA 6. , / GUARD FILE. BY ORDER/ , /TRUE COPY/ $,