Sh. Mohinder Singh, Ambala Cantt. V. JCIT, Ambala

MA 64/CHANDI/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7685 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-02-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-01-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 12-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER MA NO. 64/CHD/2011 IN ITA NO. 492/CHD/2011 ASSESSMENT YEAR: 2008-09 SHRI MOHINDER SINGH, V JCIT, S/O LATE SHRI DARSHAN SINGH, AMBALA. 65, GOBIND NAGAR, AMBALA CANTT. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISHAN RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 13.01.2012 DATE OF PRONOUNCEMENT : 22.2.2012 ORDER PER MEHAR SINGH, AM THE PRESENT MISCELLANEOUS APPLICATION DATED 10.11.2011 FILED BY THE ASSESSEE, ARISES FROM THE O RDER PASSED ON 24.08.2011 BY THE BENCH IN APPEAL BEARING ITA NO. 492/CHD/2011 FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE IN THE IMPUGNED MA POINTED OUT SINGLE MIST AKE APPARENT FROM THE RECORD, IN RESPECT OF THE ORDER O F THE TRIBUNAL. 2. LD. 'AR' CONTENDED THAT WHILE PASSING THE IMPUGN ED APPELLATE ORDER, THE HON'BLE TRIBUNAL DID NOT DISCU SS THE DECISION OF THE ITAT DELHI TRIBUNAL RELIED UPON BY THE ASSESSEE IN ACIT V M/S PRESCO MEC AUTOCOMP PVT. LTD ., TO 2 SUPPORT HIS CLAIM OF ALLOWABILITY OF LOADING/UNLOAD ING EXPENSES. 3. THE BRIEF AND UNDISPUTED FACTS OF THE CASE ARE T HAT THE AO, WHILE PASSING THE ASSESSMENT ORDER U/S 143(3) O F THE INCOME-TAX ACT,1961 (IN SHORT 'THE ACT'), FOR THE A SSESSMENT YEAR 2008-09 WAS OF THE VIEW THAT THE ASSESSEE HAD DEBITED IN THE PROFIT & LOSS ACCOUNT, HEAVY EXPENSES OF RS.37,75,618/-, ON ACCOUNT OF LOADING AND UNLOADING CHARGES. ON A SPECIFIC QUERY BY THE AO, TO JUSTIFY SUCH CLAIM OF EXPENSES, THE ASSESSEE SUBMITTED THAT THE EXPENSES WERE INCURRED, ON LOADING THE TRUCKS BY SENDING THE SAME, TO DIFFERENT STATIONS, ON THE REQUEST OF THE ASSESS EE. THE AO RECORDED A FINDING THAT SUCH EXPENSES WERE PAID TO LABOUR, IN CASH AND ADDED TO THE BILL/PURCHASE OF COKE AND, HENCE, SUCH EVIDENCE IN RESPECT OF THE SAID EXPENSES, WAS NOT VERIFIABLE. THE AO, FURTHER, RECORDED A FINDING, I N RESPECT OF LOADING AND UNLOADING CHARGES THAT NO VOUCHERS WERE MAINTAINED AND MOSTLY PAYMENTS WERE MADE IN CASH. THE AO, FURTHER, OBSERVED THAT AS PER THE THREE BILLS P RODUCED BEFORE HIM, PER MT LOADING/UNLOADING CHARGES RANGES FROM RS.29.10, TO RS.75.63, AND, CONSEQUENTLY, THE RELIA BILITY OF SUCH RATES ARE IN DEEP DOUBT. THE AO, ACCORDINGLY, DISALLOWED 50% OF EXPENSES, CLAIMED BY THE ASSESSEE AT RS.18,87,809/-, ON THE GROUND THAT THE SAID EXPENSE S WERE INCURRED IN CASH AND NON-MAINTENANCE OF VOUCHERS OR NOT SUPPORTED BY PROPER VOUCHERS AND, HENCE, NOT RELIAB LE. 3 4. THE LD. CIT(A), IN PARA 3.6 OF HER ORDER, DATED 25.02.2011, RECORDED CLEAR FINDINGS THAT THE ASSESS EE HAD ACCEPTED THAT THE NATURE OF EXPENSES IS SUCH THAT N O BILLS CAN BE MAINTAINED AND THAT THE SIGNATURES OF LABOUR ARE OBTAINED ON THE BILLS INDICATING THE AMOUNT PAID. THE LD. CIT(A), CATEGORICALLY OBSERVED THAT IT IS CLEAR THA T THE PAYMENTS WERE MADE IN CASH. SUCH EXPENSES WERE SUPPORTED BY SELF-MADE VOUCHERS PREPARED BY THE ASS ESSEE. NO BILLS ARE AVAILABLE WITH THE ASSESSEE EXCEPT THE BILLS OF THE PARTY, TO WHOM THE SUPPLY HAS BEEN MADE, AND TH EREON SUCH AMOUNT OF LOADING AND UNLOADING CHARGES ARE RE CORDED. THESE BILLS DO NOT SUPPORT THE TOTAL EXPENDITURE IN CURRED UNDER THIS HEAD. IT WAS, FURTHER, INDICATED BY THE LD. CIT(A) THAT THESE EXPENSES ARE RELATABLE TO THE SUP PLY MADE BY THE APPELLANT. HAVING REGARD TO THE FACT- SITUATION OF THE CASE, THE LD. CIT(A), RECORDED FIN DING THAT THE POSSIBILITY OF ARTIFICIAL INFLATION OF EXP ENSES UNDER THIS HEAD CANNOT BE RULED OUT. LD. CIT(A) UP HELD THE DISALLOWANCE MADE BY THE ASSESSEE IN PRINCIPLE. HOWEVER, THE LD. CIT(A) RESTRICTED THE QUANTUM OF S UCH DISALLOWANCE TO 20% OF THE TOTAL EXPENSES DEBITED T O PROFIT & LOSS ACCOUNT, AS AGAINST 50% DISALLOWANCE MADE BY THE AO. 5. THE FINDINGS OF THE BENCH, ON THE ISSUE IN QUEST ION ARE REPRODUCED HEREUNDER : 6. WE HAVE CAREFULLY PERUSED AND CONSIDERED THE RELEVANT RECORDS, RIVAL SUBMISSIONS AND THE IMPUGNE D ASSESSMENT ORDER AS WELL AS IMPUGNED APPELLATE ORDE R PASSED BY THE CIT(A). THE LD. CIT(A), HAVING DISCUS SED THE ISSUE IN DETAIL IN PARA 3.5 & 3.6 OF HIS IMPUGN ED 4 ORDER, RESTRICTED THE DISALLOWANCE OF EXPENSES INCU RRED TO 20%, AS THE POSSIBILITY OF ARTIFICIAL INFLATION OF EXPENSES CANNOT BE RULED OUT. THE AO MADE THE ADDITION ON THE BASIS OF NON-VERIFIABLE NATURE OF T HE BILLS PERTAINING TO THE EXPENSES INCURRED ON LOADIN G AND UNLOADING. THE AO RECORDED A FINDING IN PARA 3 OF T HE ASSESSMENT ORDER THAT ONLY THREE BILLS PERTAINING T O SUCH EXPENSES WERE ATTACHED BY THE ASSESSEE AS EVIDENCES TO JUSTIFY SUCH EXPENSES. THE AO WAS NOT SATISFIED WITH THE PRODUCTION OF ONLY THREE BILLS, HENCE, HE OBSERVED THAT NO VOUCHERS WERE PRODUCED AND PAYMENTS WERE MADE ONLY IN CASH. HE WAS OF THE OPINION THAT SUCH EXPENSES REMAINS UNVERIFIABLE AND ESTIMATED THE ADDITION. THE FINDINGS OF THE AO, PERTAINING TO NON-PRODUCTION AND NON-VERIFIABLE NAT URE OF SUCH EXPENSES CANNOT BE TAKEN LIGHTLY, AS THE ON US OF PROVING ADMISSIBILITY AND GENUINENESS OF SUCH EXPEN SES CLEARLY LIES ON THE ASSESSEE. HOWEVER, IN THE INTE REST OF JUSTICE, WE CONSIDER IT FAIR AND APPROPRIATE TO RES TRICT THE DISALLOWANCE TO 15% OF THE TOTAL EXPENSES DEBIT ED TO PROFIT & LOSS ACCOUNT. ACCORDINGLY, THE ASSESSEE PARTLY SUCCEEDS ON THIS GROUND. THUS, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE RELEVANT RECORD. WE FIND THAT THE BASIC FACTS OF T HE CASE, AS RECORDED BY THE TRIBUNAL, IN ITS IMPUGNED APPELLATE ORDER, HAVE NOT BEEN CONTROVERTED ON BEHALF OF THE ASSESSE E APPELLANT. THUS, HAVING REGARD TO THE RIVAL SUBMISS IONS AND RELEVANT RECORDS, AS CLEARLY INDICATED IN PARA 6 OF THE ORDER OF THE BENCH, IT WAS CONSIDERED APPROPRIATE BY THE BENCH, ON THE GROUND OF FAIRNESS AND REASONABLENESS, TO RE STRICT THE SAID DISALLOWANCE TO 15%, OF THE TOTAL EXPENSES, DE BITED TO THE PROFIT & LOSS ACCOUNT AND ACCORDINGLY, APPEAL O F THE ASSESSEE WAS PARTLY ALLOWED. 7. IN VIEW OF THE ABOVE FACTUAL BACKGROUND OF THE C ASE, THE CONTENTION OF THE ASSESSEE THAT THE DECISION OF THE HON'BLE DELHI TRIBUNAL, IN THE CASE OF ACIT V M/S P RESCO MEC AUTOCOMP PVT.LTD. WAS NOT DISCUSSED, IS NOT FAC TUALLY CORRECT, AS THE BENCH HAD ADJUDICATED THE ISSUE AFT ER 5 CAREFULLY PERUSING AND CONSIDERING THE RELEVANT REC ORDS, RIVAL SUBMISSIONS AND THE IMPUGNED ASSESSMENT AS WE LL AS THE ORDER PASSED BY THE LD. CIT(A). THE GENESIS AN D FOUNDATION OF THE DISALLOWANCE OF SUCH EXPENSES, IN THE PRESENT APPEAL IS DIRECTLY RELATABLE TO THE NON-MAI NTENANCE OF REQUISITE VOUCHERS, AS ADMITTED BY THE ASSESSEE, INCLUDING THE FACTUM OF NON-VERIFIABILITY OF SUCH EXPENSES. T HE ASSESSEE HAD FAILED TO PRODUCE DOCUMENTARY EVIDENCE , IN THE FORM OF REQUISITE BILLS DEMONSTRATING INCURRING OF SUCH EXPENSES, BEFORE THE AO, CIT(A) AND EVEN BEFORE THE BENCH. IN SUCH A FACT-SITUATION OF THE CASE, THE BENCH RED UCED THE DISALLOWANCE OF SUCH EXPENSES FROM 20% TO 15%, PURE LY TO SUBVERSE THE CAUSE OF JUSTICE AND FAIRNESS. 8. THE ISSUE IN QUESTION IS PURELY FACTS-ORIENTED A ND THE SAME HAD BEEN ADJUDICATED BY THE AO AND THE CIT(A), ON THE FOUNDATION OF EVIDENCES ADDUCED BY THE ASSESSEE , BY ALLOWING REASONABLE QUANTUM OF SUCH EXPENSES, BASED ON ESTIMATE. THE BENCH, ON APPRECIATION OF PURELY FAC T- ORIENTED ISSUE, FURTHER RESTRICTED THE DISALLOWANCE TO 15% OF THE TOTAL EXPENSES CLAIMED BY THE ASSESSEE. 9. THE EXISTENCE OF MISTAKE APPARENT FROM RECORD IN THE ORDER IS A STATUTORY CONDITION PRECEDENT TO INVOKE THE PROVISIONS OF SECTION 254(2) OF THE ACT. A MISTAKE APPARENT FROM RECORD MUST BE AN OBVIOUS AND SELF-EVIDENT MIS TAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LON G DRAWN PROCESS OF REASONING, DEBATE, AND DISCUSSION ON WHICH THERE MAY BE CONCEIVABLE TWO OPINIONS. THE 6 DEBATABLE ISSUES ARE NOT COVERED U/S 254(2) OF THE ACT. IN THE PRESENT CASE, BOTH THE AO AND THE CIT(A), MADE ESTIMATE OF DISALLOWANCE, IN THE LIGHT OF PURELY FACTUAL MAT RIX OF THE CASE, AS DISCUSSED EARLIER, ALSO BASED ON REASONABL E AND FAIR NEXUS BETWEEN THE FACTS AND EVIDENCES ADDUCED BY TH E ASSESSEE. THE BENCH, FURTHER REDUCED THE DISALLOWA NCE OF SUCH EXPENSES, BASED PURELY ON FOUNDATIONAL FACTS O F THE CASE AND EVIDENCES BROUGHT ON RECORD BY THE ASSESSE E, AND FORMED SUCH ESTIMATE OF DISALLOWANCE ON THE RATIONA L AND FAIR BASIS. IN VIEW OF THIS, THE CONTENTION OF THE ASSESSEE TO REHEAR AND RE-ADJUDICATE THE ISSUE IN QUESTION, DEC IDED PURELY ON FACTS AND MERIT OF THE CASE, IS NOT ACCEP TABLE, AS IT FALLS BEYOND THE PURVIEW OF SECTION 254(2) OF THE A CT. HENCE, THE MISCELLANEOUS APPLICATION OF THE ASSESSE E IS DISMISSED. 10. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEB.,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 ND FEB.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH