Shri Rameshwar Mulji Jogi, Ahmedabad V. Asstt. Commissioner of Income Tax(OSD) Circle-9, Ahmedabad

ITA 763/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8011 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 06-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: KRITESH PATEL
• Keywords: Business income
• Section: 142(1)

Judgement Text

, CH CHCH CH IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI, MANISH BORAD, ACCOUNTANT MEMBER ./ I.T.A. NO.763/AHD/2015 ( / ASSESSMENT YEAR : 2011-12) SHRI RAMESHWAR MULJI JOGI, PROP. M/S. RAMESHWAR TRANSPORT COMPANY, 7, MINAXI PARK SOCIETY, CTM ROAD, AMRAIWADI, AHMEDABAD 380 026 / VS. ACIT(OSD), CIRCLE 9, PRATYAKSH KAR BHAVAN, AMBAWADI, AHMEDABAD 380 015 ./ ./ PAN/GIR NO. : AATPJ 9116 H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SMT. KRITESH PATEL, A.R. / RESPONDENT BY : SHRI MUDIT NAGPAL, SR. D.R. / DATE OF HEARING 22/12/2017 !'# / DATE OF PRONOUNCEMENT 26/12/2017 $% / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER: THIS APPEAL BY ASSESSEE PERTAINING TO ASSESSMENT YEAR 2011-12 IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-6, AHMEDABAD DATED 04.03.2015, ARISING OU T OF ORDER U/S.143(3) OF THE INCOME TAX ACT (HEREINAFTER REFER RED TO AS, ACT), DATED 29.01.2014, FRAMED BY ACIT(OSD) CIRCLE9, AHMEDABAD . 2. THE ASSESSEE HAS RAISED EIGHT GROUNDS OF APPEAL BUT THE SOLE GRIEVANCE INVOLVED THEREIN AGAINST THE ORDER OF LD. CIT(A) IS FOR ITA NO.763/AHD/ 2015 SHRI RAMESHWAR MULJI JOGI VS. ACIT ASST.YEAR 2011-12 - 2 - SUSTAINING THE DISALLOWANCE OF 15% OF VEHICLE REPAI RING EXPENSES INCURRED BY THE ASSESSEE. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE TRANSPORTA TION BUSINESS. E- RETURN OF INCOME DECLARING TOTAL INCOME OF RS.20,74,690/- WAS FILED ON 29.09.2011. THE CASE SELECTED FOR SCRUTINY AND A NO TICE U/S. 143(2), 142(1) OF THE ACT WAS DULY SERVED UPON THE ASSESSEE . LD. AO COMPLETED ASSESSMENT AFTER MAKING DISALLOWANCE OF RS.70,000/- U/S.40A(3) OF THE ACT AND ALSO DISALLOWANCE OF 25% OF THE VEHICLE REP AIRING EXPENSES OF RS.78,69,771/- FOR LACK OF NECESSARY DOCUMENTS AND INABILITY OF THE ASSESSEE TO PROVE THE EXPENDITURE AND THEREBY MAKIN G DISALLOWANCE OF RS.19,67,443/-. ACCORDINGLY, AFTER MAKING ADDITIONS /DISALLOWANCES OF RS.20,37,443/- INCOME ASSESSED AT RS.41,12,133/-. 4. AGGRIEVED ASSESSEE BEFORE APPEAL BEFORE LD. CIT( A) AGAINST THE DISALLOWANCE OF RS.19,67,443/- BUT PARTLY SUCCEEDED AS LD. CIT(A) SUSTAINED DISALLOWANCE @ 15% AS AGAINST 25% MADE B Y THE ASSESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF LD. CIT(A) BEFORE THE TRIBUNAL FOR THE ALLEGED SUSTAINING OF D ISALLOWANCE @ 15% OF VEHICLE REPAIRING EXPENSES. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE BOOKS OF ACCOUNTS ARE AUDITED U/S.44AB OF THE ACT, PERCENTAGE OF VEHI CLE REPAIRING EXPENSES IN TERMS OF TOTAL SALES HAS DECLINED TO 4.25% AS AG AINST 6.78% IN THE IMMEDIATELY PROCEEDING FINANCIAL YEAR. HE FURTHER C ONTENDED THAT LD. AO ITA NO.763/AHD/ 2015 SHRI RAMESHWAR MULJI JOGI VS. ACIT ASST.YEAR 2011-12 - 3 - HAS MERELY MADE AN AD HOC DISALLOWANCE WITHOUT POIN TING OUT ANY SPECIFIC ERROR. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LOWER AUT HORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. SOLE ISSUE INVOLVED IN THIS APPEA L RELATES TO SUSTAINING OF DISALLOWANCE @15% OF VEHICLE REPAIRING EXPENSES BY LD. CIT(A). WE OBSERVE THAT THE TOTAL VEHICLE EXPENSES INCURRED AT 78.69 LACS IS 4.25% OF THE TOTAL TURNOVER OF RS.1853 LACS. IN THE PRECEDIN G TWO YEARS THE PERCENTAGE OF VEHICLE REPAIRING EXPENSES WAS 7.91% AND 6.78% OF THE TOTAL SALES FOR FINANCIAL YEAR 2008-09 AND FINANCIA L YEAR 2009-10 RESPECTIVELY. IT IS TRUE THAT TOTAL PERCENTAGE OF T HE EXPENDITURE HAS REDUCED. IT IS ALSO NOT DISPUTED THAT BOOKS OF ACCO UNTS ARE REGULARLY AUDITED AND THEY ARE NOT BEING REJECTED BY THE ASSE SSING OFFICER FOR COMPUTING INCOME OF THE ASSESSEE. 7. HOWEVER, FROM PERUSAL OF THE ASSESSMENT ORDER WE FIND THAT WHEN THE INFORMATION WAS CULLED FOR THE JUSTIFICATION OF VEHICLE REPAIRING EXPENSES, ASSESSEE MERELY SUBMITTED SELF MADE VOUCH ER AND THEREAFTER, EVEN BEEN AFTER PROVIDING SUFFICIENT OPPORTUNITY, A SSESSEE WAS UNABLE TO FURNISH THE REMAINING DETAILS AS REGARDS THE SUPPOR TING BILLS AND LOCATION AT WHICH EXPENSES WERE MADE. IT IS ALSO ACCEPTED BY THE ASSESSEE THAT THE IMPUGNED EXPENDITURE WERE NOT WELL SUPPORTED BY PRO PER BILLS AND MOST OF THE PAYMENTS WERE MADE IN CASH. ITA NO.763/AHD/ 2015 SHRI RAMESHWAR MULJI JOGI VS. ACIT ASST.YEAR 2011-12 - 4 - 8. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCE S OF THE CASE AND OVERALL LOOKING TO THE TYPE OF EXPENDITURE, NATURE OF BUSINESS CARRIED OUT BY THE ASSESSEE AND PROCEEDINGS CARRIED OUT FOR THE LOWER AUTHORITIES ARE OF THE VIEW THAT DISALLOWANCE OF 10% OF THE TOTAL V EHICLE EXPENDITURE WILL MEET THE END OF JUSTICE. WE ACCORDINGLY SUSTAINED D ISALLOWANCE OF RS.7,86,988/- AND PARTLY ALLOW THE APPEAL OF THE AS SESSEE. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 26/12/2017 SD/- SD/- ( MAHAVIR PRASAD ) ( MANISH BORAD ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 26/12/2017 PRITI YADAV, SR. PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-3, RAJKOT 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD