Mrs. Satya Devi, Chamba v. DCIT, Palampur

ITA 1166/CHANDI/2010 | 2006-2007
Pronouncement Date: 15-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 116621514 RSA 2010
Assessee PAN ABHPB3510E
Bench Chandigarh
Appeal Number ITA 1166/CHANDI/2010
Duration Of Justice 1 year(s) 1 month(s) 21 day(s)
Appellant Mrs. Satya Devi, Chamba
Respondent DCIT, Palampur
Appeal Type Income Tax Appeal
Pronouncement Date 15-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 15-11-2011
Date Of Final Hearing 14-11-2011
Next Hearing Date 14-11-2011
Assessment Year 2006-2007
Appeal Filed On 24-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT AND SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER ITA NO. 1166/CHD/2010 ASSESSMENT YEAR: 2006-07 MRS SATYA DEVI VS THE DCIT PROP: M/S HITESH TRADERS CIRCLE PALAMPUR CHAMBA (H.P.) (H.P.) PAN NO. ABHPB3510E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 14.11.2011 DATE OF PRONOUNCEMENT : 15.11.2011 ORDER PER H.L.KARWA VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A) SHIMLA DATED 22.7.2010 RELATING TO ASSESSME NT YEAR 2006-07.. 2. GROUND NO.1 OF THE APPEAL READS AS UNDER:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS. 3 02 590/- IN RESPECT OF EXPENSE CLAIM UNDER THE HEAD REBATE & DISCOUNT WHICH IS ARBITRARY & UNJUSTIFIED. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE DERIVES INCOME FROM SALE AND PURCHASE OF CEMENT. DURING TH E ASSESSMENT YEAR 2 UNDER CONSIDERATION ON TURN OVER OF RS. 4 52 01 06 5/- THE ASSESSEE HAS DISCLOSED GROSS PROFIT OF RS. 45 90 495/-. DURING THE YEAR RECEIPTS OF RS. 18 90 776/- HAVE BEEN SHOWN AS REBATE AND DISCOUNT FROM ACC CEMENT LTD WHICH IS THE ONLY VARIETY OF CEMENT IN WHICH TH E ASSESSEE DEALS. IN THE PROFIT AND LOSS ACCOUNT THE ASSESSEE HAS DEBIT ED VARIOUS EXPENSES SUCH AS SPECIAL SCHEME REBATE AMOUNTING TO RS. 3 02 590/- LABOUR CHARGES OF RS. 3 86 690/- ETC. THE ASSESSING OFFI CER REQUIRED THE ASSESSEE TO JUSTIFY THE EXPENSES DEBITED AS SCHEME REBATE. ACCORDING TO THE ASSESSING OFFICER THE EXPENSES WERE CLAIMED IN THE SHAPE OF REBATE AND DISCOUNT BUT ITS NATURE WAS NOT EXPLAINED BY TH E ASSESSEE. REGARDING THE SPECIAL SCHEME REBATE THE ASSESSEE WAS REQUIRE D TO EXPLAIN THE NATURE OF THE CORRESPONDENCE AVAILABLE IN POSSESSIO N FROM THE CONCERNED COMPANY. IT WAS ALSO ENQUIRED HOW THE REBATE WAS AL LOWABLE. MEANWHILE THE ASSESSING OFFICER OBTAINED INFORMATION U/S 133( 6) FROM MS ACC LTD CHANDIGARH REGARDING THE SPECIAL SCHEME REBATE. THE ASSESSING OFFICER OPINED THAT WHATEVER THE SUBMISSIONS MADE BY THE AS SESSEE WAS NOT SUBSTANTIATED BY ANY DOCUMENTS / CORRESPONDENCE MAD E DIRECTLY BY M/S ACC CEMENT LTD. CONTRARY TO IT M/S ACC CEMENT LTD HAS CLEARLY GIVEN IN WRITING THAT THEY HAD NOT LAUNCHED ANY SUCH SCHE ME. THE ASSESSING OFFICER NOTIECED THAT THE SUM OF RS. 3 02 590/- REP RESENT THE INCOME OF THE ASSESSEE ON ACCOUNT OF SPECIAL DISCOUNT FOR THE PERIOD RELEVANT TO ASSESSMENT YEAR 2005-06 (FINANCIAL YEAR 2004-05) WH ICH WAS PAID TO THE ASSESSEE IN APRIL 2006 PERTAINING TO ASSESSMENT YE AR 2007-08. THE ASSESSING OFFICER ALSO TOOK THE VIEW THAT AS TO HOW THE INCOME OF AN EARLIER YEAR COULD BE CLAIMED AS EXPENSES IN A LATE R YEAR. HE THEREFORE REJECTED THE CLAIM OF THE ASSESSEE REGARDING THE SP ECIAL SCHEME REBATE EXPENSES MADE AT RS. 3 02 590/-. 3 4. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) VIDE PARA 6 AND 6.1 OF THE IMPUGNED ORDER CONFIRMED THE ADDITION AN D HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI TEJ MOHAN SING H LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS RECEIVED V ARIOUS TYPES OF REBATES / DISCOUNTS FROM ITS PRINCIPLES M/S ACC CEMENT LTD. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS RECEIVED A CHE QUE ON ACCOUNT OF REBATE AND DISCOUNT FOR AN AMOUNT OF RS. 3 02 590/- WHICH WAS AMOUNT DULY CREDITED IN THE BOOKS OF THE ASSESSEE ON 31.3. 2006. SINCE THE CHEQUE WAS NOT ENCASHED DURING THE YEAR REVERSE ENTRY FOR THE SAME AMOUNT OF RS. 3 02 590/- WAS MADE IN THE BOOKS ON THE SAME DA Y. THE COPY OF THE ACCOUNT IS AVAILABLE AT PAGES 29 TO 31 OF THE PAPER BOOK. ACCORDING TO SHRI TEJ MOHAN SINGH LD. COUNSEL FOR THE ASSESSEE THE AMOUNT IN QUESTION WAS RECEIVED IN THE SUBSEQUENT YEAR AND WA S SHOWN IN THE BOOKS OF ACCOUNT AS RECEIPTS IN THE ASSESSMENT YEAR 2007- 08. THE COPY OF THE ACCOUNT IN THIS RECEIPT IS AVAILABLE AT PAGES 32 & 33 OF THE PAPER BOOK. AT PAGE 4 OF THE ASSESSMENT ORDER THE ASSESSING OF FICER HAS REPRODUCED THE FAX RECEIVED FROM M/S ACC CEMENT LTD AT CHANDIG ARH WHICH READS AS UNDER:- THIS IS TO INFORM YOU THAT A SUM OF RS. 3 02 590/- WAS CREDITED IN THE ACCOUNT OF THE ABOVE SAID PARTY VID E CREDIT NOTE NO. 649 DATED 20.4.2006 ON ACCOUNT OF SPECIAL DISCOUNT FOR THE YEAR 2004-05. THE DISCOUNT IS PAID IN APRIL 2006 AND NO SUCH DISCOUNT IS PAID DURING FINANCIAL YEAR 2004-05 FOR THE AMOUNT. 4 6. FROM THE LANGUAGE OF THIS FAX IT IS CLEAR THAT THE ASSESSEE HAS RECEIVED A SPECIAL DISCOUNT FOR FINANCIAL YEAR 2004 -05 WHICH WAS CREDITED ONLY ON 20.4.2006 VIDE CREDIT NOTE NO. 649. IN OUR VIEW THE STAND OF THE ASSESSEE IS CORRECT THAT THE REBATE AND DISCOUNT DI D NOT PERTAIN TO THE YEAR UNDER CONSIDERATION AND WAS IN RESPECT OF FINANCIAL YEAR 2004-05 PAID BY THE PRINCIPLES ONLY IN APRIL 2006. THE SAID AMOUN T WAS RECEIVED IN THE SUBSEQUENT YEAR WAS DULY DECLARED IN THE BOOKS OF A CCOUNT AS RECEIPT IN ASSESSMENT YEAR 2007-08. THIS FACT IS CLEAR FROM T HE COPY OF ACCOUNT AS AVAILABLE AT PAGES 32 & 33 OF THE PAPER BOOK. SHRI TEJ MOHAN SINGH LD. COUNSEL FOR THE ASSESSEE STATED AT BAR THAT THE AMO UNT IN QUESTION HAS BEEN SHOWN AS INCOME IN THE ASSESSMENT YEAR 2007-08 AND WAS DULY OFFERED FOR TAX. CONSIDERING THE ENTIRE FACTS AND C IRCUMSTANCES OF THE PRESENT CASE WE ARE OF THE VIEW THAT THERE WAS NO JUSTIFICATION IN MAKING THE ADDITION OF RS. 3 02 590/- IN THE YEAR UNDER CO NSIDERATION. ACCORDINGLY WE DELETE THE ADDITION. 7. GROUND NO.1 OF THE APPEAL STANDS ALLOWED. 8. GROUND NO.2 OF THE APPEAL READS AS UNDER:- 2. THAT THE LD. CIT(A) HAS FURTHER ERRED IN SUSTAINING THE ADHOC ADDITION OF RS. 1 00 000/- UNDER THE HEAD VE HICLE HIRE EXPENSES WHICH IS ARBITRARY & UNJUSTIFIED. 9. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE CLAIMED RS. 35 78 938/- UNDER THE HEAD VEHICLE HI RE EXPENSES. IN THIS REGARD THE ASSESSEE SUBMITTED THAT IT HAS TO INCUR EXPENDITURE ON LABOUR PAYMENT TOLL REPAIR AND OTHER PETTY EXPENSES FOR EVERY TRIP UNDERTAKEN BY THE TRUCK. IT WAS ALSO CLAIMED BY THE ASSESSEE BEF ORE THE ASSESSING OFFICER THAT THE VOUCHERS WERE BEING PREPARED ON DA ILY BASIS BY THE TRUCK 5 DRIVERS. HOWEVER THE ASSESSING OFFICER DID NOT AC CEPT THE ABOVE EXPLANATION OF THE ASSESSEE STATING THAT THE PERUSA L OF THE VOUCHERS SHOWED THAT ALL THE VOUCHERS WERE SELF PREPARED AND INTERNALLY MAINTAINED. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF T HE CASE THE ASSESSING OFFICER DISALLOWED RS. 2 LACS UNDER THE ABOVE HEAD. 10. ON APPEAL THE CIT(A) SUSTAINED THE ADDITION OF RS. 1 LAC FOR THE REASONS STATED IN PARA 10 OF THE IMPUGNED ORDER. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI TEJ MOHAN SIN GH LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS MAINTAINING DULY AUDITED BOOKS OF ACCOUNT. ALL THE EXPENSES CLAIMED ARE DULY VOUCHED ACCOMPANIED BY BILLS. ACCORDING TO SHRI TEJ MOHAN SINGH LD. COUNSEL FOR THE ASSESSEE THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DISCREPAN CY IN THE MAINTENANCE OF ACCOUNTS NOR HAS HE STATED THAT AS TO WHICH EXPE NDITURE IS EXCESSIVE IN NATURE. IN OUR VIEW THE ASSESSING OFFICER HAS MA DE ADHOC DISALLOWANCE WITHOUT POINTING OUT ANY SPECIFIC DEFECT IN THE BOO KS OF ACCOUNT REGULARLY MAINTAINED BY THE ASSESSEE. SHRI TEJ MOHAN SINGH LD. COUNSEL FOR THE ASSESSEE ALTERNATIVELY SUBMITTED THAT THE ADDITION SUSTAINED BY THE CIT(A) IS ON HIGHER SIDE PARTICULARLY WHEN THE LD. CIT(A) HAS OBSERVED THAT ASSESSING OFFICER HAS MADE ADHOC DISALLOWANCE WITHO UT POINTING OUT ANY DISCREPANCIES IN THE BOOKS OF ACCOUNT. SHRI TEJ MO HAN SINGH LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITIO N SUSTAINED BY THE CIT(A) MAY BE REDUCED. CONSIDERING THE ENTIRE FACT S AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THE ADDITION OF RS. 50 000/- IN THIS CASE WILL MEET THE ENDS OF JUSTICE. WE THEREFORE REDUCE THE ADDITION TO 6 RS. 50 000/-. THUS THE ASSESSEE GETS A FURTHER RE LIEF OF RS. 50 000/-. THIS GROUND OF APPEAL IS ALLOWED PARTLY. 12. IN THE RESULT APPEAL IS ALLOWED PARTLY AS INDI CATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF NOVEMBER 2011. SD/- SD/- (D.K.SRIVASTAVA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 15 TH NOVEMBER 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR