FLYKING COURIER SERVICES P. LTD, MUMBAI V. ACIT CIR 4(2), MUMBAI

ITA 9109/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8943 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 28-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F BENCH BEFORE SHRI I.P. BANSAL, (JUDICIAL MEMBER) AND SHRI B.RAMA KOTAIAH (ACCOUNTANT MEMBER) ITA NO.9109/MUM/2010 ASSESSMENT YEAR: 2007-08 M/S. FLYING COURIER SERVICES P. LTD. 2 ND FLOOR, AMBALA BLDG., KALBADEVI ROAD, MUMBAI 400 002 PAN NO. AAACF0215D VS. ACIT CIR 4(2), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : M R. SATISH MODY RESPONDENT BY : MR. RAJARSHI DWIVEDY DATE OF HEARING : 10.09.2012 DATE OF PRONOUNCEMENT : 21.09.20 12 ORDER PER B.RAMAKOTAIAH, AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29.10.2010 OF THE COMMISSIONER OF INCOME TAX (APPEA LS) FOR THE ASSESSMENT YEAR 2007-08. 2. WE HAVE HEARD THE LD. COUNSEL FOR THE ASSESSEE A ND LD. DR IN THIS REGARD. ITA NO.9109/MUM/2010 M/S. FLYING COURIER SERVICES P. LTD. 2 3. THE GROUND NO. 1 RAISED BY THE ASSESSEE IS WITH REFERENCE TO DISALLOWANCE OF RS.1,38,088/- IN RESPECT OF ESIC AN D EPF. 3.1 IT WAS THE ASSESSING OFFICERS CONTENTION THAT THE AMOUNTS WERE PAID AFTER THE DUE DATES; WHEREAS, BEFORE THE CIT(A), IT WAS ALSO SUBMITTED THAT THE AMOUNTS WERE MADE ON THE D UE DATE BEFORE FILING THE RETURN OF INCOME. IT WAS SUBMITT ED THAT THE PAYMENTS WERE MADE WITHIN THE GRACE PERIOD ALLOWED FOR MAKING THE PAYMENT OF EPF AND THE DELAY OF ESIC PAYMENT IS DUE TO COMPUTER PROBLEM. HOWEVER, IT WAS SUBMITTED THAT TH E ENTIRE AMOUNT WAS PAID BEFORE FILING THE OF RETURN OF INC OME AND ACCORDINGLY THE AMOUNTS ARE ALLOWABLE FOLLOWING TH E DECISION OF HONBLE SUPREME COURT NIN THE CASE OF COMMISSIONER OF INCOME- TAX V. ALOM EXTRUSIONS LTD REPORTED IN 319 ITR 306 (SC) 3.2 FURTHER, IN THE CASE OF MAHARASHTRA CITY CORPORA TION LTD., 14 OF 2000 THE HONBLE BOMBAY HIGH COURT HAS HELD THAT THE PAYMENT MADE WITHIN THE GRACE PERIOD IS DEDUCTIBLE AMOUNT. 4. IN VIEW OF THE LEGAL PRINCIPLES, WE DIRECT THE A SSESSING OFFICER TO ALLOW THE AMOUNT AS CLAIMED. THE GROUND NO 1 IS ACCORDINGLY, ALLOWED. ITA NO.9109/MUM/2010 M/S. FLYING COURIER SERVICES P. LTD. 3 5. GROUND NO. 2 PERTAINS TO ADHOC ADDITION OUT OF O PERATING EXPENSES OF RS.1,00,000/- AND GENERAL EXPENSES OF R S.50,000/- . 5.1 IT WAS NOTICED BY THE ASSESSING OFFICER THAT TH E ASSESSEE HAS NOT SUBMITTED PROPER VOUCHERS OF RS.27,369/-. THE A SSESSING OFFICER DISALLOWED RS.1,00,000/- OUT OF THE TOTAL CLAIM OF FRIGHT AND TRANSPORTATION CHARGES. LIKEWISE GENERAL EXPENSES O F RS.3,59,63,653/-, THE ASSESSING OFFICER DISALLOWE D RS.50,000/- TOWARDS UNVERIFIABLE NATURE OF EXPENSES. THE LD.CI T(A) UPHELD THE SAME. 6. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE HAS S UBMITTED THAT THE AO HAS EXAMINED THE VARIOUS VOUCHERS AND FOUND THAT ONLY THE EXPENDITURE OF RS.26,369/- OUT OF OPERATING EXPENSE S WERE NOT VERIFIABLE WHEREAS THE DISALLOWANCE OF RS.1,00,000/ - ON ADHOC BASIS WAS MADE. LIKEWISE WITHOUT QUANTIFYING THE EX PENSES OF DISALLOWANCE RS,50,000/- WAS MADE OUT OF GENERAL EX PENSES. IT WAS SUBMITTED THAT THE ASSESSEES NATURE OF BUSINES S I.E. COURIER BUSINESS REQUIRES CASH PAYMENTS AND MANY OF THE VOU CHERS ARE NOT VERIFIABLE IN NATURE. HOWEVER, IT WAS SUBMITTED THA T THE ENTIRE EXPENDITURE WAS FOR THE PURPOSE OF DISALLOWANCE. 6.1 THE LD.DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. ITA NO.9109/MUM/2010 M/S. FLYING COURIER SERVICES P. LTD. 4 7. WE HAVE CONSIDERED THE ISSUE AND PERUSED THE ORD ERS. THE ASSESSING OFFICER, AFTER NOTICING ONLY AN AMOUNT OF RS.27,369/- WAS NOT VERIFIABLE, DISALLOWANCE AN AMOUNT OF RS.1,00,0 00/- WITHOUT ANY REASONS. FURTHER, DISALLOWANCE OF RS.50,000/- O UT OF RS.3.59,653/-, IS ALSO ON HIGHER SIDE. THE CONCERN ED NATURE OF BUSINESS OF THE ASSESSEE AND NEED FOR SPENDING THE AMOUNT BY CASH IN THE BUSINESS, WE, HOWEVER, RESTRICT THE DIS ALLOWANCE TO RS.30,000/- OUT OF OPERATING EXPENSES AND RS.25,000 /- OUT OF THE GENERAL EXPENSES. ACCORDINGLY, ASSESSING OFFICER IS DIRECTED TO MODIFY THE DISALLOWANCE. ACCORDINGLY, THE GROUNDS A RE PARTLY ALLOWED. 8. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER, 2012 SD/- ( I.P. BANSAL) JUDICIAL MEMBER SD/- (B.RAMAKOTAIAH) ACCOUNTANT MEMBER MUMBAI, DATED 21 ST SEPTEMBER, 2012 RASIKA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME TAX 9, MUMBAI 4. THE COMMISSIONER OF INCOME TAX, MUMBAI 5. THE DEPARTMENTAL REPRESENTATIVE, BENCH F MUMB AI ITA NO.9109/MUM/2010 M/S. FLYING COURIER SERVICES P. LTD. 5 //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI