M/s. Gurjanjhora Tea & Industries Ltd., Jalpaiguri V. ACIT, Circle - 1, Jalpaiguri, Jalpaiguri

ITA 681/KOL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9874 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 12-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Keywords: Set aside
• Section: 144

Judgement Text

1 ITA NO. 681/KOL/2018 GURJANJHORA TEA & INDUSTRIES LTD., AY- 2012-13 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 681/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. GURJANJHORA TEA & INDUSTRIES LTD. (PAN: AABCG1512F) VS. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, JALPAIGURI APPELLANT RESPONDENT DATE OF HEARING 23.09.2019 DATE OF PRONOUNCEMENT 27.09.2019 FOR THE APPELLANT SHRI SUBASH AGARWAL, ADVOCATE FOR THE RESPONDENT SHRI SUPRIYO PAL, JCIT, SR. DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A), JALPAIGURI DATED 08.02.2018 FOR AY 2012-13. 2. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE AS SESSEE DREW OUR ATTENTION TO THE FACT THAT THE ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL IS ONLY IN RESPECT OF AD-HOC DISALLOWANCES MADE BY THE AO IN RESPECT OF REPAIRS TO BUILDINGS R S.4,99,133/-, REPAIRS TO MACHINERY RS.14,51,562/-, REPAIRS TO VEHICLES RS.3,77,809/-, SUNDRY REPAIRS RS.4,37,141/-, GENERAL CHARGES RS.1,25,981/-, SUBSCRIPTION RS.81,558/- AND SUNDRY EXPENSES RS.1,31,392/- TOTALING TO RS.31,04,576/-. HOWEVER, ON APPEAL THE LD. CIT( A) RESTRICTED THE DISALLOWANCE TO 5% FROM 10% AS DONE BY THE AO. AGGRIEVED BY THE AD-HO C DISALLOWANCE OF 5% OF THE EXPENSES CLAIMED ASSESSEE IS BEFORE US. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ASSESSEE COMPANYS ACCOUNTS ARE AUDITED AND THE AO WHILE SCRUTINIZING THE EXPENSES CLAIMED BY THE ASSESSEE D ISALLOWED THE SAME TO THE TUNE OF RS. 8,86,176/- WHICH WAS 10 PERCENTAGE OF THE EXPENSES CLAIMED BECAUSE THE ASSESSEE PRODUCED BEFORE THE AO SELF-MADE DEBIT VOUCHERS. WE NOTE THA T THE AO COULD HAVE VENTURED INTO ESTIMATION ONLY AFTER REJECTING THE BOOKS OF ACCOUN TS OF THE ASSESSEE U/S. 145(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT) AND THEREAFTER RESORTED TO BEST JUDGMENT ASSESSMENT U/S. 144 OF THE ACT. HERE, IN T HIS CASE, ADMITTEDLY, THE AO HAS NOT 2 ITA NO. 681/KOL/2018 GURJANJHORA TEA & INDUSTRIES LTD., AY- 2012-13 PASSED ANY ORDER U/S. 144 OF THE ACT. THE AO THUS W ITHOUT REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE HAS GONE FOR ESTIMATION ON SUSPICION A ND CONJECTURES THAT THE ASSESSEE MAY BE INFLATING ITS EXPENSES WITH THE SELF-MADE VOUCHERS. ACCORDING TO US, THE AO WHILE SCRUTINIZING THE EXPENDITURE CLAIMED BY THE ASSESSE E FINDS THAT THE EXPENSES CLAIMED ARE NOT HAVING ANY NEXUS TO THE BUSINESS OF THE ASSESSEE OR IF THERE IS DEFICIENCY IN THE VOUCHERS OR THERE IS NO BILLS SUPPORTING THE INCURRENCE OF AN E XPENDITURE, AT THE MOST EXPENSES TO THE EXTENT THAT ARE NOT SUPPORTED BY THE VOUCHERS CAN B E HELD TO BE NON-GENUINE AND CAN BE DISALLOWED BY THE AO; AND ITEM-WISE THE AO COULD HA VE DISALLOWED THE EXPENDITURE RATHER THAN GOING FOR AD HOC DISALLOWANCE ON PERCENTAGE BA SIS OF THE EXPENSES CLAIMED BY THE ASSESSEE, WHICH ACTION OF THE AO PER-SE IS ARBITRAR Y IN NATURE AND CANNOT BE SUSTAINED. THEREFORE, ON THE SAME REASONING, WE SET ASIDE THE LD. CIT(A) ORDER WHEREIN ALSO HE HAD RESTRICTED THE EXPENSES CLAIMED @ 5% OF EXPENSES WH ICH IS ALSO AD HOC DISALLOWANCE. THEREFORE, THE ADDITION IS DIRECTED TO BE DELETED. OTHER GROUNDS OF APPEAL ARE GENERAL IN NATURE SO DISMISSED. 4. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27TH SEP TEMBER, 2019. SD/- (DR. A. L. SAINI) SD/-(ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :27TH SEPTEMBER, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. GURJANJHORA TEA & INDUSTRIES LT D., MERCHANT ROAD, P. S. KOTWALI, POST & DIST. JALPAIGURI-735101. 2 RESPONDENT ACIT, CIRCLE-1, JALPAIGURI 3. 4. 5. CIT(A), JALPAIGURI. CIT , JALPAIGURI DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR