ACIT(OSD), Cochin V. Kitex Garments, Ernakulam

ITA 75/COCH/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86400 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 09-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JOHN
• Assessee Lawyers: R KRISHNA IYER

Judgement Text

1 ITA NO.75/COCH/2012 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 75/COCH/2012 (ASSESSMENT YEAR 2008-09) ACIT, CIR.1(2) VS KITEX GARMENTS LTD KOCHI KITEX HOUSE, ERNAKULAM PAN : AABCK0714F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.K. JOHN RESPONDENT BY : SHRI R KRISHNA IYER DATE OF HEARING : 01-12-2014 DATE OF PRONOUNCEMENT : 09-01-2015 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE WAS DISPOSED OF EARLIER BY AN ORDER DATED 31-12-2013. HOWEVER, THE ASSESSEE FILED MISC ELLANEOUS APPLICATION IN M.A. NO.32/COCH/2014 ON THE GROUND THAT GROUND N O.3 RAISED BY THE REVENUE WITH REGARD TO DISALLOWANCE OF EXPENSES ON PURCHASE OF WATER WAS NOT DISPOSED OF. ACCORDINGLY, THE APPEAL OF TH E REVENUE WAS REOPENED ONLY FOR THE PURPOSE OF DISPOSING OF GROUN D NO.3 I.E. THE ISSUE RELATING TO EXPENSES FOR PURCHASE OF WATER AND POST ED FOR HEARING ONLY FOR DISPOSAL OF GROUND NO.3. 2 ITA NO.75/COCH/2012 2. SHRI K.K. JOHN, THE LD.DR SUBMITTED THAT THE ASS ESSEE CLAIMED RS.28,97,041 AS EXPENDITURE. THE AUDITORS IN THE A UDIT REPORT CERTIFIED THAT THE ASSESSEE HAS NOT DEDUCTED TAX. ACCORDINGLY, TH E ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.28,97,041. HOWEVER, ON APPEAL, THE ASSESSEE EXPLAINED BEFORE T HE CIT(A) THAT THE EXPENDITURE TO THE EXTENT OF RS.23,85,100 REPRESENT S PAYMENT MADE FOR SUPPLY OF WATER. AFTER CONSIDERING THE CONTENTION OF THE ASSESSEE, THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE TO THE EXT ENT OF RS. 23,85,100; HOWEVER, CONFIRMED THE ADDITION TO THE EXTENT OF RS .5,11,941. ACCORDING TO THE LD.DR, THE (CIT(A) OUGHT NOT HAVE ALLOWED THE C LAIM OF THE ASSESSEE. 3. ON THE CONTRARY, SHRI R KRISHNA IYER, THE LD.REP RESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE PURCHASED WATE R FOR RUNNING THE CANTEEN. OUT OF THE TOTAL SUM OF RS.28,97,041 A SU M OF RS.23,85,100 RELATES TO EXPENDITURE FOR PURCHASE OF WATER. THE PAYMENTS WERE MADE TO M/S AMA TRANSPORT, PATTIMATTOM. PAYMENTS WERE ALSO MADE TO SHRI A. RASHEED AND SHRI BADHAR. ACCORDING TO THE LD.REPRE SENTATIVE, THE ASSESSEE HAS FILED SPECIMEN BILLS BEFORE THE CIT(A) , WHO EXAMINED THE SAME THOROUGHLY, WHICH CONTAINED THE DETAILS OF PAY MENT OF WATER CHARGES, LORRY NO.ETC. THE COPY OF THE TRIP SHEET OF THE LO RRY WAS ALSO FURNISHED BEFORE THE CIT(A). THE CIT(A), AFTER EXAMINING THE SAME HAS ALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS. 23,85,10 0. 3 ITA NO.75/COCH/2012 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE AUDIT REPORT SAID TO BE FILED BY THE ASSESSEE. THE ASSESSING OFFICER HAS NOT EXAMIN ED THE NATURE OF THE PAYMENT. HOWEVER, THE CIT(A) EXAMINED THE NATURE O F THE PAYMENT MADE BY THE ASSESSEE AND FOUND THAT WHAT WAS PAID BY THE ASSESSEE IS ONLY PAYMENT TOWARDS WATER SUPPLY. THE CIT(A) HAS ALSO EXAMINED SPECIMEN COPIES OF THE BILLS FILED BY THE ASSESSEE WHICH CON TAINED THE DETAILS OF PAYMENT FOR WATER CHARGES WITH REFERENCE TO LORRY N O., ETC. FURTHER, THE CIT(A) HAS ALSO EXAMINED THE COPIES OF THE TRIP SHE ETS FILED BY THE ASSESSEE. THEREFORE, IT IS OBVIOUS THAT WHAT WAS P AID BY THE ASSESSEE TO THE EXTENT OF RS.23,85,100 IS ONLY FOR PAYMENT TOWA RDS PURCHASE OF WATER FOR RUNNING THE CANTEEN. ALL PAYMENTS RELATING TO WATER CHARGES DOES NOT REQUIRE ANY DEDUCTION OF TAX AT SOURCE, THEREFORE, THERE IS NO QUESTION OF DISALLOWANCE OF RS.23,85,100. THEREFORE, THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY DELETED THE DIS ALLOWANCE TO THE EXTENT OF RS.23,85,100 AND CONFIRMED THE DISALLOWANCE TO THE EXTENT OF RS.5,11,941. THE GROUND OF THE REVENUE FAILS. 5. THE ORDER OF THE TRIBUNAL DATED 31-12-2013 IN RE SPECT OF OTHER ISSUES REMAINS AS SUCH. 4 ITA NO.75/COCH/2012 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 TH JANUARY, 2015. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 09 TH JANUARY, 2015 PK/- COPY TO: 1. ACIT, CIR.1(2), KOCHI 2. KITEX GARMENTS LTD, KITEX HOUSE, P.B. NO.5, KIZH AKKAMBALAM, CHOORAKODU, ERNAKULAM 683 562 3. THE COMMISSIONER OF INCOME-TAX, KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-II, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH