M/s. Aminia Restaurant, Kolkata V. ITO, Ward - 33(3), Kolkata, Kolkata

ITA 746/KOL/2010

• Counselvise Citation: 74623514 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 16-04-2010
• Court: TRIBUNAL
• Department Lawyers: R K SAHA
• Assessee Lawyers: S P CHOUDHURY; S CHOUDHURY

Judgement Text

1 , C , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C, KOL KATA [ . . . . . .. . , !'# !'# !'# !'# , ] BEFORE SRI S.V.MEHROTRA, ACCOUNTANT MEMBER & SRI N.VIJAYAKUMAR AN, JUDICIAL MEMBER $ $ $ $ / ITA NO. 746 (KOL) OF 2010 % & '( / ASSESSMENT YEAR 2002-03 AMINIA RESTAURANT, KOLKATA. (PAN-AAKFA3498G) INCOME-TAX OFFICER, WARD-33(3), KOLKATA. (+, / APPELLANT ) - - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 / FOR THE APPELLANT: / S/SRI S.P.CHOUDHURY & S.CHOUDHURY /0+, 1 2 / FOR THE RESPONDENT: / SRI R.K. SAHA. # 3 1 4 / DATE OF HEARING : 17/10/2011 5' 1 4 / DATE OF PRONOUNCEMENT : 21/10/2011 6 / ORDER ( !'# !'# !'# !'# ), (N. VIJAYAKUMARAN), JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS FOR THE ASSESSMENT Y EAR 2002-03. IT IS DIRECTED AGAINST THE ORDER OF THE LD. C.I.T.(A)-XX, KOLKATA, DATED 14/01/2010. 2. THE FACTS RELEVANT ARE THAT THE ASSESSEE IS RUN NING A HOTEL. INITIALLY THE RETURN WAS PROCESSED U/S. 143(1). THEREAFTER THE CASE WAS REOPENED U/S. 147 FOLLOWED BY 148 NOTICE. BEFORE US, THE LEARNED COUNSEL DID NOT PRE SS THE GROUNDS RELATING TO REOPENING. HENCE THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 3. COMING TO THE MERITS, THE FIRST DISALLOWANCE WA S OF RS.10,455/- BEING THE 10% OF THE DISALLOWANCE OF THE EXPENDITURE CLAIMED AS ADVE RTISEMENT UNDER THE HEAD MISCELLANEOUS EXPENDITURE. IN THE ASSESSMENT PR OCEEDINGS, THE ASSESSEE COULD NOT FURNISH THE DETAILS. THE LD. A.O. AFTER VERIFICATI ON OF THE BOOKS OF ACCOUNT FILED BEFORE HIM ALONG WITH THE DETAILS WAS OF THE VIEW T HAT 10% OF THE EXPENDITURE HAS TO BE DISALLOWED, WHICH COMES TO THE ADDITION OF RS.10 ,455/-. WE HAVE CONSIDERED THE 2 RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABL E ON RECORD. THE ASSESSEE HAS SHOWN THE TOTAL INCOME IN THE RETURN OF RS.4,37,980/-. A FTER REASSESSMENT, THE INCOME SUBJECT TO TAX WAS ASSESSED AT RS.5,44,910/-. CONS IDERING THE BONA FIDE OF THE ASSESSEES RETURN AND THE NATURE OF THE BUSINESS TH E ASSESSEE IS RUNNING, WE ARE OF THE VIEW THAT THIS ADVERTISEMENT EXPENDITURE SHOWN UNDE R THE HEAD MISCELLANEOUS EXPENDITURE IS TO BE 5% OF THE SAID EXPENDITURE IN STEAD OF 10% ARRIVED AT BY THE LOWER AUTHORITIES. TO THIS EXTENT, THE ADDITION ON ACCOUN T OF ADVERTISEMENT EXPENDITURE IS RESTRICTED AS ABOVE. THE ASSESSEE, THEREFORE, GETS PARTIAL RELIEF UNDER THIS HEAD. 4. COMING TO THE BAZAAR PURCHASE AND STORES CONSUM ED, CLEANING & WASHING AND PRINTING & STATIONERY INCLUDING HOTEL MAINTENANCE A ND MACHINERY MAINTENANCE AND GENERATOR RUNNING CHARGES, AFTER CONSIDERING THE RI VAL SUBMISSIONS WE ARE OF THE VIEW THAT THESE ARE TO BE EXPENDED FOR RUNNING THE HOTEL IN A GOOD CONDITION WHICH REQUIRES MAINTENANCE, REPAIRS INCLUDING MACHINERY MAINTENANC E AND GENERATOR RUNNING CHARGES. IN THE SAME WAY, THE STORES CONSUMED, CLEANING & WA SHING, PRINTING & STATIONERY ARE INTER-LINKED WITH THE HOTEL BUSINESS WHICH IS REQUI RED AND WITHOUT THESE THE HOTEL BUSINESS CANNOT BE RUN SMOOTHLY IN THIS COMPETITIVE BUSINESS OF RUNNING THE HOTEL. FURTHER, IN THE SAME WAY BAZAR PURCHASE MAY NOT HAV E BEEN VOUCHED WITH FULL DETAILS AND THERE MAY NOT BE ANY EVIDENCE FOR EXPENDITURE A ND THE ASSESSEE IS NOT EXPECTED TO PRODUCE THE EVIDENCE IN WRITING AS MOST OF THE BAZA R PURCHASE WAS IN THE OPEN MARKET AND BY WAY OF ORAL TRADING. HENCE, FOR THIS THE AS SESSEE NEED NOT BE PUT TO SUFFERANCE AS PRACTICALLY IT IS NOT POSSIBLE ALSO. THEREFORE, THE ADDITION IN RESPECT OF BAZAR PURCHASE WHICH THE A.O. HAS MADE AT 10% AND IN THE SAME WAY ADDITION OF 10% OF THE EXPENDITURE ON STORES CONSUMED, CLEANING & WASHING AND PRINTING & STATIONERY ADDED TO THE INCOME OF THE ASSESSEE UNDER THE HEAD MISCELLA NEOUS EXPENDITURE AND 10% OF THE EXPENDITURE WHICH WAS ADDED UNDER THE HEAD HOTEL M AINTENANCE, MACHINERY MAINTENANCE AND GENERATOR RUNNING CHARGES ARE NOT AT ALL JUSTIFIED AS THE SAME IS DEFINITELY ON THE HIGHER SIDE. AT THE SAME TIME, T HE ASSESSEES CONTENTION THAT THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN SUSTAINING T HE ADDITIONS AS THE EXPENSES ARE LEGITIMATE EXPENSES IN RUNNING THE HOTEL BUSINESS I S ALSO NOT TENABLE. CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT DISALLOW ANCE AT 3% OF THE SAID EXPENDITURE 3 UNDER THE ABOVE THREE HEADS, VIZ., BAZAR PURCHASE , STORES CONSUMED, CLEANING & WASHING AND PRINTING & STATIONERY AND HOTEL MAINT ENANCE, MACHINERY MAINTENANCE AND GENERATOR RUNNING CHARGES AND CONSEQUENTIAL ADDITI ONS THEREOF TO THE INCOME OF THE ASSESSEE WILL MET THE ENDS OF JUSTICE. ACCORDINGLY WE MODIFY THE ORDERS OF THE AUTHORITIES BELOW TO THAT EXTENT AND THE ASSESSEES APPEAL IS PARTLY ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. SD/- SD/- ( . . . . . .. . ) ( !'# !'# !'# !'# ) (S.V.MEHROTRA), ACCOUNTANT MEMBER (N.VIJAYAKUMARAN) JUDICIAL MEMBER ( (( (4 4 4 4) )) ) DATE: 21-10-2011 6 1 /%%! 7!'8- COPY OF THE ORDER FORWARDED TO: 1. +, / THE APPELLANT : AMINIA RESTAURANT, 1, CORPORATION PLACE, KOL-700 087 2 /0+, / THE RESPONDENT : I.T.O., WARD-33(3), KOLKATA. 3. %6 () : THE CIT(A)-XX, KOLKATA. 4. %6 / THE C.I.T., KOL - 5 <%= /% / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 GUARD FILE . 0! /%/ TRUE COPY, 6 #/ BY ORDER, (DKP) ASSTT. REGISTRAR .