Ashok Kumar Jalan, Kolkata V. ACIT, RG-39, KOLKATA, Kolkata

ITA 950/KOL/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3413 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 29-06-2015
• Court: TRIBUNAL
• Department Lawyers: MD GHAYAS UDDIN
• Assessee Lawyers: S K SOM
• Keywords: Gift
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: KOLKATA [BEFORE SHRI MAHAVIR SINGH, JM] I.T.A NO.950/KOL/2015 ASSESSMENT YEAR: 2006-07 ASHOK KUMAR JALAN VS. ADDL. COMMR. OF INCOME-T AX, (PAN: ACOPJ1651N) RANGE-39, KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 29.12.2015 DATE OF PRONOUNCEMENT: 20.01.2016 FOR THE APPELLANT: SHRI S. K. SOM, CA FOR THE RESPONDENT: MD. GHAYAS UDDIN, JCIT, SR. DR ORDER THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-11, KOLKATA VIDE APPEAL NO. 245/CIT(A)-11/ADDL.CIT-39/14-15/KOL DATED 23.03.201 5. ASSESSMENT WAS FRAMED BY ADDL. CIT, RANGE-39, KOLKATA U/S. 143(3) OF THE INCOME-TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006-07 VIDE HIS ORDER DA TED 31.12.2008. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS A GAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN RESPECT TO DISALLOWANCE OF DEWALI E XPENSES OF RS.31,556/- AND RESTRICTING THE TELEPHONE EXPENSES AT RS.10,000/- OUT OF ADDITION M ADE BY AO AT RS.14,714/-. 3. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT THE ASSESSEE HAS CLAIMED DEWALI EXPENSES AT RS.31,556/- FOR PERFORMING PUJA AND CELEBRATION OF DEWALI WITH THE STAFF AND CUSTOMERS. THIS FACT HAS NOT BEEN DENIED EITHER BY AO OR BY CIT(A). THE AO HAS NOT DISCUSSED ANYTHING BU T MADE SIMPLE DISALLOWANCE WITHOUT ANY REASONING. DEWALI EXPENSES CONSISTS MAINLY SWEETS, CLOTHES, PUJA MATERIAL ETC. AND GIFT GIVEN TO EMPLOYEES DURING DEWALI FESTIVAL. THIS IS CUSTOMAR Y EXPENSES AND ALLOWABLE. ACCORDING TO ASSESSEE, THIS WAS ALLOWED IN EARLIER YEARS ALSO AN D IN SUBSEQUENT YEARS ALSO. ONLY THIS YEAR, THIS WAS DISALLOWED WITHOUT ANY BASIS. I FIND THAT THIS IS ALLOWABLE EXPENDITURE AND WITHOUT ANY REASONING THE SAME SHOULD NOT HAVE BEEN DISALLOWED. ACCORDINGLY, I DELETE THE ADDITION AND ALLOW THE CLAIM OF THE ASSESSEE. 4. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF INTEREST PAID @ 24% TO PERSONS SPEC IFIED U/S. 40A(2)(B) OF THE ACT AMOUNTING TO RS.81,990/-. 2 ITA NO.950/KOL/2015 ASHOK KUMAR JALAN, AY 2006-07 2 5. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND FROM THE ORDERS OF THE LOWER AUTHORITIES THAT THE AO RESTRICTED THE INTEREST PAID AT 22% PER ANNUM TO VARIOUS LOAN CREDITORS. ACCORDING TO AO, THE ASSESSEE WAS PAYING A HIGH RATE OF INTEREST OF 24% PER ANNUM TO FEW PARTIES WHILE SOME OTHER LOAN CREDITORS WERE BEING PAID @ 18 TO 22% PER ANNUM. THE AO DISALLOWED AND CIT(A) CON FIRMED THE SAME. I FIND FROM THE FACTS OF THE CASE THAT THE AO ALSO ACCEPTED THE PAYMENT O F INTEREST AS GENUINE AND TO RELATIVES AT 22% AS REASONABLE. WHAT WAS THE BASIS FOR THE SAME I F AILED TO UNDERSTAND. THE ASSESSEE HAS PAID ONLY 24% TO LOAN CREDITORS AND OTHER PARTIES HAVE DECLARED THIS INCOME IN THEIR RETURNS OF INCOME. HENCE, I DELETE THE ADDITION. APPEAL OF AS SESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 20.01.2016 SD/- (MAHAVIR SINGH) JUDICIAL MEMBER DATED : 20TH JANUARY, 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SHRI ASHOK KUMAR JALAN, C/O SHRI S. K. SONI, CA, 36, STRAND ROAD, 3 RD FLOOR, R NO. 11, KOLKATA-700 001. 2. RESPONDENT ADDL. CIT, RANGE-39, KOLKATA. 3. CIT(A) , KOLKATA 4. CIT , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .