DCIT, Faridabad v. M/s. AVI Oil India Pvt. Ltd., Faridabad

ITA 1764/DEL/2010 | 2006-2007
Pronouncement Date: 13-01-2011 | Result: Dismissed

Appeal Details

RSA Number 176420114 RSA 2010
Assessee PAN AAACA4920A
Bench Delhi
Appeal Number ITA 1764/DEL/2010
Duration Of Justice 8 month(s) 24 day(s)
Appellant DCIT, Faridabad
Respondent M/s. AVI Oil India Pvt. Ltd., Faridabad
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 13-01-2011
Date Of Final Hearing 13-01-2011
Next Hearing Date 13-01-2011
Assessment Year 2006-2007
Appeal Filed On 19-04-2010
Judgment Text
ITA NO. 1764/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 1764/DEL/2010 A.Y. : 2006-07 DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-I BLOCK-I-B CGO COMPLEX NH-4 FARIDABAD VS. M/S AVI OIL INDIA PVT. LTD. VILL. PIYALA TEHSIL BALLABGARH FARIDABAD (PAN/GIR NO. : AAACA4920A) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. RAJESH MALHOTRA CA DEPARTMENT BY : MRS. ANUSHA KHURANA SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 25/2/2 010 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN DELETING THE ADDITION MADE ON AC COUNT OF THE FOLLOWING : (I) TRAVELLING EXPENSES `17 66 856/- (II) REPAIR AND MAINTENANCE `13 58 097/- (III) SELLING AND DISTRIBUTION EXPENSES `13 43 49 3/- (IV) SALES COMMISSION EXPENSES ` 7 53 498/- (V) MISCELLANEOUS EXPENSES ` 7 48 538/- (VI) POWER AND FUEL EXPENSES ` 5 01 014/- (VII) WAGES EXPENSES ` 4 09 955/- (VIII) LEGAL AND PROFESSIONAL CHARGES ` 3 50 48 7/- (IX) RENT EXPENSES ` 2 01 110/- ITA NO. 1764/DEL/2010 2 3. ASSESSING OFFICER IN THIS CASE NOTED THAT ASSES SEES COUNSEL APPEARED AND PRODUCED BOOKS OF ACCOUNT AND VOUCHERS WHICH WERE SEEN ON TEST CHECK BASIS AND DISCUSSION WERE HELD ON VARIOUS ISSUES. ASSESSEE COMPANY WAS DEALING IN MANUFACTURING OF AVI ATION OIL AND SYNTHETIC LUBRICANTS. AS REGARDS TRAVELLING EXPENS ES ASSESSING OFFICER OBSERVED THAT ASSESSEE WAS ASKED TIME AND AGAIN TO FURNISH THE COMPLETE DETAILS AND ORIGINAL VOUCHERS SHOWING GENUI NENESS OF CLAIM MADE BY THE ASSESSEE. HE NOTED THAT IN THE ABSEN CE OF THE DOCUMENTARY EVIDENCE HE HAD NO OPTION BUT TO LEFT DISALLOW EQUAL TO 1/4 TH OF THE TOTAL AMOUNT OF ` 7067427/-. HENCE HE DIS ALLOWED 17 67 856/-. ON SIMILAR COUNTS HE MADE DISALLOWANC E AS ABOVE WHICH WAS 1/4 TH OF THE TOTAL EXPENSES CLAIMED FOR REPAIR AND MAINTEN ANCE; 1/5 TH OF THE TOTAL EXPENSES CLAIMED FOR SELLING AND DISTR IBUTION EXPENSES; 1/10 TH FOR THE SALES COMMISSION; 1/4 TH FOR THE MISC. EXPENSES; 1/4 TH OF POWER AND FUEL EXPENSES; AND 1/4 TH OF WAGES EXPENSES; 1/4 TH OF LEGAL AND PROFESSIONAL CHARGES AND ` 201110/- FOR R ENT. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT AS PER HIS FINDING AFTER TH E VERIFICATION OF ASSESSEES SUBMISSIONS HE COMPLETELY CONCURRED WITH THE ASSESSEE THAT WHOLE ASSESSMENT WAS MADE BY THE ASSESSING OFFI CER WITHOUT APPRECIATING THE ACCEPTED PAST HISTORY OF THE CONCE RN UPTO ASSESSMENT YEAR 2005-06 AND WITHOUT APPRECIATING THE GENUINE S TATUTORY AUDIT CONDUCTED UNDER THE INDIAN COMPANIES ACT 1956 AND TAX AUDIT REPORT. HE OBSERVED THAT THE ENTIRE EXERCISE ON THE PART OF THE ASSESSING OFFICER CLEARLY EVIDENCES THE DELIBERATE NEGLECT OF THE FUNDAMENTAL REQUISITIONS OF THE STATUTORY ACTS IN H ER RASH EFFORT OF MAKING ARBITRARY AND ATROCIOUS DISALLOWANCES AS ABOV E WHICH IS NOT IN CONFORMITY WITH THE FACULTY OF GENUINENESS. HE FOUND THAT ASSESSING ITA NO. 1764/DEL/2010 3 OFFICER HAS MADE A DISALLOWANCE IN ALL THE CASE ALMO ST ON THE SAME GROUND THAT THE ASSESSEE COULD NOT FURNISH DETAILS AND ORIGINAL / COMPLETE VOUCHERS OR PRODUCED DOCUMENTARY EVIDENCE / SUPPORTING VOUCHERS FOR THE ABOVE EXPENDITURE UNDER VARIO US HEADS WHICH REMAINED UNVERIFIABLE. LD. COMMISSIONER OF INCOME TA X (APPEALS) FOUND THAT ASSESSING OFFICERS BASIS ON ALL DISA LLOWANCES IS WHOLLY SELF CONTRADICTORY SELF DEFEATING AND EVEN PERVERSE AN D PREPOSTEROUS. HE NOTED THAT THE ASSESSING OFFICER HAS OBSERVED THA T BOOKS OF ACCOUNTS AND VOUCHERS WERE PRODUCED WHICH WERE SEEN ON TEST CHECK BASIS AND DISCUSSIONS WERE HELD ON VARIOUS ISSUES. FROM THE ABOVE HE FOUND THAT ASSESSEE IS MAINTAINING THE BOOKS OF ACCOUNTS AND VOUCHERS. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) PROCEEDED TO DELETE THE ADDITION MADE IN THIS REGARD. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ENTIRE AD DITION HAS BEEN MADE ON SURMISES AND CONJECTURES AND ON ADHOC BASIS. ASSESSING OFFICER HAS PRODUCED ALL THE RELEVANT BOOKS OF A CCOUNT AND VOUCHERS. ASSESSEE HAS NOT EVEN POINTED OUT ONE INSTANCE OR O NE PARTICULAR TRANSACTION WHERE HE FOUND THE SUPPORTING MISSING. I N THIS REGARD LD. COUNSEL FURTHER REFERRED TO ITA NO. 118 1156 AND 1 176 FOR ASSESSMENT YEAR 2003-04 2004-05 AND 2005-06 IN ASSESSEES OWN CASE DECIDED BY THIS TRIBUNAL VIDE ORDER DATED 25.6.2010 WHEREIN S IMILAR DISALLOWANCES MADE BY THE ASSESSING OFFICER WHICH WAS DELETED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND THE LD. COM MISSIONER OF INCOME TAX (APPEALS)S ORDER WAS CONFIRMED BY THE T RIBUNAL. 5.1 LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND RELIED UPON THE ORDER OF THE ASSESSING OFFICER. ITA NO. 1764/DEL/2010 4 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. W E FIND THAT ALL THE ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICE R WITHOUT PIN- POINTING THE SPECIFIC ERROR OR NECESSARY MISSING VO UCHERS. THE ENTIRE EXERCISE OF DISALLOWANCE HAS BEEN MADE ON ADHOC BAS IS. THE SAME IS BASED ON SURMISES AND CONJECTURES. IT IS A SETTLED LAW THAT NO ADDITION CAN BE MADE ON SURMISES AND CONJECTURES. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GIVEN A FINDING THAT TH E ACTION OF THE ASSESSING OFFICER WAS HIGHLY ARBITRARY. MOREOVER WE FIND THAT SIMILAR DISALLOWANCES MADE BY THE ASSESSING OFFICER IN ASSE SSEES OWN CASE IN EARLIER YEARS HAD TRAVELLED TO THE TRIBUNAL AND TRIBUNAL HAD CONFIRMED THE DELETION BY THE LD. COMMISSIONER OF INCOME TAX ( APPEALS). ACCORDINGLY WE DO NOT FIND ANY INFIRMITY OR ILLEGAL ITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND HENCE WE UPHOLD THE SAME. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/01/2011 UP ON CONCLUSION OF HEARING. SD/- SD/- [R.P. TOLANI] [R.P. TOLANI] [R.P. TOLANI] [R.P. TOLANI] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 13/01/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES