M/s Sri. Ganesh Shipping Agency, Mangalore V. ACIT, Mangalore

ITA 798/BANG/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89923 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 17-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: V SRINIVASAN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ , ACCOUNTANT MEMBER ITA NOS.798 TO 800/BANG/2014 ASSESSMENT YEARS : 2007-08 TO 2009-10 M/S. SRI GANESH SHIPPING AGENCY, 05-152, SRI RAM BUILDING, KOTTARA CHOWKI, DEREBAIL, MANGALORE. PAN: AAFFS 2694K VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), MANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, CA RESPONDENT BY : DR. P.K. SRIHARI, ADDL. CIT(DR) DATE OF HEARING : 26.05.2015 DATE OF PRONOUNCEMENT : 29.05.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THESE ARE APPEALS BY THE ASSESSEE AGAINST THE COM MON ORDER DATED 27.3.2014 OF THE CIT(APPEALS), MYSORE RELATIN G TO A.YS. 2007-08 TO 2009-10. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THESE APPEALS BY THE ASSESSEE IS AS TO, WHETHER THE CIT(APPEALS) WAS JUS TIFIED IN SUSTAINING ITA NOS.798 TO 800/BANG/2014 PAGE 2 OF 5 DISALLOWANCE TO THE EXTENT OF 10% FROM AND OUT OF D ISALLOWANCE TO THE EXTENT OF 20% MADE BY THE AO IN RESPECT OF EXPENDIT URE INCURRED TOWARDS SPEED MONEY. ACCORDING TO THE ASSESSEE, THE ENTIR E DISALLOWANCE MADE BY THE AO OUGHT TO HAVE BEEN DELETED BY THE CIT(APP EALS). 3. THE ASSESSEE IS A PARTNERSHIP FIRM. IT IS ENGAG ED IN THE BUSINESS OF ACTING AS CLEARING AND FORWARDING AND STEAMER AGENT S. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE PAID RS.62,22,126, RS.56,96,397 AND RS.66,52,331 FO R THE AYS 2007-08 TO 2009-10 IN CASH TO VARIOUS PORT WORKERS TOWARDS INC ENTIVE (SPEED MONEY) THROUGH VOUCHERS, OVER AND ABOVE THE REGULAR PAYMEN T THROUGH NEW MANGALORE PORT TRUST (NMPT). THE ASSESSING OFFICER NOTICED THAT THE SAID PAYMENTS MADE WERE ONLY SUPPORTED BY SELF VOUCHERS AND THAT THE PAYMENTS WERE MADE TO THE GANG LEADERS. THE ASSESS ING OFFICER HELD THAT THE EXPENDITURE CLAIMED WAS NOT INCURRED WHOLL Y AND EXCLUSIVELY TOWARDS THE BUSINESS OF THE ASSESSEE AND CONSIDERIN G THE DEFECTS IN THE VOUCHERS, ESPECIALLY THE UNVERIFIABLE NATURE OF THE DOCUMENTARY EVIDENCE, MADE A DISALLOWANCE OF 20% THEREOF AS NOT GENUINE A ND ACCORDINGLY ADDED A SUM OF RS.13,30,446, RS.12,44,425 AND RS.11,39,28 0 TO THE ASSESSEE'S INCOME IN THE ORDER OF ASSESSMENT PASSED UNDER SECT ION 143(3) OF THE ACT FOR THE AYS 2007-08 TO 2009-10. 4. AGGRIEVED BY THE SAID ORDER OF ASSESSMENTS, THE ASSESSEE PREFERRED APPEALS BEFORE THE CIT(APPEALS), MYSORE. THE LEARNE D CIT(A) PLACING ITA NOS.798 TO 800/BANG/2014 PAGE 3 OF 5 RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH O F THE ITAT, BANGALORE BENCH IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEA R 2004-05 IN ITA NO.1230(BANG)/2007 DT.18.7.2008 , REDUCED THE DISALLOWANCE FROM 20% OF THE EXPENDITURE CLAIMED TO 10%. AGGRIEVED BY TH E ORDER OF THE CIT(APPEALS), THE ASSESSEE HAS PREFERRED THE PRESEN T APPEALS BEFORE THE TRIBUNAL. 5. AT THE OUTSET, THE LEARNED DR SUBMITTED THAT TH ERE WAS NO ERROR IN THE IMPUGNED ORDER OF THE LEARNED CIT(A) AS HE HAD FOLLOWED THE ORDER OF THE CO-ORDINATE BENCH OF THE ITAT, BANGALORE IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2004-05 IN ITA NO.1230(BANG)/2007 DT.18.7.200, WHEREIN SIMILAR DISALLOWANCE MADE IN THE ASSESSEE'S CASE WAS CONSIDERED. IN VIEW OF THE ABOVE, IT WAS PRAYED THAT ASSESSEES APPEALS ON THIS ISSUE ARE LIABLE TO BE DISMISSED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE JU DICIAL DECISION CITED. WE FIND THAT SIMILAR DISALLOWANCE ON ACCOUNT OF SPEED MONEY PAYMENTS WAS CONSIDERED IN THE ASSESSEE'S OWN CASE FOR ASSESSMEN T YEAR 2004-05 ( SUPRA ) AND AT PARA 3 THEREOF IT HAS BEEN HELD AS UNDER : - 3. THE MAIN ISSUE PERTAINS TO DISALLOWANCE MADE BY THE A.O. AT RS.14,37,370 ON ACCOUNT OF EXPENSES INCURRED IN RESPECT OF INCENTIVE PAID TO PORT LABOURERS FOR ASSESSMENT YEA R 2004-05. FROM THE FACTS IT IS SEEN THAT THE A.O. HAS DISALLO WED 20% OF THE CLAIM OF RS.71,86,854 (RS.14,37,370). THE LEARNED C IT (APPEALS), WHEN THE MATTER TRAVELLED BEFORE HIM CON SIDERED THE ITA NOS.798 TO 800/BANG/2014 PAGE 4 OF 5 ARGUMENTS OF THE ASSESSEE'S AUTHORISED REPRESENTATI VE AND GRANTED PART RELIEF TO THE ASSESSEE BY REDUCING THE ADDITIO N BY (RS.7,18,685). FROM THE FACTS APPEARING ON RECORD, IT IS SEEN THAT THE ASSESSING OFFICER HIMSELF MADE THE ESTIMATED DI SALLOWANCE. THE LEARNED CIT (APPEALS), AFTER HAVING NOTED VARIO US FACTORS SUCH AS INCENTIVE PAID TO LABOURERS, ADDITIONAL PAY MENT ON ACCOUNT OF EXTRA HOURS OF WORK ETC., AGAIN ESTIMATE D THE SAME BY REDUCING IT TO RS.7,18,685. CONSIDERING THIS ASPECT , WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (APPEALS). AT THE TIME OF HEARING, LD. D.R. WAS UNABLE TO ASSAIL THE CONCLUSION DRAWN BY THE LEARNED CIT (APPEALS) WITH ANY CONVINC ING MATERIAL. WE, THEREFORE, CONFIRM THE ORDER OF THE L EARNED CIT (APPEALS). IT IS ORDERED ACCORDINGLY. 7. FOLLOWING THE AFORESAID DECISION OF THE CO-ORDIN ATE BENCH OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2004-05 ( SUPRA ), WE HOLD THAT THE LEARNED CIT(A) WAS JUSTIFIED IN DE LETING THE DISALLOWANCE ON ACCOUNT OF SPEED MONEY EXPENDITURE CLAIMED TO TH E EXTENT OF 50% THEREOF, THEREBY RESTRICTING IT TO 10% OF THE SAID EXPENDITURE CLAIMED. 8. IN THE RESULT, ALL THE APPEALS BY THE ASSESSEE A RE DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MAY , 2015 . SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 29 TH MAY , 2015 . /D S/ ITA NOS.798 TO 800/BANG/2014 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR/ SENIOR PRIVATE SECRETARY ITAT, BANGALORE.