PRITI RATHI, Kota V. DCIT, Kota

ITA 992/JPR/2013

• Counselvise Citation: 99223114 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 18-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK
• Assessee Lawyers: B V MAHESHWARI

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 992/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 SMT. PRITI RATHI M/S. P.R. INDUSTRIES F-153, ROAD NO. 5, IPIA, KOTA CUKE VS. THE DCIT CIRCLE- 1, KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAUPR 5607 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI B.V. MAHESHWARI, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/12/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 2 /12/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), KOTA DATED 24-10-2013 FOR THE ASSESSMENT YEAR 2006 -07 RAISING THEREIN FOLLOWING GROUNDS:- 1. THE AO GROSSLY ERRED ON FACTS AND LAW ON APPLICATION OF SECTION 145(3) THEREBY MAKING TRADIN G ADDITION BY CONSIDERING GROSS PROFIT RATE 12.11% AS AGAINST 11.34% SHOWN BY THE ASSESSEE AND THEREBY MADE ADDIT ION OF RS. 1,15,196/-. THE LD. CIT(A) ALLOWED PART RELIEF OF RS. 65,196/- AND ERRED IN SUSTAINING THE ADDITION OF RS . 50,000/- ITA NO. 992//JP/2013 SMT. PRITI RATHI VS. DCIT CIRCLE- 1, KOTA . 2 2. THAT THE AO GROSSLY ERRED IN MAKING ADDITION BY APPLYING SECTION 40(A)(IA) ON ACCOUNT OF NON-DE DUCTION OF TDS RS. 80,875/- AND THE LD. CIT(A) ALSO ERRED I N CONFIRMING THE SAME. 3. THAT THE AO GROSSLY ERRED ON FACTS AND LAW IN DISALLOWING 10% EXPENSES ON REPAIR AND MAINTENANCE OF RS. 4,850/- AND THE LD. CIT(A) ALSO ERRED IN CONFIRMING THE SAME. 4. THAT THE AO GROSSLY ERRED IN MAKING DISALLOWANCE OUT OF CONVEYANCE EXPENSES OF RS. 18,0 47/- AND THE LD. CIT(A) ALSO ERRED IN CONFIRMING THE SAM E. 5. THAT THE AO GROSSLY ERRED ON FACTS AND LAW IN DISALLOWING 20% TELEPHONE EXPENSES OF RS. 5,600/- A ND THE LD. CIT(A) ALSO ERRED IN CONFIRMING THE SAME. 6. THAT THE AO GROSSLY ERRED ON FACTS AND LAW IN DISALLOWING THE SALES COMMISSION PAID TO SHRI RAJES H RATHI RS. 1,45,500/- AND THE LD. CIT(A) ALSO ERRED IN CON FIRMING THE SAME. 2.1 APROPOS GROUND NO. 1, THE LD. COUNSEL FOR THE A SSESSEE CONTENDS THAT NO SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNT HA VE BEEN POINTED OUT BY THE LD. AO AND THE SAME HAVE BEEN REJECTED ON THE G ROUND THAT THE SCRAP GENERATED BY THE ASSESSEE ON CUTTING OF WIRES WAS S HOWN AT A ROUND FIGURE OF 3% WHICH IS NOT POSSIBLE. IT IS CONTENDED THAT C UTTING OF WIRES IS BY A PROCEDURE OF MEASUREMENT, BESIDE SCRAP DOES NOT CAR RY ANY VALUE AND IT THE AOS ASSUMPTION HAS NO CONSEQUENCE EFFECTIVELY. THEREFORE, REJECTION OF BOOKS OF ACCOUNT BY THE AO ON THE ISSUE IS UNJUS TIFIED. ITA NO. 992//JP/2013 SMT. PRITI RATHI VS. DCIT CIRCLE- 1, KOTA . 3 2.2 APROPOS GROUND NO. 2, IT IS CONTENDED THAT ALL THE PAYMENTS IN QUESTION WERE TRANSPORT CHARGES PAID TO SMALL TRANS PORTERS. NOTHING REMAINS PAYABLE AT THE END OF THE YEAR AS TO DISALL OWANCE U/S 40(A)(IA) OF RS. 80,875/-. RELIANCE IS PLACED IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES (P) LTD. 357 ITR 642 (ALL.) WHEREIN IT HAS BEEN HELD THAT PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE ONLY APPLICABLE TO THE OUTSTANDING AMOUNTS ON YEAR END. SINCE THE AMOUNT I N QUESTION WAS ALREADY PAID, IT CANNOT BE DISALLOWED U/S 40(A)(IA) OF THE ACT. 2.3 THE GROUND NOS. 3 TO 5 ARE NOT PRESSED BY THE L D. AR OF THE ASSESSEE BEING SMALL DISALLOWANCES. HENCE, THE SAME ARE DISMISSED BEING NOT PRESSED. 2.4 APROPOS GROUND NO. 6, QUA PAYMENT OF COMMISSION TO BROTHER IN LAW SHRI RAJESH RATHI, IT IS CONTENDED THAT THE LD. CIT(A) HAS SUMMARILY REJECTED THE GROUND OF THE ASSESSEE STATING THAT TH E SUBMISSIONS ARE NOT SUPPORTED BY ANY EVIDENCE WHICH IS NOT CORRECT. SHR I RAJESH RATHI IS BROTHER OF HUSBAND OF THE ASSESSEE WHO HELPED IN TH E SALES AND THE COMMISSION HAS BEEN PAID FOR SERVICES ACTUAL RENDER ED BY HIM. HE HAS FILED HIS RETURN OF INCOME AND ASSESSED ON THIS INC OME AT THE SAME RATE, BESIDES TDS IS ALSO DEDUCTED FROM COMMISSION WHICH IS SHOWN IN THE RETURN OF INCOME. THE RELEVANT CHALLAN FOR TDS PAYM ENTS ARE ON RECORD. ITA NO. 992//JP/2013 SMT. PRITI RATHI VS. DCIT CIRCLE- 1, KOTA . 4 IN VIEW OF THIS, IT IS SUBMITTED THAT COMMISSION EX PENSES MAY BE ALLOWED THE GROUND OF THE ASSESSEE. 2.5 THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORIT IES BELOW. 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN MY CONSIDERED VIEW, THE AS SESSEES BOOKS OF ACCOUNT HAVE BEEN REJECTED WITHOUT POINTING OUT ANY SPECIFIC DEFECTS AND MERELY ON GENERATION OF SCRAP. IN THE GIVEN FACTS A ND CIRCUMSTANCES, THE BOOKS OF ACCOUNT OF THE ASSESSEE CANNOT BE REJECTED . CONSEQUENTLY, THE ADDITION OF RS. 50,000/- IS DELETED. 2.7 APROPOS GROUND NO. 2, I FIND MERIT IN THE ARGUM ENTS OF THE LD. COUNSEL FOR THE ASSESSEE, SINCE NO AMOUNT PAID TO T RANSPORTERS WAS PAYABLE AT THE END OF THE YEAR, THE JUDGMENT OF HON 'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVIC ES (P) LTD. IS SQUARELY APPLICABLE. THUS GROUND NO. 2 OF THE ASSESSEE IS AL LOWED. 2.8 APROPOS GROUND NO. 6, FROM THE RETURN OF SHRI R AJESH RATHI WHICH IS PLACED ON RECORD IT IS EMERGES THAT HE IS ALSO A SSESSED TO IT ON THE SAME RATE OF TAX AND TDS HAS BEEN DEDUCTED FROM COMMISSI ON. THE RECIPIENT IS IDENTIFIABLE WHO IS BROTHER-IN-LAW OF THE ASSESSEE, SERVICES HAVE BEEN RENDERED. IN VIEW THEREOF, THIS DISALLOWANCE IS DEL ETED. ITA NO. 992//JP/2013 SMT. PRITI RATHI VS. DCIT CIRCLE- 1, KOTA . 5 3.0 IN THE RESULT, ASSESSEE'S APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 2/12/2 015 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 2 /12/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT.PRITI RATHI, KOTA 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE- 1,KOTA 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 992/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR