Ashok Kumar, Kaithal V. JCIT, Kurukshetra

ITA 716/CHANDI/2011

• Counselvise Citation: 71621514 RSA 2011
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 29-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH (SMC)CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL M EMBER ITA NO. 716/CHD/2011 ASSESSMENT YEAR : 2007-08 ASHOK KUMAR V. J.C.I.T. KURUKSHETRA PROP DEEP TIMBER IND KAITHAL PAN: ADEPK 5266 D (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI N.K. SAINI DATE OF HEARING : 10.08.2011 DATE OF PRONOUNCEMENT: ORDER THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), KARNAL DATED 2.5.2011 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF AP PEAL:- 1 THAT ITO/CIT(A) ERRED IN LAW AND FACT IN MAKING/ CONFIRMING ADDITION OF RS. 50,000/- ON ACCOUNT OF SALALRY PAID, WITHOUT APPRECIATONG FACTS, STATED IN REPLY F ILED BY ASSESSEE FIRM BEFORE AO/LD. CIT(A). 2 THAT AO (AS CONFIRMED IN APPEAL) ERRED IN LAW AN D FACT IN MAKING ADDITION OF RS. 30,000/- BY DISALLOW ING LOADING EXPENSES, INSPITE OF COPIES OF VOUCHERS FIL ED BEFORE AO AND ALSO WITHOUT APPRECIATING REPLY FILED BY ASSESSEE FIRM BEFORE AO/CIT(A). 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS DEALING IN PURCHASE AND SALE OF IMPORTED TIMBER ON WHOLESALE B ASIS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD CLAIMED EXPENDITURE ON SALARY TOTALING RS.8,25,600/-. THE AO NOTED THE AS SESSEE TO HAVE MAINTAINED INTERNAL VOUCHERS SIGNED BY THE EMPLOYEE S, WHICH WERE FILED BEFORE THE AO BUT NO SALARY REGISTER WAS MAINTAINED BY THE ASSESSEE. IN THE ABSENCE OF SALARY REGISTER AND SALARY BEING PAI D IN CASH, A SUM OF RS.50,000/- WAS DISALLOWED. FURTHER, THE ASSESSEE HAD CLAIMED LOADING EXPENSES OF RS.5,37,255/-. THE SAID EXPENDITURE WA S CLAIMED IN CASH AND INTERNAL VOUCHERS WERE FILED BEFORE AO. THE SAM E BEING NOT FULLY VERIFIABLE, A SUM OF RS.60,000/- WAS DISALLOWED BY THE AO. THE CIT(A) UPHELD THE DISALLOWANCE OF RS.50,000/- OUT OF SALAR Y EXPENDITURE AND RESTRICTED THE DISALLOWANCE OUT OF LOADING EXPENSES AT RS.30,000/- ONLY. 4. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEHA LF OF THE ASSESSEE AND BECAUSE OF SMALLNESS OF ISSUE INVOLVED, THE APP EAL IS DECIDED AFTER HEARING LD. DR FOR REVENUE. 5. ON THE PERUSAL OF THE RECORD AND ASSESSMENT ORDE RS PASSED BY THE AUTHORITIES BELOW, IT TRANSPIRES THAT THE ASSESSEE HAD INCURRED TOTAL EXPENDITURE OF RS.8,25,600/- UNDER THE HEAD SALARY . THE AO ADMITS THE ASSESSEE TO HAVE FILED INTERNAL VOUCHERS WHICH WERE SIGNED BY THE EMPLOYEES. HOWEVER, NO SALARY REGISTER WAS BEING M AINTAINED BY THE ASSESSEE. FURTHER, SALARY WAS PAID IN CASH TO THE EMPLOYEES. IN THE ABOVESAID FACTS AND CIRCUMSTANCES OF THE CASE WHERE THE EXPENDITURE INCURRED BY THE ASSESSEE IS BACKED BY VOUCHERS SIGN ED BY THE EMPLOYEES AND MERELY BECAUSE THE PAYMENT IS MADE IN CASH, DOE S NOT JUSTIFY DISALLOWANCE OF ANY PART OF THE EXPENDITURE. FURTH ER, THE MAINTENANCE OF SALARY REGISTER IS NOT MANDATORY IN CASE THE ASS ESSEE IS FOLLOWING A SYSTEM OF ACCOUNTING UNDER WHICH PROPER VOUCHERS AR E BEING MAINTAINED 3 BY IT. IN THE ENTIRETY OF THE FACTS AND CIRCUMSTAN CES OF THE CASE, I FIND NO MERIT IN THE DISALLOWANCE OF RS.50,000/- OUT OF SALARY EXPENSES AND THE SAME IS DIRECTED TO BE ALLOWED IN ENTIRETY. GRO UND NO.1 RAISED BY THE ASSESSEE IS ALLOWED. 6. THE ISSUE IN GROUND NO.2 RAISED BY THE ASSESSEE IS AGAINST DISALLOWANCE OF RS.30,000/- OUT OF LOADING EXPENSES . THE CLAIM OF THE ASSESSEE IS THAT THE TOTAL EXPENDITURE OF RS.5,31,2 55/- UNDER THE HEAD LOADING EXPENSES IS FULLY VOUCHED. THE AO HAD DI SALLOWED A SUM OF RS.60,000/-, WHICH WAS REDUCED TO RS.30,000/- BY CI T(A). IN THE INTEREST OF JUSTICE, I RESTRICT THE DISALLOWANCE T O RS.20,000/-. GROUND NO.2 RAISED BY THE ASSESSEE IS, THUS, PARTLY ALLOWE D. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF AUGUST, 2011. SD/- (SUSHMA CHOWLA) JUDICIAL MEMBER DATED : 26 TH AUG.,2011 POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH