Shri Fazal Valimohmad, Vapi v. The Income tax Officer, Ward-1,, Vapi

ITA 1191/AHD/2007 | 2002-2003
Pronouncement Date: 16-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 119120514 RSA 2007
Assessee PAN ADWPP2709E
Bench Ahmedabad
Appeal Number ITA 1191/AHD/2007
Duration Of Justice 3 year(s) 3 month(s) 28 day(s)
Appellant Shri Fazal Valimohmad, Vapi
Respondent The Income tax Officer, Ward-1,, Vapi
Appeal Type Income Tax Appeal
Pronouncement Date 16-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 16-07-2010
Date Of Final Hearing 07-07-2010
Next Hearing Date 07-07-2010
Assessment Year 2002-2003
Appeal Filed On 19-03-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. N. PAHUJA AM) ITA NO.1191/AHD/2007 A. Y.: 2002-03 SHRI FAZAL VALIMOHMAD ZANDA CHAWK MAIN BAZAR VAPI VS THE INCOME TAX OFFICER WARD -1 OPP. JAYSHREE TALKIES AJITNAGAR CHALA VAPI 396 191 PA NO. ADWPP 2709 E (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R. N. VEPARI AR RESPONDENT BY SHRI K. M. MAHESH DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) VALSAD DATED 29-11 -2006 FOR ASSESSMENT YEAR 2002-03. 2. WE HAVE HEARD LEARNED REPRESENTATIVES OF BOTH THE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL ON RECORD POINTED OUT BY THE PARTIES. 3. ON GROUNDS NO.1 AND 2 THE ASSESSEE CHALLENGED RE JECTION OF BOOKS OF ACCOUNTS AND ADDITION OF RS.4 85 520/- FOR PHOTO DEVELOPING. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVE D THAT THE ASSESSEE HAS NO OPENING STOCK OF ANY ITEMS. THE ASSESSEE IS PROPRIETOR OF NAAZ STUDIO AND COLOUR LAB. HIS FIRST PURCHASE OF FILM H AS BEEN SHOWN ON 02-04-2001 WHEREAS FIRST PURCHASE OF FILM ROLL WAS MADE ON 02-04-2001 PURCHASE OF CAMERA WAS MADE ON 11-04-2001 AND PAPER ROLL WAS PURCHASED ON 04-04-2001. IN THE MEANTIME ASSESSEE S PHOTOGRAPHIC RECEIPTS WERE CONTINUOUS WHICH SHOWS THAT THE ASSES SEE HAS MADE SOME OUT OF BOOK PURCHASES OF ROLLS AND PAPERS. THE BOOK S WERE NOT FOUND TO BE RELIABLE. THE ASSESSEE SUBMITTED THAT HE GENERAL LY LOADS FULL PAPER ROLL ITA NO.1191/AHD/2007 SHRI FAZAL VALIMOHMAD VS ITO -1 VAPI 2 OF IN PHOTO DEVELOPING MACHINE AND THE SAME IS USED UP TO COMPLETION OF THE PAPER AND HENCE HE USED THE PAPER LOADED ON 31- 03-2000. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED. BOOKS OF ACCOUNT WERE REJECTED AND TOTAL INCOME OF THE ASSESSEE WAS ESTIM ATED. THE AO NOTED THAT THE ASSESSEE HAS CONSUMED 278 PAPER ROLLS FOR DEVELOPING OF FILM ROLLS AND AS PER ASSESSEES OWN ADMISSION 1680 PRIN TS OF 4 X 6 CAN BE OBTAINED. THE AO THEREFORE PRESUMED THAT THE ASSES SEE DEVELOPED AT LEAST 4 67 040 COPIES OF PHOTOGRAPHS AND IF MINIMUM OF RS.5.5 IS TAKEN THEN GROSS RECEIPTS SHOULD BE RS.25 68 720/- WHEREA S THE ASSESSEE HAS SHOWN GROSS RECEIPTS OF RS.20 83 200/- FROM PHOTO D EVELOPING. ADDITION OF RS.4 85 520/- WAS ACCORDINGLY MADE. BEFORE THE L EARNED CIT(A) IT WAS SUBMITTED THAT THE ADDITION IS MADE ON PRESUMPTION AND IN THIS LINE OF BUSINESS IT IS VERY COMMON THAT OUT PUT OF ALL GOO D COPIES CANNOT NECESSARILY BE OBTAINED FROM THE PAPER ROLL AND THE Y ARE LOST FOR WHICH NO DEVELOPING CHARGES ARE RECEIVED. IT WAS SUBMITTED T HAT THE ADDITION ON ESTIMATE IS NOT JUSTIFIED. THE LEARNED CIT(A) HOWEV ER CONFIRMED THE ADDITION AND DISMISSED THE APPEAL OF THE ASSESSEE. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT THE ADDITION IS CLEARLY UNJUSTIFIED. THE ASSESSEE I S DOING BUSINESS OF PHOTO STUDIO AND COLOUR LAB. THE ASSESSEE SUBMITTED THAT GENERALLY HE LOADS ONE FULL PAPER ROLL IN PHOTO DEVELOPING MACHI NE AND THE SAME IS USED UP TO COMPLETION OF THE PAPER. IN SUCH AN EVEN T SOME PAPER COULD REMAIN IN THE PHOTO DEVELOPING MACHINE. THE AO NOTE D THAT PURCHASE OF FILM WAS MADE ON 02-04-2001 AND PURCHASE OF FILM RO LL WAS ALSO SHOWN ON THE SAME DATE AND PAPER ROLL WAS PURCHASED ON 04 -04-2001. THESE DATES ARE VERY NEAR TO THE STARTING OF THE FINANCIA L YEAR 01-04-2001. SINCE SOME OF THE ROLLS ON THE BEGINNING OF THE YEAR REMA INED IN THE PHOTO DEVELOPING MACHINE THEREFORE SUCH ITEMS COULD HAV E BEEN USED BY THE ASSESSEE FOR BUSINESS. EVEN IF IT MAY BE BELIEVED THAT THE ASSESSEE HAS NOT SHOWN ANY OPENING STOCK OF THESE ITEMS BUT THE AO HAS NOT BROUGHT ITA NO.1191/AHD/2007 SHRI FAZAL VALIMOHMAD VS ITO -1 VAPI 3 ANYTHING ON RECORD TO SHOW WHETHER THE RECEIPTS REC EIVED BY THE ASSESSEE WERE IN RESPECT OF THE EARLIER PHOTOGRAPHS OR PHOTO GRAPHS OF THE CURRENT YEAR. IT IS ALWAYS NOT NECESSARY THAT THE CUSTOMERS WOULD TAKE PHOTOGRAPH ON THE SAME DAY OR THE NEXT DAY BUT IT WOULD TAKE SOME MORE TIME FOR TAKING THE PHOTOGRAPHS FROM THE ASSES SEE. THE AO MERELY PRESUMED THAT SINCE RECEIPTS ARE CONTINUING AND FIL MS ARE PURCHASED ALONG WITH PAPER ON 02-04-2001 AND 04-04-2001 THER EFORE THE ASSESSEE SPENT UNACCOUNTED MONEY IN TERMS OF THE ROLLS. THE AO THEREAFTER INSTEAD OF MAKING SOME ADDITION FOR THREE/FOUR DAY S ESTIMATED THE PHOTOGRAPHS FOR WHOLE OF THE YEAR AND CAME TO THE C ONCLUSION THAT THE ASSESSEE HAS A DIFFERENCE IN THE RECEIPT OF A SUM O F RS.4 85 520/-. THE AO THEREFORE PRESUMED EVERYTHING FOR THE PURPOSE O F MAKING THE ADDITION WITHOUT BRINGING ANY ADEQUATE MATERIAL ON RECORD AGAINST THE ASSESSEE. IN THE ABSENCE OF ANY ADEQUATE MATERIAL ON RECORD THAT WHETHER THE ASSESSEE ACTUALLY RECEIVED THE RECEIPTS ON ACCOUNT OF DEVELOPING PHOTOGRAPHS FROM EACH AND EVERY CUSTOMER S DURING WHOLE OF THE YEAR UNDER CONSIDERATION WE ARE OF THE VIEW RE JECTION OF THE BOOKS OF ACCOUNT FOR SUCH MATTER AND RESULTANT ADDITION IS C LEARLY UNJUSTIFIED. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIE S BELOW AND DELETE THE ADDITION. AS A RESULT GROUNDS NO.1 AND 2 OF THE APP EAL OF THE ASSESSEE ARE ALLOWED. 5. ON GROUND NO.3 OF THE APPEAL THE ASSESSEE CHALL ENGED THE DISALLOWANCE OUT OF VEHICLE EXPENSES IN A SUM OF RS .49 141/- OUT OF RS.68 961/-. THE AO NOTED THAT SIX BILLS OF THE EXP ENSES WERE NOT FOUND AS NOTED IN THE ASSESSMENT ORDER. THE ASSESSEE STAT ED THAT BILLS ARE MISPLACED DURING THE TIME OF THE SHOP REPAIRING. TH E CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED AND DISALLOWANCE OF RS.49 141/- WAS MADE. THE LEARNED CIT(A) CONFIRMED THE ADDITION BECAUSE THE CLAIM WAS NOT SUBSTANTIATED THROUGH ANY VOUCHERS/BILLS. ITA NO.1191/AHD/2007 SHRI FAZAL VALIMOHMAD VS ITO -1 VAPI 4 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE AR E OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE MATTER. THE AO HAS SPECIFICALLY NOTED DATES AND AMOUNTS IN THE ASSESSMENT YEAR IN RESPECT OF WHICH VOUCHERS AND BILLS OF VEHICLE EXPENSES IN A SUM OF RS.49 141 /- HAVE NOT BEEN PRODUCED BEFORE THE AUTHORITIES BELOW. SINCE SPECIF IC FINDING IS GIVEN AGAINST THE ASSESSEE AND IN THE ABSENCE OF ANY EVID ENCE TO SUPPORT THE EXPENDITURE WE ARE OF THE VIEW THAT THE AUTHORITIE S BELOW WERE JUSTIFIED IN DISALLOWING THE SAME EXPENDITURE. AS A RESULT T HIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 7. ON GROUND NO.4 DISALLOWANCE OF REPAIR EXPENSES IN A SUM OF RS.14 400/- OUT OF RS.2 93 659/- IS CHALLENGED. THE AO SIMILARLY NOTED THAT THE BILLS OF THE EXPENSES OF RS.14 400/- WERE NOT FOUND AND PRODUCED BEFORE HIM. THE SAME SUBMISSION WAS MADE B EFORE THE AO THAT BILLS HAVE BEEN MISPLACED. HE ACCORDINGLY MADE T HE ADDITION. THE LEARNED CIT(A) CONFIRMED THE ADDITION. 8. ON CONSIDERATION OF THE ABOVE FACTS WE ARE OF T HE VIEW THAT ADDITION HAS BEEN RIGHTLY MADE BY THE AUTHORITIES B ELOW BECAUSE THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO SUPPORT GENUINENESS OF THE ABOVE EXPENDITURE. THIS GROUND IS SAME AS IS CONSID ERED ABOVE; THEREFORE FOLLOWING THE SAME REASONS FOR DECISION WE DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 9. AS A RESULT THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16-07-2010. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 16-07-2010 LAKSHMIKANT/- ITA NO.1191/AHD/2007 SHRI FAZAL VALIMOHMAD VS ITO -1 VAPI 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD