M/s. Sanguine Engineering Works, Howrah V. ITO, Ward - 48(3), Kolkata, Kolkata

ITA 696/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2499 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2010
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 09-04-2010
• Court: TRIBUNAL
• Department Lawyers: P C NAYAK
• Assessee Lawyers: M C GOPE
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : KOLKATA [BEFORE HONBLE SMT. DIVA SINGH, JM & SHRI C.D.RAO , AM] I.T. A. NO. 696/KOL/2010 ASSESSMENT YEAR 2006-07 M/S. SANGUINE ENGINEERING WORKS -VS- I.T.O., WARD -48(3), KOLKATA PAN: AAKFS 9978 D KOLKATA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.C.GOPE RESPONDENT BY : SHRI P.C.NAYAK O R D E R PER SMT. DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-XXX, KOLKATA DATED 03.12.2009 PERTAINING TO 2006-07 A.YR . WHEREIN THE ASSESSEE BY WAY OF GROUNDS HAS AGITATED TWO ISSUES NAMELY : THE CONFIR MATION OF ADDITION OF RS.35,000/- MADE BY THE AO ON AN ESTIMATE BASIS; AND THE ACTION OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.39,010/- ON ACCOUNT OF PAYMENT OF LA BOUR CHARGES TO M/S. KOLLEY ENGINEERING. THE SAME HAS BEEN HELD TO BE BOGUS PAY MENT RELYING UPON THE INSPECTORS REPORT WHEREIN IT IS CONTENDED THE ASSE SSEE WAS NOT GIVEN AN OPPORTUNITY TO REBUT THE SAME. 2. ADDRESSING THE FIRST ISSUE ATTENTION WAS INVITE D TO THE ASSESSMENT ORDER AND THE IMPUGNED ORDER. IT WAS SUBMITTED BY THE LD. AR THAT THE VOUCHERS IN REGARD TO THE EXPENDITURE CLAIMED UNDER DIFFERENT HEADS WERE ALL PRODUCED BEFORE THE AO WHO HOWEVER HAS MADE ESTIMATE HOLDING VOUCHERS IN SUPPORT OF WHICH SUFFICIENT DOCUMENTS WERE NOT PRODUCED. MOREOVER, S OME VOUCHERS WERE NOT PROPERLY VOUCHED AS TO THE SIGNATURE OF THE RECIPIENTS. IT WAS THE SUBMISSION OF THE LD. AR THAT THE ASSESSEE IS A MANUFACTURER OF RAILWAY LOCOMOTIV E SPARES AND BUSINESS EXPENDITURE CLAIMED WERE DISALLOWED ON AN ESTIMATE BASIS. 2 2.1. IT WAS HIS CONTENTION THAT EVEN IN APPEAL BEFO RE THE FIRST APPELLATE AUTHORITY THE ACTION WAS CONFIRMED HOLDING THAT THE ASSESSEE HAS NOT MAINTAINED SATISFACTORY EVIDENCES. IT WAS HIS SUBMISSION THAT NO SPECIFIC E XPENDITURE HAS BEEN CITED AS AN ILLUSTRATION OF UNSATISFACTORY EVIDENCE AS SUCH IT WAS CONTENDED THAT THE ADDITION DESERVES TO BE DELETED. 3. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT TH E AO HAS SPECIFICALLY DISCUSSED THE ISSUE WHILE MAKING THE DISALLOWANCES WHICH WAS RELIED UPON HEAVILY BY THE DEPARTMENT. THE SAME IS REPRODUCED HEREUNDER FOR R EADY REFERENCE :- THE ASSESSEE INTER-ALIA CLAIMED EXPENDITURE IN RES PECT OF DIFFERENT HEADS FOR WHICH PAYMENTS WERE MADE THROUGH VOUCHERS IN SUPPOR T OF WHICH SUFFICIENT DOCUMENTS WERE NOT PRODUCED. MOREOVER, SOME VOUCHER S WERE NOT PROPERLY VOUCHED AS TO THE SIGNATURE OF THE RECIPIENTS. CONS IDERING ALL THESE POINTS DISALLOWANCE UNDER THE FOLLOWING HEADS ARE MADE AS UNDER :- SL.NO. HEADS OF EXPENDITURE EXPENDITURE CLAIMED D ISALLOWED AMOUNT OF THEREOF @ DISALLOW ANCES 1. TOUR & ORGANIZATION RS.16,537/- 15% RS.2,481/- 2. PRINTING & STATIONERY RS.26,151/- 15% RS.3,923 /- 3. GENERAL CHARGES RS.28,768./- 20% RS.5,754/- 4.SUBSCRIPTION& DONATION RS.11,840/- 100% RS.11,840/- 5.CARRIAGE-IN-WARD RS.24,686/- 20% RS.4,937/- 6.TELEPHONE CHARGES RS.33,077/- 20% RS.35,550/- 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CAREFUL PERUSAL OF THE SAME IT IS SEEN THAT NO SPECIFIC INSTANCE IN RESPECT OF THE INSUFFICIENCY OF THE VOUCHED DOCUMENTS HAVE BEE N BROUGHT ON RECORD. THE REASONS ON THE BASIS OF WHICH THE VOUCHERS ARE CONSIDERED I MPROPER HAVE NOT BEEN BROUGHT ON RECORD. NO REFERENCE TO PAST HISTORY ALSO HAS BEEN MADE. THE INSUFFICIENCY OF DOCUMENTS HAS NOT BEEN ADDRESSED SPECIFICALLY. IN T HE AFOREMENTIONED FACTS WE ARE OF THE VIEW THAT THE ACTION OF THE AUTHORITIES CANNOT BE UPHELD THE ADDITION ACCORDINGLY IS ORDERED TO BE DELETED. IN THE RESULT THE GROUND IS ALLOWED 3 5. THE NEXT ISSUE AGITATED BY THE ASSESSEE PERTAINS TO THE LABOUR CHARGES. ADMITTEDLY THE AO RELYING UPON THE INSPECTORS REPO RT DECIDED THE ISSUE AGAINST THE ASSESSEE. THE SAID CONCERN WAS STATED TO HAVE BEEN NOT FOUND AT THE SPECIFIC ADDRESS ON THE DATE OF VISIT I.E. 16.10.2008 IN REGARD TO THE TRANSACTIONS WHICH TOOK PLACE ON 1.4.2005 TO 31.3.2006. IT IS SEEN THAT IT HAS BEEN AGITATED ON BEHALF OF THE ASSESSEE THAT THE REPORT OF THE INSPECTOR TAKEN INTO CONSIDERATIO N WAS NOT CONFRONTED TO THE ASSESSEE BY THE AO. THIS FACT HAS NOT BEEN DISPUTED BY THE D EPARTMENT. IN THE AFORE MENTIONED FACTS AND CIRCUMSTANCES WE CONSIDER IT APPROPRIATE TO RESTORE THE ISSUE BACK TO THE FILE OF THE AO WITH THE DIRECTION TO CONFRONT THE INSPEC TORS REPORT TO THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW CONSIDERING THE REPLY OF THE ASSESSEE. THE ASSESSEE SHALL BE AT LIBERTY TO LEAD NECESSARY EVIDENCES, IF ANY, IN SUPPORT OF ITS CLAIM. ACCORDINGLY THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 09.07.2010 SD/- SD/- (C.D.RAO) (DIVA SINGH) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED : 09.07.2010. COPY OF THE ORDER IS FORWARDED TO :- 1) M/S. SANGUINE ENGINEERING WORKS, 172/13, M.S.PAL CH OWDHURY LANE, HOWRAH-101. 2) I.T.O., WARD-48(3), KOLKATA 3) CIT (A)-XXX, KOLKATA (4) CIT - KOLKA TA. 5) D. R., I.T.A.T., KOLKATA. (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, (RG) I.T.A.T., KOLKATA.