DCIT, C-7, Ludhiana V. M/s R.B. Knit Exports, Ludhiana

ITA 825/CHANDI/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9209 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 01-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENU AMITABH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH B, CHANDIGARH , ! . .., # $, %& BEFORE: SH. SANJAY GARG, JM & DR. B.R.R. KUMAR, AM ./ ITA NO. 825/CHD/2018 / ASSESSMENT YEAR : 2013-14 THE DCIT CIRCLE-7, LUDHIANA M/S R.B. KNIT EXPORTS 415-INDUSTRIAL AREA-A LUDHIANA ./ PAN NO: AABFR4116K / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI. ASHWANI KUMAR MS. KANIKA GUPTA SHRI. ADITYA KUMAR # ! ' / REVENUE BY : SMT. RENU AMITABH $ % ! &/ DATE OF HEARING : 25/10/2018 '()* ! &/ DATE OF PRONOUNCEMENT : 18/12/2018 %'/ ORDER PER DR. B.R.R. KUMAR, A.M: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF THE LD. CIT(A)-3, LUDHIANA DT. 05/03/2018. 2. IN THE PRESENT APPEAL REVENUE HAS RAISED THE FOL LOWING GROUNDS: I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS JUSTIFIED IN HOLDING THE DI SALLOWANCE OF FABRICATION CHARGES MADE BY THE ASSESSING OFFICER AS NOT PROPER AND RESTRICT ING THE SAME TO RS. 25,00,000/- AGAINST THE DISALLOWANCE MADE OF RS. 3,73,97,584/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COULD NOT DISCHARGE OF ITS ONUS BEFORE THE ASSESSIN G OFFICER BY JUSTIFYING THE GENUINENESS THESE EXPENSES AND ESTABLISHING THE IDENTITY OF THE PERSONS TO WHOM THE EXPENSES CLAIMED TO HAVE BEEN PAID IN CASH. II) THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE IT IS FINALLY DISPOSED OFF. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS. 24,49,940/-. THE ASSE SSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT, SALE OF HOSIE RY AND ALSO EARNING FABRICATION COMMISSION. 2 4. DURING THE ASSESSMENT PROCEEDINGS ENQUIRIES WERE CONDUCTED REGARDING THE PAYMENTS OF FABRICATION CHARGES ON WHICH NO TD S WAS DEDUCTED. THIS PERTAINS TO 1048 PARTIES TO WHOM PAYMENTS HAVE BEEN MADE BELOW RS. 75,000/-. BASED ON THE REPORT OF THE INSPECTOR ABOUT NON TRAC EABILITY OF SUCH ADDRESSES GIVEN BY THE ASSESSEE, THE ASSESSING OFFICER HAS AS KED THE ASSESSEE TO PRODUCE PERSONS FOR VERIFICATION. THE ASSESSEE COULD PRODUC E ONLY 57 PERSONS ONLY OUT OF THE 1048 PERSONS WHO HAVE RECEIVED PAYMENTS ON ACCO UNT OF FABRICATION CHARGES. CONSEQUENTLY THE ASSESSING OFFICER HAS DIS ALLOWED RS. 3,73,97,580/- OUT OF RS. 9,84,58,970/- OF SUCH EXPENSES OUT OF THE FA BRICATION CHARGES WHEREIN AMOUNTS HAVE BEEN PAID IN CASH AND ARE BELOW RS. 75 ,000/-. 5. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE L D. CIT(A) WHO HAS UPHELD AN AMOUNT OF RS. 25,00,000/- OUT OF THE DISA LLOWANCE OF RS. 3,73,97,580/- MADE BY THE ASSESSING OFFICER. THE REVENUE CAME IN APPEAL BEFORE US AGAINST THE ORDER OF THE LD. CIT(A). 6. BEFORE US IT WAS SUBMITTED THAT THE G.P. RATE IS INCREASED TO 35.20% FROM 31.12% FROM THE EARLIER YEARS. FURTHER THE ASSESSIN G OFFICER HAS DISALLOWED RS. 10,00,000/- IN THE SUBSEQUENT A.Y. 2014-15 AND RS. 20,00,000/- FOR THE A.Y. 2015- 16. THE SIMILAR MATTER HAS BEEN DEALT IN DETAIL IN THE ASSESSEES OWN CASE IN ITA NO. 265 TO 267/CHD/2017 WHEREIN THE DISALLOWANCES C ONFIRMED BY THE CIT(A) HAVE BEEN UPHELD IN TOTO. HENCE, KEEPING THE SAME R ATIONALE IN THE ABSENCE OF ANY CHANGE OF PERCEPTIBLE FACTS, AND DISALLOWANCE M ADE BY THE REVENUE ITSELF IN THE SUBSEQUENT YEARS, WE HEREBY DECLINE TO INTE RFERE IN THE ORDER OF THE LD. CIT(A). 7. AS A RESULT THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- . .., # $, (SANJAY GARG ) ( DR. B.R.R. KUM AR) / JUDICIAL MEMBER %& / ACCOUNTANT MEMBER AG DATE: 18/12/2018 (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2 THE RESPONDENT , 3. CIT, 4. THE CIT(A), 5. DR, ITAT, CHANDIGARH, 6. GUARD FILE