ALGOO SINGH, MIRZAPUR V. JOINT COMMISSIONER OF INCOME TAX, RANGE-III, MIRZAPUR

ITA 91/ALLD/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2521 (ITAT-ALLAHABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 07-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRAVEEN GODBALE
• Keywords: Depreciation
• Section: 143(3); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ALLAHABAD BENCH, ALLAHABAD ( THROUGH VIRTUAL COURT) BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.91 /ALLD/2018 ASSESSMENT YEAR: 2012 - 13 SHRI ALGOO SINGH CHAUKIYA POST KHANJADIPURCHUNAR, MIRZAPUR V. DCIT, CIRCLE 3, MIRZAPUR TAN/PAN: AVIPS 2959 M (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PRAVEEN GODBALE, ADVOCATE RESPONDENT BY: SHRI A. K. SINGH, SR. DR DATE OF HEARING: 10 . 11 . 2020 DATE OF PRONOUNCEMENT: 27 . 11 . 2020 O R D E R PER SHRI VIJAY PAL RAO , JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS D IRECTED AGAINST THE ORDER DATED 21.12.2017 PASSED BY COMMIS SIONER OF INCOME TAX (APPEALS ) , ALLAHABAD FOR THE ASSESSMENT YEAR 2012 - 13 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT IN ANY VIEW OF THE MATTER ORDER PASSED U/S 143(3) DATED ON 30.01.2015 IS BAD BOTH ON THE FACTS AND IN LAW HENCE THE DECLARED INCOME SHOULD HAVE BEEN ACCEPTED. 2. THAT IN ANY VIEW OF THE MATTER THE LEARNED CIT(A) WAS WRONG IN DECIDING THE APPEAL EX PARTE WITHOUT PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE AND THE ORDER OFCIT(A) IS NOT A REASONED/ SPEAKING ORDER IN THE EYES OF LAW AND THEREFORE THE EX PARTE APPEAL AS DECIDED IS HIGHLY UNJUSTIFIED. 3. THAT IN ANY VIEW OF THE MATTER DISALLOWANCE OF RS.3, 00,000/ - UNDER THE HEAD EXPENDITURE CLAIMED IN PROFIT & LOSS ACCOUNT DISALLOWANCE BY THE ASSESSING OFFICER AND CONFIRMED BY CIT(A) IS NOT CORRECT HENCE UNCALLED FOR. ITA NO.91/ALLD/2018 ASSESSMENT YEAR: 2012 - 13 SHRI ALGOO SINGH 2 4. THAT IN ANY VIEW OF THE MATTER DISALLOWANCE OF RS. 87,750/ - UNDER HEADS OF DEPRECIATION BY TWO LOWER AUTHORITIES IS UNWARRANTED AND HIGHLY UNJUSTIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THAT IN ANY VIEW OF THE MATTER DISALLOWANCE OF RS. 58,757/ - AS MADE IN A VERY CASUAL MANNER BY ASSESSING OFFICER VIDE PARA 4 OF THE ORDER WITHOUT A NY VALID REASON WHICH IS HIGHLY UNJUSTIFIED AND ILLEGAL. 6. THAT IN ANY VIEW OF THE MATTER INTEREST CHARGED U/S 234A,234B AND 234C OF THE INCOME TAX ACT IS HIGHLY UNJUSTIFIED. 7. THAT IN ANY VIEW OF THE MATTER THE APPELLANT RESERVES HIS RIGHTS TO TAKE ANY FRESH GROUND OF THE APPEAL BEFORE HEARING OF THE APPEAL. IT IS THEREFORE PRAYED THAT A SUITABLE ORDER MAY KINDLY BE PASSED AND RELIEF MAY PLEASE BE ALLOWED ACCORDINGLY. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS STATED AT BAR THAT THE ASSESSEE DOES NOT PRESS GROUND NO. 1, 2 AND 4 TO 7 OF THE GROUNDS OF APPEAL AND THE SAME MAY BE DISMISSED AS NOT PRESSED. THE LD. DR HAS RAISED NO OBJECTION IF THE GROUND NO. 1, 2 AND 4 TO 7 OF T HE APPEAL ARE DISMISSED AS NOT PRESSED. ACCORDINGLY, GROUND NO. 1, 2 AND 4 TO 7 ARE DISMISSED BEING NOT PRESSED. THE ONLY GROUND PRESSED BY THE ASSESSEE IS GROUND NO. 3 REGARDING A DISALLOWANCE OF RS. 3,00,000/ - ON ACCOUNT OF EXPENDITURE CLAIMED BY THE ASSE SSEE IN THE PROFIT & LOSS ACCOUNT. 3. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED THE REQUISITE DETAILS / EXPLANATION IN COMPLIANCE TO THE NOTICES ISSUED BY THE AO. THIS FACT HAS BEEN A CCEPTED BY THE AO IN THE ASSESSMENT ORDER ITSELF. HOWEVER, THE AO HAS MADE AN ADHOC DISALLOWANCE OF EXPENSES ON THE GROUND THAT THE COMPLETE BILLS AND VOUCHERS IN RESPECT OF THE EXPENSES ARE NOT FURNISHED BY THE ASSESSEE. THE LD. AR HAS CONTENDED THAT ON T HE ONE HAND, THE AO HAS ACCEPTED THE FACT THAT THE ASSESSEE HAS PRODUCED ALL THE DETAILS ITA NO.91/ALLD/2018 ASSESSMENT YEAR: 2012 - 13 SHRI ALGOO SINGH 3 AND EXPLANATIONS AS REQUIRED BY THE AO AND ON THE OTHER HAND, AN ADHOC DISALLOWANCE HAS BEEN MADE ON ACCOUNT OF EXPENSES WHICH IS HIGHLY ARBITRARY AND UNJUSTIFIED. THE AO HAS NOT POINTED OUT WHICH OF THE EXPENSES ARE NOT SUPPORTED BY THE BILLS AND VOUCHERS AND, THER EFORE, ARE NOT VERIFIABLE BUT A GENERAL AND VAGUE R EASONING HAS BEEN GIVEN BY THE AO TO MAKE AN ADHOC DISALLOWANCE WHICH IS NOT SUSTAINABLE . IN SUPPORT OF HI S CONTENTION, H E HAS RELIED UPON THE FOLLOWING DECISIONS: I. 254 ITR 215 (SC) IN THE CASE OF J.J. ENTERPRISES VS COMMISSIONER O F INCOME - TAX DATED 14.09.2001 II. 176 ITD 609 (KOL - TRIB) IN THE CASE OF BHAGWATI GASES LTD. V. DCIT 4. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE AO HAS CARRIED OUT A TEST CHECK OF BILLS AND VOUCHERS PRODUCED BY THE ASSESSEE AND FOUND THAT THE COMPLETE BILLS AND VOUCHERS WERE NOT PRODUCED BY THE ASSESSEE AND CONSEQUENTLY THE EXPENSES WERE NOT FULLY VERIFIABLE. THE AO HAS MADE A REASONABLE DISALLOWANCE OF RS. 3,00,000/ . HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS A S WELL AS RELEVANT MATERIALS ON RECORD, IT IS NOTED THAT THE AO DULY RECORDED IN THE ASSESSMENT ORDER THAT THE COUNSEL OF THE ASSESSEE HAS APPEARED ALONG WITH THE ACCOUNTANT OF THE ASSESSEE FROM TIME TO TIME DURING THE ASSESSMENT PROCEEDINGS AND FILED REQUISITE DETAILS / EXPLANATIONS WHICH HAS BEEN DISCUSSED WITH THE COUNSEL OF THE ASSESSEE.EVEN THE AO HAS NOT DOUBTED THE NET PROFIT RATIO SHOWN BY THE ASSESSEE FROM THE GROSS RECEIPT OF RS.5,36,20,993/ - IN THE BUSINESS OF CIVIL CONTRACT WORK AND LABOUR SUPPLY. THE AO HAS MA DE AN ADHOC DISALLOWANCE OF RS. 3,00,000/ - ON THE GROUND THAT I N THE ABSENCE OF COMPLETE BILLS AND VOUCHERS, THE EXPENSES ARE NOT FULLY VERIFIABLE. THE AO HAS NOT GIVEN A SINGLE INSTANCE OF THE EXPENSES WHICH IS NOT SUPPORTED BY THE BILLS AND VOUCHERS. FURTHER THE AO HAS ALSO ACCEPTED THE FACT THAT THE EXPENSES CLAIME D BY THE ASSESSEE CANNOT BE DENIED IN TOTO HAVING REGARD TO THE BUSINESS AND EXPENSES ITA NO.91/ALLD/2018 ASSESSMENT YEAR: 2012 - 13 SHRI ALGOO SINGH 4 INCURRED BY THE ASSESSEE. ONCE THE AO WAS SATISFIED WITH THE INCURRENCE OF THE EXPENSES FOR THE PURPOSE OF BUSINESS THEN THE ADHOC DISALLOWANCE MADE BY THE AO ON SUCH A V AGUE REASON IS HIGHLY ARBITRARY. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN THE AO HAS NOT EVEN POINTED OUT ANY DEFECT IN THE CLAIM OF EXPENSES OR SPECIFIED A N Y EXPEN DITURE WHICH IS NOT SUPPORTED BY THE BILLS AND VOUCHERS, THE ADHOC DISA LLOWANCE MADE BY THE AO IS NOT SUSTAINABLE AND THE SAME IS DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN COURT ON 27 /11 /2020. SD/ - [ VIJAY PAL RAO ] JUDICIAL MEMBER DATED: 27 / 11 /2020 RS COPY FORWARDED TO: 1. APPELLANT SHRI ALGOO SINGH 2. RESPONDENT - DCIT, CIRCLE 3, MIRZAPUR 3. CIT(A) - 4. CIT 5. DR - BY ORDER ASSISTANT REGISTRAR