M/s. S.R. PROTIENS PVT. LTD, Jaipur V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4, Jaipur

ITA 761/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1921 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 10-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK
• Keywords: Business income
• Section: 143(3)

Judgement Text

ITA NO.761/JP/2017 M/S. S.R. PROTEINS PVT. LTD VS ACIT ,CIRCLE 4, JAIPUR 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 761/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 M/S. S.R. PROTEINS PVT. LTD D-97, SHANTI SADAN AMBABARI, JAIPUR CUKE VS. THE ACIT CIRCLE - 4 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAICS 0896 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI SHRAWAN KUMAR GUPTA, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY :SMT. POONAM RAI, DCIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10/11/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 13 /11/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 20-08-2017 FOR THE ASSESSMENT YEAR 201 3-13 RAISING THEREIN FOLLOWING GROUNDS:- 1. THAT THE IMPUGNED ASSESSMENT ORDER U/S 143(3) DATED 31- 12-2015 IS BAD IN LAW AND ON FACTS OF THE CASE FOR WANT OF JURISDICTION AND FOR VARIOUS OTHER REASONS AND HENCE THE SAME MA Y KINDLY BE QUASHED. 2. THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN PARTLY SUSTAINING THE DISALLOW ANCE OF EXPENSE OF 2,00,000/- OUT OF RS. 4,00,000/- DISALLOWED BY THE AO ON ACCOUNT OF ITA NO.761/JP/2017 M/S. S.R. PROTEINS PVT. LTD VS ACIT ,CIRCLE 4, JAIPUR 2 VARIOUS EXPENSES WITHOUT INVOKING THE PROVISIONS OF SEC 145(3) WHICH WAS BASED MERELY ON ASSUMPTION, PRESUMPTION AND SUS PICION. THE DISALLOWANCE SO MADE BY THE AO AND PARTLY CONFIRMED BY THE LD. CIT(A) IS BEING ABSOLUTELY, CONTRARY TO THE PROVISI ONS OF LAW AND FACTS OF THE CASE AND NOT IN CONFORMITY WITH THE LAW, HEN CE THE SAME MAY KINDLY BE DELETED IN FULL. 3. THE AO ERRED IN LAW AS WELL AS ON THE FACTS OF T HE CASE IN CHARGING OF INTEREST U/S D234B, 234C & 234D AS CONS EQUENTIAL IN NATURE. THE APPELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING OF ANY SUCH INTEREST. HENCE, THE INTEREST SO CHARGED BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, MAY KINDLY BE DELETED IN FULL. 2. APROPOS GROUND NO. 1 AND 2 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 2.3 I HAVE PERUSED THE FACTS OF THE CASE, ASSESSM ENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANU FACTURING OF MUSTARD OIL AND CAKE. ON VERIFICATION OF THE BOOKS OF ACCOUNT THE AO NOTED THAT THE PAYMENTS AGAINST THE BOILER RUNNING EXPENSES, MUSTARD CAKE EXPENSES, MUSTARD OIL EXPENSES AND MUSTARD SEE D CRUSHING EXPENSES WERE COMPLETELY MADE IN CASH, OF AMOUNTS L ESS THAN RS. 19,000/- IN EACH TRANSACTION. THEY WERE SUPPORTED O NLY BY SELF MADE VOUCHERS AND THE BILLS AND VOUCHERS FOR LOADING AND UNLOADING CHARGES WERE ALSO NOT PRODUCED. THE AO MADE A LUMP SUM DISA LLOWANCE OF RS. 4 LAKHS. IN THE PRESENT PROCEEDINGS, THE AUTHOR IZED REPRESENTATIVE STATED THAT WHILE THE SALE DURING THE YEAR HAVE INC REASED BY ALMOST RS. 14 LAKHS, THE EXPENDITURE HAS INCREASED MARGINALLY BY RS. 3 LAKHS. IT WAS THUS SUBMITTED THAT THE ADDITION MADE NOT JUSTI FIED. IT IS SEEN THAT EVEN DURING THE APPEAL PROCEEDINGS THE AUTHORIZED R EPRESENTATIVE HAS NOT COUNTERED THE DEFECTS POINTED OUT BY THE AO IN THE EXPENDITURE MADE. IN VIEW OF THE SAME, THE DISALLOWANCE IS REST RICTED TO RS. 2 LACS CONSIDERING THAT THERE HAS BEEN AN INCREASE IN THE TURNOVER. THE GROUND OF APPEAL IS PARTLY ALLOWED. ITA NO.761/JP/2017 M/S. S.R. PROTEINS PVT. LTD VS ACIT ,CIRCLE 4, JAIPUR 3 2.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED FOR DELETION OF ADDITION CONFIRMED BY THE LD. CIT(A). 2.3 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ER OF THE LD. CIT(A). 2.4 THE BENCH HAS THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED THAT THE AO MADE THE LUMPSUM DI SALLOWANCE OF RS. 4.00 LACS AS THE EXPENSES WERE NOT VERIFIABLE FOR WANT OF PROPER BILLS AND VOUCHERS. IN FIRST APPEAL , THE LD. CIT(A) HAS REDUCED THE SAME TO TH E EXTENT OF RS. 2.00 LACS. DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE FI LED THE FOLLOWING STATEMENT SHOWING COMPARATIVE EXPENSE. NATURE OF EXPENSES A.Y. 2013-14 A.Y. 2012-14 BOILER RUNNING EXPENSES (EXCLUDING COAL & FUEL EXPENES) 11,62,680 10,49,497 MUSTARD CAKE EXPENSES 11,67,459 10,62,573 MUSTARD OIL EXPENSES 11,70,530 10,57,045 MUSTARD SEED EXPENSES 11,62,680 11,75,240 TOTAL 46,63,349 43,44,355 MARGINAL INCREASE 3,18,994 AMOUNT OF TOTAL SALES 84,97,18,792 70,12,90,610 THUS INCREASE IN THE AMOUNT OF SALES BY RS. 14,84,28,1822 TAKING INTO CONSIDERATION THE FACTS, CIRCUMSTANCES OF THE CASE AND THE ORDERS OF THE LOWER AUTHORITIES, IT WILL BE IN THE INTEREST OF EQ UITY AND JUSTICE TO SUSTAIN THE ADDITION TO THE EXTENT OF RS. 1.00 LACS AS AGAINST RS. 2.00 LACS CONFIRMED BY THE LD. CIT(A). THUS GROUND NO. 1 AND 2 OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.761/JP/2017 M/S. S.R. PROTEINS PVT. LTD VS ACIT ,CIRCLE 4, JAIPUR 4 3.1 THE GROUND NO. 2 OF THE ASSESSEE IS REGARDING C HARGING OF INTEREST U/S 234B, 234C AND 234D OF THE ACT WHICH ARE MANDATORY AND CO NSEQUENTIAL IN NATURE. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 /11/2 017 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13 /11/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. S.R. PROTEINS PVT LTD. JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE 3, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 761/JP/2017 ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR