SABBIR KHAN, Jaipur V. ACIT, Jaipur

ITA 977/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2187 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 08-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEENA JAIF JCIT DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Gift; Business expenditure
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 977/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. SHRI SABBIR KHAN, PROP. PERSIAN CARPETS, 12 MORI BRAHMPURI, JAIPUR. CUKE VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-5, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AEHPK0703M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L.PODDAR (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JAIF (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06.04.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 10 /04/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-2, JAIPUR DATED 20.09.2016 PERTAINING TO A.Y. 2013-14. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN PASSING THE ORDER U/S 143(3) OF THE IN COME TAX ACT, 1961 WHICH IS VOID AB-INITIO DESERVES TO BE QU ASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN SUSTAINING THE DISALLOWANCE OF RS. 18, 58,229/- OUT OF SALE PROMOTION EXPENSES DISALLOWED BY ASSESSING OFFICER OF RS. 34,47,651/-. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 608 55/- OUT OF TRAVELING EXPENSES. 4. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT, HE DOES NOT WISH TO PRESS GROUND NO. 1 AND ALSO GROUND NO. 3 ON ACCOUNT OF SMALLNESS OF THE DISALLOWANCE. 2 ITA NO. 977/JP/2016 SHRI SABBIR KHAN, JAIPUR. 3. THE ONLY EFFECTIVE GROUND IS, GROUND NO. 2 THAT READS AS UNDER:- 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN SUSTAINING THE DISALLOWANCE OF RS. 18,58,2 29/- OUT OF SALE PROMOTION EXPENSES DISALLOWED BY ASSESSING OFFICER OF RS. 34,47,651/. 4. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY AND THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VID E ORDER DATED 30 TH JANUARY, 2016. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER MADE DISALLOWANCE OUT OF SALE PROMOTION EXPENSES OF RS. 37,16,458/- DISALLOWANCE IS OUT OF TRAVELLING EXPENSES SUCH OF RS. 60,855/- AND DISALLOWANCE OUT OF TELEPH ONE EXPENSE OF RS. 47,527/- AND DISALLOWANCE OUT OF BUSINESS EXPENSES OF RS. 23,05 0/-. 5. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED THE AP PEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED TH E APPEAL. WHILE PARTLY ALLOWING THE APPEAL, THE LD. CIT(A) RESTRICTED THE DISALLOWA NCE MADE OUT OF SALE PROMOTION DISALLOWANCE TO THE EXTENT OF 50% OF THE TOTAL DISA LLOWANCE AND REST OTHER DISALLOWANCE WERE CONFIRMED. 6. AGGRIEVED BY THIS, THE ASSESSEE HAS PREFERRED T HE PRESENT APPEAL. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF AS RESPECT OF DISALLOWANCE MADE OUT OF THE SALE PROMOT IONS EXPENSES. 6.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENT ATIVES OPPOSED THE SUBMISSIONS. 6.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THOUGH THE ORDER OF THE AUTHORITIES BELOW. IT IS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAS BEEN CLAIMING SUCH EXPENSES IN ALL 3 ITA NO. 977/JP/2016 SHRI SABBIR KHAN, JAIPUR. THE ASSESSMENT YEARS AND THE REVENUE HAS ACCEPTED T HE CLAIM, THE ASSESSMENT YEAR 2012-13, 2009-10, WHERE THIS SCRUTINY, ASSESSMENT W AS MADE. HE SUBMITTED THAT THERE IS NO CHANGE INTO FACTS AND CIRCUMSTANCES IN THE PRESENT CASE. WE FIND THAT THE LD. CIT(A) IN THE ORDER AS RESTRICTED THE 50% D ISALLOWANCE NO BASIS OF RESTRICTING THE SAME ON THE 50% HAS BEEN GIVEN. THE REVENUE H AS BEEN ALLOWING SUCH AN EXPENSES TO THE ASSESSEE IN PAST. IT IS SETTLED PO SITION OF LAW THAT ASSESSEE IS REQUIRED TO PROVE THE EXPENSES BY PLACING EVIDENCE IN SUPPORT THEREOF. THE SOLE BASIS FOR DISALLOWANCE OF THE EXPENDITURE IS THAT T HE ASSESSEE HAS NOT DISCLOSED THE IDENTITY OF THE PERSONS WHOM SUCH GIFTS WERE GIVEN FOR THE PURPOSE OF SOLE PROMOTION BEFORE LD. CIT(A). THE ASSESSEE HAS GIVE N THE NAME OF THE FEW PERSONS, THE GROSS PROFIT OF THE ASSESSEE IS RS. 1,85,96,260 /- AGAINST WHICH THE ASSESSEE HAS CLAIMED SALE PROMOTION EXPENSES OF RS. 37,16,458/-. THE REVENUE HAS ALLOWED THE SALE PROMOTION EXPENSES IN THE ASSESSMENT YEAR 2012 -13 OF RS. 26,34,937/- WHEN THE GROSS PROFIT WAS 1,34,81,233/- IN THE PRESENT Y EAR, THERE IS INCREASE IN GROSS PROFIT OF 50 LAKHS. HOWEVER, THE SALE PROMOTION EXP ENSES ARE INCREASE TO ABOUT 11 LAKH. UNDER THESE FACTS, WE DIRECT THE ASSESSING O FFICER TO DELETE THE DISALLOWANCE. THIS GROUND OF THE ASSESSEES APPEAL IS PARTLY ALLO WED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 977/JP/2016 IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON MONDAY ,THE 10 TH DAY OF APRIL 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER 4 ITA NO. 977/JP/2016 SHRI SABBIR KHAN, JAIPUR. JAIPUR DATED:- 10 /04/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI SABBIR KHAN, JAIPUR 2. THE RESPONDENT THE ACIT, CIRCLE-5, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 977/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 977/JP/2016 SHRI SABBIR KHAN, JAIPUR.