Perfect Retreads Pvt. Ltd., RAJKOT-GUJARAT V. The Asstt. Commr. of Income Tax, Circle-1, RAJKOT-GUJARAT

ITA 703/RJT/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0063 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-11-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 05-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: USHA N SHORTE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI R. P. TOLANI, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] PERFECT RE TREAD S PVT. LTD, RAJKOT PAN: AABCP2763P (APPELLANT) VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1 RAJKOT (RESPONDENT ) REVENUE BY : SMT. USHA N. SHORTE , SR. D . R. ASSESSEE BY: S H RI DEVINA PATEL , A.R. DATE OF HEARING : 11 - 1 1 - 2 016 DATE OF PRONOUNCEMENT : 07 - 12 - 2 016 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2006 - 07 , AR ISES FROM ORDER OF THE CIT(A) - I, RAJKOT DATED 09 - 09 - 2014 IN APPEAL NO. CIT(A) - I / RJT/0153/11 - 12 , IN PROCEEDINGS UNDER SECTION 115WE (3) R.W.S. 115WG OF THE I NCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 703 / RJT /20 14 A SSESSMENT YEAR 200 6 - 07 I.T.A NO. 7 03 /RJT /20 14 A.Y. 2006 - 07 P AGE NO PERFECT RETREADS PVT. LTD VS. ACIT 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL: - THAT THE LEARNED CIT(A), RAJKOT HAS GRIEVOUSLY ERRED IN CONTENDING THAT AN AMOUNT OF RS.13,77,508/ - BEING 20% OF THE DIFFERENCE BETWEEN THE AMOUNTS OF SALES PROMOTION EXPENSES AND STAFF WELFARE EXPENSES AS REFLECTED IN PROFIT AND LOSS A/C. AND THAT REFLECTED IN THE FBI RETURN IS LIABLE TO BE TAXED AS FRINGE BENEFITS . 3 . THE RETURN OF INCOME DECLARING INCOME OF RS. 13,52,196/ - WAS FILED ON 15 TH JAN, 2007. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED THAT ASSESS EE HAS SHOWN FRINGE BENEFITS UNDER THE HEAD SALE PROMOTION AND EMPLOYEE S WELFARE. A BREAK - UP OF THESE EXPENDITURES ARE GIVEN AS UNDER: - HEAD AMOUNT CHARGED IN AM OUNT TAKEN IN FBT RETURN DIFFERENCE P & L A/C SALES PROMOTION 68 , 50832 1663566 5187266 EMPLOYEES 3275476 1575200 1700276 WELFARE -------------- 6887542 3 .1 ON EXAMINING OF THESE EXPENSES, TH E ASSESSING O FFICER STATED THAT ASSESSEE HAS SHOWN LESS TAXABLE FRINGE BENEFITS BY THE AMOUNT OF RS. 13,77,508/ - (20% OF RS 68 , 87 , 542/ - ). IN THIS CONNECTION, ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE SUPPORTING VOUCHER S OF THE ABOVE EXPENDITURE S AND SHOW CAUSED WHY THIS EXPENDITURE SHOULD NOT BE ADDED TO THE TOTAL OF THE FRINGE BENEFITS. THE ASSESSING OFFICER HAS ADDED AN AMOUNT OF RS. 13,77,508/ - TO THE TOTAL OF FRINGE BENEFITS BY STATING THAT ASSESSEE HAS ONLY FURNISHED I.T.A NO. 7 03 /RJT /20 14 A.Y. 2006 - 07 P AGE NO PERFECT RETREADS PVT. LTD VS. ACIT 3 COPY OF LEDGER AND NO SUPPORTING VOUCHER S WERE PRODUCED FOR VERIFICATION. 4 . AGGRIEVED AGAINST THE ORDER OF THE ASSESSING O FFICER, THE ASSESSE E HAS FILED APPEAL BEFORE THE LD . COMMISSIONER OF INCOME TAX(A). IN THIS CONNECTION, THE LD. COMMISSIONER OF INCOME TAX(A) STATED THAT THE ASSESSEE FAILED TO MAKE COMPLIANCE BY NOT SUBMITTING THE SUPPORTING DETAILS AND AUTHORISED REPRESENTATIVE OF THE ASSESSEE SHRI DEVINA PATEL , C.A. ATTENDED AND EXPRESSED HIS INABILITY TO SUBMIT ANY DETAIL S STATING THAT THE SAME WERE NOT RECEIVED FROM THE ASSESSEE. CONSEQUENTLY, THE LD.CIT(A) HAD DISMISSED THE APPEAL OF THE ASSESSEE. 5. DURING THE A PPELLATE PROCEEDINGS BEFORE US, THE LEARNED COUNSEL CONTENDED THAT THE LD. COMMISSIONER OF INCOME TAX(A) HAS PASSED EX - PARTE ORDER SINCE THE ASSESSE E WAS UNABLE TO FILE NECESSARY SUBMISSION CALLED FOR. HE FURTHER STATED THAT THE ENTIRE DOCUMENTS PERTAINING TO THE CASE WAS MISPLACED IN THE OFFICE OF THE ASSESSEE AS A RESULT THE SAME COULD NOT BE PRODUCED BEFOR E THE FIRST APPELLATE AUTHORITY. HE STATED THAT NOW THE RELEVANT DOCUMENTS HAVE BEEN TRACED AND REQUESTED FOR PROVIDING ONE MORE OPPORTUNITY TO EXPLAIN THE EXPENSES . 5.1 ON THE OTHER HAND, LD. D.R. RELIED ON THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(A). I.T.A NO. 7 03 /RJT /20 14 A.Y. 2006 - 07 P AGE NO PERFECT RETREADS PVT. LTD VS. ACIT 4 6 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECOR D. WE FIND THAT THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE LD . COMMISSIONER OF INCOME TAX(A) ON ACCOUNT OF NOT FURNISHING OF SUPPORTING DETAILS AND INFORMATION DURING THE COURSE OF APPELLATE PROCEEDINGS. NOW IN THE COURSE OF APPELLATE PROCEEDINGS, TH E LEARNED COUNSEL STATED THAT THE REQUIRED INFORMATION IS READY WITH THEM WHICH COULD NOT BE SUBMITTED AT THE TIME OF APPELLATE PROCEEDINGS BEFORE LD. COMMISSIONER OF INCOME TAX( A). IN VIEW OF THE ABOVE MENTIONED FACTS AND CIRCUMSTANCES, W E CONSIDERED THA T IT WILL BE APPROPRIATE TO SET ASIDE THIS CASE TO THE FILE OF LD. CIT(A) TO ADJUDICATE AFRESH ON MERITS AFTER PROVIDING NECESSARY OPPORTUNITY TO THE ASSSESSEE. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 07 - 12 - 201 6 SD/ - SD/ - (R. P. TOLANI ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 07 /12 /2016 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T.A NO. 7 03 /RJT /20 14 A.Y. 2006 - 07 P AGE NO PERFECT RETREADS PVT. LTD VS. ACIT 5 BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT