The ACIT, Circle-5,, Surat v. M/s. Utkal Viral & Co.,, Surat

ITA 2655/AHD/2009 | 2006-2007
Pronouncement Date: 28-07-2011 | Result: Dismissed

Appeal Details

RSA Number 265520514 RSA 2009
Bench Ahmedabad
Appeal Number ITA 2655/AHD/2009
Duration Of Justice 1 year(s) 10 month(s) 3 day(s)
Appellant The ACIT, Circle-5,, Surat
Respondent M/s. Utkal Viral & Co.,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 28-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-07-2011
Date Of Final Hearing 21-07-2011
Next Hearing Date 21-07-2011
Assessment Year 2006-2007
Appeal Filed On 25-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH BEFORE SHRI G.D. AGARWAL HONBLE VICE-PRESIDENT (AZ) AND SHRI D.K. TYAGI HONBLE JUDICIAL MEMBER ITA NO.2655/AHD/2009 ASSESSMENT YEAR:2006-07 DATE OF HEARING: 21.7.11 DRAFTED:25.7.11 ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE-5 ROOM NO.309 AAYAKAR BHAVAN MAJAURA GATE SURAT V/S . M/S. UTKAL VIRAL & CO. 101-106 SUPER YARN MARKET ZAMPA BAZAR SURAT PAN NO.AAAFU6178P (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SAMIR TEKRIWAL SR-DR RESPONDENT BY:- SHRI RASESH SHA AR O R D E R PER D.K. TYAGI JUDICIAL MEMBER:- THIS IS REVENUES APPEAL AGAINST THE ORDER OF COMM ISSIONER OF INCOME- TAX (APPEALS)-III SURAT DATED 20-07-2009 FOR THE A SSESSMENT ORDER 2006-07. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE TWO GROUNDS:- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A)-III SURAT HAS ERRED IN DELETING THE ADD ITION OF RS.8 40 735/- MADE ON ACCOUNT OF BOGUS PURCHASES. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A)-III SURAT HAS ERRED IN DELETING THE DIS ALLOWANCE OF RS.9 919/- ON ACCOUNT OF CARTAGE EXPENSES. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN MANUFACTURING OF TEXTURISING OF YARN AND YARN COMMI SSION AGENT. DURING THE ITA NO.2655/AHD/2009 A.Y. 2006-07 ACIT CIR-5 SRT V. M/S. UTKAL VIRAL & CO. PAGE 2 COURSE OF ASSESSMENT PROCEEDINGS NOTICE U/S 133(6) OF THE INCOME-TAX ACT 1961 WAS ISSUED BY THE ASSESSING OFFICER TO M/S. VE ER KRUPA PACKAGING FROM WHOM THE ASSESSEE HAS CLAIMED TO HAVE PURCHASED PAC KING MATERIAL OF RS.8 40 735/- WAS RETURNED UNSERVED BY THE POSTAL A UTHORITY WITH THE REMARK NO SUCH PERSON EXISTS AT THE ADDRESS GIVEN BY THE ASSESSEE. IN REPLY TO SHOW-CAUSE NOTICE ISSUED BY ASSESSING OFFICER IT WA S STATED BY ASSESSEE THAT SAID PAYMENT WAS MADE BY ACCOUNT PAYEE CHEQUE. ACCO RDING TO AO MERE PAYMENT BY CHEQUE WAS NOT SUFFICIENT TO PROVE THAT THE ASSESSEE HAD GENUINELY INCURRED SUCH EXPENDITURE WHOLLY AND EXCL USIVELY FOR THE PURPOSE OF ITS BUSINESS. IN THE ABSENCE OF ANY PROOF TO SHOW T HAT THE PARTY FROM WHOM THIS PACKING MATERIAL WAS CLAIMED TO HAVE BEEN PURC HASED WAS A GENUINE PERSON THE CLAIM OF THE ASSESSEE FOR DEDUCTION OF R S.8 40 735/- WAS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF TH E ASSESSEE. IT WAS ALSO NOTED BY AO THAT IN THE IMMEDIATELY PRECEDING YEAR THE SAME PARTY HAD BEEN TREATED AS BOGUS AND SIMILAR ADDITION HAD BEEN MADE IN THAT YEAR ALSO. 3. THE ASSESSEE ALSO CLAIMED CARTAGE EXPENSES OF RS .39 675/- WHICH WAS INCURRED IN CASH. IT WAS OBSERVED BY ASSESSING OFFI CER THAT ASSESSEE DID NOT MENTION PROPER BILLS FOR EACH AND EVERY EXPENDITURE DEBITED IN THIS ACCOUNT. IN VIEW OF THIS IT WAS HELD BY AO THAT ASSESSEE HAD F AILED TO DISCHARGE THE ONUS OF PROVING THAT THE EXPENSES WERE WHOLLY AND EXCLUS IVELY INCURRED FOR THE PURPOSE OF ITS BUSINESS AND 25% OF THE CLAIM EXPENS ES AMOUNTING TO RS.9 919/- WERE DELETED BY ASSESSING OFFICER. 4. IN APPEAL LD. CIT(APPEALS) FOUND THAT BOTH THE I SSUES WERE COVERED IN FAVOUR OF ASSESSEE BY THE ORDER OF HONBLE ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT ORDER 2005-06 IN WHICH SIMILAR DISALLOWA NCE WERE MADE OUT OF PACKING EXPENSES AND CARTAGE EXPENSES ON IDENTICAL GROUNDS (THE ONLY DIFFERENCE BEING IN THE AMOUNTS OF DISALLOWANCE). F OLLOWING THE ORDER OF ITAT HE RESTRICTED DISALLOWANCE MADE ON ACCOUNT OF PACKI NG MATERIAL TO RS.1 01 375/- BEING 5% OF THE TOTAL PACKING EXPENSE S OF RS.20 27 501/- ITA NO.2655/AHD/2009 A.Y. 2006-07 ACIT CIR-5 SRT V. M/S. UTKAL VIRAL & CO. PAGE 3 CLAIMED BY ASSESSEE AND THE DISALLOWANCE OF RS.9 91 9/- OUT OF CARTAGE EXPENSES WAS DELETED. 5. SINCE THE LD. CIT(APPEALS) HAS GIVEN RELIEF TO T HE ASSESSEE BY FOLLOWING THE HONBLE ITATS ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT ORDER 2005- 06 ON IDENTICAL GROUNDS WE FEEL NO NEED TO INTERFE RE WITH THE ORDER PASSED BY LD. CIT(APPEALS) AND THE SAME IS HEREBY UPHELD. 6. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS DAY OF 28 TH JULY 2011 SD/- SD/- ( G.D.AGARWAL ) ( D.K. TYAGI ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD DATED : 28/07/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-III SURAT 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD