Sh. Rajesh Nanda, Patiala V. ACIT, Patiala

ITA 776/CHANDI/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63992 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 20-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 30-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: H R SALDI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 776/CHD/2012 ASSESSMENT YEAR : 2008-09 SHRI RAJESH NANDA, PROP. V A.C.I.T. CIRCLE, M/S ANMOL CONSTRUCTION CO. PATIALA 711, SST NAGAR PATIALA AECPN 5090 B (APPELLANT) (RESPONDENT) APPELLANT BY SHRI H.R. SALDI RESPONDENT BY SHRI AKHILESH GUPTA DATE OF HEARING 15.10.2012 DATE OF PRONOUNCEMENT 30.10.2012 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A), PATIALA DATED 11.5.2012. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING THREE GROUNDS: 1 THAT THE LD. CIT(A) HAVE ERRED IN CONFIRMING THE ESTIMATED ADDITION OF RS. 1.20,000/- ON ACCOUNT OF ALLEGED E LECTRICITY EXPENSES, ALTHOUGH THERE WAS NOTHING ON RECORD THAT THE APPELLANT HAD ANY ELECTRICITY CONNECTION AND HAD INCURRED ANY EXPENDITURE. 2. THAT THE LD. CIT(A) HAVE ALSO ERRED IN CONFIRMIN G THE ESTIMATED ADDITION OF RS. 60,000/- ON ACCOUNT OF A LLEGED TRAVELING EXPENSES AND RS. 12,000/- ON ACCOUNT OF ALLEGED TE LEPHONE EXPENSES. ALTHOUGH THERE WAS NOTHING ON RECORD THA T THE APPELLANT HAD INCURRED EXPENSES ON TRAVELING AND TELEPHONE. 3. FURTHER THE LD. CIT(A) HAVE ERRED IN CONFIRMING THE ADDITION OF RS. 1,25,000/- ON ACCOUNT OF ESTIMATED DISALLOW ANCE OUT OF EXPENSES. IN ANY CASE THIS ESTIMATED ADDITION IS LI ABLE TO BE TELESCOPED WITH OTHER ESTIMATED ADDITIONS. 3. GROUNDS NO. 1 & 2 AFTER HEARING BOTH THE PARTIES WE FIND THAT THE ADDITION OF RS. 1,92,000/- WAS MADE B Y THE AO. THE DISCUSSION IN RESPECT OF THESE ADDITIONS IS GI VEN AT PARA 2 WHICH IS AS UNDER:- 2 PERUSAL OF PROFIT AND LOSS ACCOUNT REVEALS THAT TH E ASSESSEE HAS NOT SHOWN ANY EXPENSES ON ACCOUNT OF POWER, TRAVELING AND TELEPHONE. VIDE ORDER SHEET E NTRY DATED 22.11.2010, THE ASSESSEE WAS ASKED TO SHOW CA USE AS TO WHY ADDITION ON ACCOUNT OF THESE EXPENSES SH OULD NOT BE MADE AS IT IS NOT POSSIBLE THAT NO EXPENSES HAS BEEN INCURRED UNDER THESE HEADS DURING THE COURSE O F WORK OF CIVIL CONSTRUCTION RUNNING BY THE ASSESSEE. IN RESPONSE THE ASSESSEE COULD NOT FURNISH ANY PLAUSIB LE EXPLANATION. HENCE, AN ADDITION OF RS. 1,20,000/- BY TAKING AVERAGE @ RS. 10,000/- PER MONTH ON ACCOUNT OF POWER EXPENSES, RS. 60,000/- ON ACCOUNT OF TRAVELI NG EXPENSES BY TAKING RS. 5,000/- PER MONTH AND RS. 12,000/- ON ACCOUNT OF PHONE BY TAKING RS. 1000/- PER MONTH IS MADE TO THE TAXABLE INCOME OF THE ASSESSE E. 4. BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT THE ASSESSEE HAD NOT TAKEN ANY POWER CONNECTION AND ALSO NOT INC URRED ANY EXPENSES ON TRAVELING AND TELEPHONES AND THAT IS WH Y NO CLAIM WAS INCURRED UNDER THIS HEAD. HOWEVER, IT WAS ADMI TTED THAT SOME MINOR EXPENSES WERE INCURRED WHICH WAS IN THE RANGE OF RS. 2500/- TO RS. 3000/- PA ON TELEPHONES. 5. THE LD. CIT(A) OBSERVED THAT SOURCES OF THESE EX PENSE HAVE NOT BEEN FURNISHED, THEREFORE, ADDITION WAS C ONFIRMED. 6. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMI TTED THAT THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE ON PO WER OR TRAVELING AND ADDITION HAS BEEN MADE WITHOUT BRINGI NG ANY MATERIAL ON RECORD TO SHOW THAT ANY SUCH EXPENDITUR E WAS INCURRED. 7. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE R ELIED ON THE ORDER OF LD. CIT(A). 8. AFTER HEARING BOTH THE PARTIES WE FIND THAT NO M ATERIAL HAS BEEN BROUGHT ON RECORD THAT THE ASSESSEE HAS INCURR ED ANY EXPENDITURE ON POWER OR TRAVELING. ONLY BEFORE THE LD. CIT(A), THE ASSESSEE HAD ADMITTED THAT SOME TELEPHONE EXPEN SES HAVE BEEN INCURRED, THEREFORE, IN THE ABSENCE OF ANY MA TERIAL NO SUCH ADDITION WAS POSSIBLE AND ACCORDINGLY WE DELE TE THE ADDITION OF RS. 1,20,000/- AND RS. 60,000/- ON ACCO UNT OF POWER AND TRAVELING EXPENSES. 9. GROUND NO. 3 DURING ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT THE ASSESSEE HAS INCURRED EXPENDITURE ON DIESEL, 3 FREIGHT & OCTROI, SHUTTERING CHARGES, LABOUR WELFAR E EXPENSE, LABOUR CHARGES AND CARRIAGE INWARD. BUT SOME VOUCH ERS IN THIS REGARD WERE NOT PRODUCED AND A SUM OF RS. 1,25,000/ - WAS DISALLOWED OUT OF THIS EXPENSES. 10. ON APPEAL, THE LD. CIT(A) CONFIRMED THE DISALLO WANCE BY OBSERVING THAT DISALLOWANCE IS LESS THAN 2% OF THE EXPENSES. 11. BEFORE US THE LD. COUNSEL OF THE ASSESSEE SUBMI TTED THAT THE ADDITION HAS BEEN MADE ON ADHOC BASIS WITHOUT P IN POINTING ANY SPECIFIC DEFECT, THEREFORE, THE SAME IS NOT SU STAINABLE UNDER LAW. 12. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF THE LD. CIT(A). 13. AFTER HEARING BOTH THE PARTIES WE FIND THAT THE AO HAS NOT GIVEN ANY PARTICULAR INSTANCE FOR WHICH VOUCHERS WE RE NOT PRODUCED AND ADDITION HAS BEEN MADE ON ADHOC BASIS WHICH IS NOT SUSTAINABLE UNDER THE LAW. AT THE SAME TIME, I T WAS ADMITTED BEFORE US THAT A FEW VOUCHERS WERE NOT AVA ILABLE. AFTER CONSIDERING THE OVERALL CIRCUMSTANCES WE FIND THAT THE ADDITION HAS BEEN MADE ON HIGHER SIDE AND THEREFOR E, WE SET ASIDE THE ORDER OF LD. CIT(A) AND RESTRICT THE ADDI TION TO RS. 50,000/- WHICH HAS BEEN AGREED TO BY THE LD. COUNSE L OF THE ASSESSEE. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 30.10.2012 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 30.10. 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 4 5