Babul Products Pvt. Ltd., Ahmedabad V. The ACIT (OSD) Range-1, Ahmedabad

MA 151/AHD/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7883 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 06-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NK GOEL
• Assessee Lawyers: PIYUSH AGRAWAL
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER BABUL PRODUCTS PVT. LTD. AHMEDABAD PAN: AABCB1866F (APPELLANT) VS THE A CIT (OSD) , RANGE - 1 , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI N.K. GOEL , SR. D . R. ASSE SSEE BY: SHRI PIYUSH AGRAWAL , A.R. DATE OF HEARING : 20 - 12 - 2 019 DATE OF PRONOUNCEMENT : 20 - 01 - 2 020 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS MISCELLANEOUS APPLI CATIO N IS ARISING OUT OF ITA NO. 3537/AHD/2016 ASSESSMENT Y EAR 2013 - 14 VIDE ORDER DATED 17 - 09 - 2018 WHICH IS REPRODUCED AS UNDER: - THIS IS A MISCELLANEOUS APPLICATION FILED IN THE CASE OF BABUL PRODUCTS PVT. LTD. ARISING OUT OF THE ORDER PASSED BY THE HON' BLE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD BENCH 'D', AHMEDABAD DATED 17.09.2018. 2. THE APPELLANT ABOVE NAMED PRESENTS WITH THIS APPLICATION FOR THE RECTIFICATION OF CERTAIN MISTAKES APPARENT FROM THE RECORD IN THE SAID ORDER. 3. THE APPEL LANT HAD PREFERRED AN APPEAL AND THE RELEVANT GROUNDS 1 TO 4 OF THE APPEAL ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OFRS.20,000/ - OUT OF VEHICLE MAINTENANCE EXPENSES. M.A. NO. 15 1 /AHD/2019 (I N I T A NO . 35 37 / A HD/20 16 ) A SS ESSMENT YEAR 2013 - 14 M.A. NO. 15 1/AHD/2019 ( I.T.A NO. 35 37 /AHD/20 16) A.Y. 2013 - 14 PAGE NO BABUL PRODUCTS PVT. LTD. VS. A CIT (OSD) 2 2. THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OFRS.18,77,565/ - MADE BY THE AO OUT OF PAYMENT AND PROVISIONS TO EMPLOYEES. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN HOLDING THAT THE BUSINESS OPER ATION OF THE APPELLANT HAS BEEN DISCONTINUED SINCE LONG AND IT HAS DECLARED ONLY INCOME FROM OTHER SOURCES WITHOUT CONSIDERING THE FACT THAT THE REVENUE HAS ACCEPTED THE CONDUCTING OF BUSINESS OPERATIONS. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A MEND OR MODIFY ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 4. THE HON. TRIBUNAL HAS IN PARA 2 OF THE ORDER HELD THAT THE GROUND OF APPEAL OF ITA NO. 560. 561/AHD/2016 ARE IDENTICAL BASED ON SIMILAR ISSUES AND FACTS. GROUND NO. 2 O F ITA NO. 3 537/AHD/2016 IS ALSO IDENTICAL TO THE GROUNDS OF APPEALS OF ITA NO. 560 & 5 61/AHD/2016 AND TH EREFORE FOR THE SAKE OF CONVENIENCE ITA NO. 560/AHD/206 HAS BEEN TAKEN AS THE LEAD CASE AND THE FINDINGS HAVE BEEN MADE APPLICABLE TO THE OTHER GROUNDS OF APPEAL IN ITA NO. 561 & 35377AND/2016. THEREFORE, THE DECISION WITH REGARDS GROUND NO. 2 OF THE APPEAL HAS BEEN DISCUSSED IN PARA 11 & 12 OF THE CONSOLIDATED ORDER PASSED. 5. SINCE THE 2 ND GROUND OF APPEAL WAS COMMON FOR THE APPEALS OF THE OTHER YEARS I .E. A.Y.2011 - 12 & 2012 - 13 FOR WHICH A CONSOLIDATED ORDER HAD BEEN PASSED THE ADJUDICATION OF THE 2 ND GROUND OF APPEAL HAS BEEN MADE IN PARA 11 & 12 OF THE ORDER PASSED BY THE HONORABLE TRIBUNAL. THE HONORABLE TRIBUNAL, IN PARA 12 OF THE ORDER, HAS RENDERED THE FINDINGS WHICH ARE REPRODUCED AS UNDER: 'WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. IT IS NOTICED THAT ALL THE THREE EMPLOYEES WHOSE STATEMENTS WERE RECORDED HAD ADMITTED THAT THEY WERE WORKING FOR THE ASSESSEE C OMPANY. THE ASSESSING OFFICE HAS NOT DISPROVED THAT THE STAFF MEMBERS AND EMPLOYEES WERE NOT EMPLOYED AND NOT RENDERED SERVICES TO THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS SUBMITTED THE SUPPORTING DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS CLAIMING THAT THE STAFF EMPLOYEES HAVE RENDERED SERVICES ON ACCOUNT OF WHICH IT HAS EARNED INCOME FROM OTHER SOURCES. LOOKING TO THE ABOVE FATS AND CIRCUMSTANCES WE OBSERVE THAT THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE ONL Y ON ESTIMATED BASIS WITHOUT DISPROVING THE CLAIM OF THE ASSESSEE THAT EMPLOYEES AND STAFF HAVE RENDERED SERVICES DURING THE YEAR UNDER CONSIDERATION. HOWEVER, WE CONSIDER THAT EMPLOYEES HAVE ALSO RENDERED SERVICES O THE OTHER GROUP CONCERNS OF THE ASSESSE E, THEREFORE, WE ARE OF THE VIEW THAT DISALLOWANCE UNDER THE HEAD PAYMENT FOR EMPLOYEES PROVISION TO THE EXTENT OF 50% WILL BE THE REASONABLE. THEREFORE, WE RESTRICT THE DISALLOWANCE TO THE EXTENT OF RS.50% I.E. OF RS.26,90,440/ - UNDER THE HEAD PAYMENT ON PROVISION OF EMPLOYEES AND ALLOW THE CLAIM TO THE EXTENT OF RS.13,45,220/ - . IN THE RESULT, THE APPEAL OF THE ASSESSEE ON THIS ISSUE IS PARTLY ALLOWED.' 6. GROUND NO. 1 HAS COME TO BE DISMISSED BY THE HON. IT AT WHILE RENDERING THE FINDING IN PARA 14 & 15 O F THE ORDER. 7. IN PARA 16, IT HAS BEEN MENTIONED THAT THE APPEAL OF THE ASSESSEE HAS COME TO BE DISMISSED WHICH IN FACT HAS BEEN PARTLY ALLOWED. THE WRONG MENTIONING OF THE APPEAL BEING DISMISSED INSTEAD OF HAVING BEEN PARTLY ALLOWED IS A MISTAKE APPARENT FROM RECORD WHICH REQUIRES RECTIFICATION. 8. THE APPELLANT, THEREFORE, PRAYS THAT THIS MISTAKE BEING APPARENT FROM THE RECORD, MAY PLEASE BE RECTIFIED. 2. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS NOTICED THAT LAST GROUND NO. 3 OF APPEAL OF THE ASSESSEE PERTAINING TO DISALLOWANCE OUT OF PAYMENT AND PROVISIONS TO EMPLOYEES WAS M.A. NO. 15 1/AHD/2019 ( I.T.A NO. 35 37 /AHD/20 16) A.Y. 2013 - 14 PAGE NO BABUL PRODUCTS PVT. LTD. VS. A CIT (OSD) 3 PARTLY ALLOWED. THEREFORE, THE PARA NO. 16 OF THE IMPUGNED ORDER OF THE ITAT REGARDING THIRD (LAST) GROUND OF APPEAL ON THE ISSUE OF DISALLOWA NCE OUT OF PAYMENT AND PROVISIONS TO EMPLOYEES BE READ AS PARTLY ALLOWED. THEREFORE, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS ALLOWED SUBJECT TO THE TERMS AS ABOVE. 3. IN THE RESULT THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWE D SUBJECT TO ABOVE TERMS. ORDER PR ONOUNCED IN THE OPEN C OURT ON 2 0 - 01 - 20 20 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 20 /01/2020 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,