The ACIT, Circle-6,, Surat v. M/s. President Motors, Surat

ITA 3495/AHD/2007 | 2004-2005
Pronouncement Date: 21-05-2010 | Result: Dismissed

Appeal Details

RSA Number 349520514 RSA 2007
Assessee PAN AAFFP5331P
Bench Ahmedabad
Appeal Number ITA 3495/AHD/2007
Duration Of Justice 2 year(s) 9 month(s) 5 day(s)
Appellant The ACIT, Circle-6,, Surat
Respondent M/s. President Motors, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 21-05-2010
Date Of Final Hearing 17-05-2010
Next Hearing Date 17-05-2010
Assessment Year 2004-2005
Appeal Filed On 16-08-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD CAMP AT SURAT (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HONBLE SH RI D.C. AGRAWAL A.M.) I.T.A. NO. 3495/AHD./2007 ASSESSMENT YEAR : 2004-2005 ASSISTANT COMMISSIONER OF INCOME TAX -VS.- M/S . PRESIDENT MOTORS SURAT CIRCLE-6 SURAT (PAN : AAFFP 5331 P) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJEEV KASHY AP SR. D.R. RESPONDENT BY : SHRI P.M. JAGASHETH O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 08.06.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-IV SURAT RESTR ICTING THE ADDITION OF RS.7 91 643/- MADE BY THE ASSESSING OFFICER TO RS.1 66 571/- FOR THE A SSESSMENT YEAR 2004-05. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE-F IRM IS A DEALER OF SCORPIO AND MAHENDRA VEHICLES AND SPARE PARTS. FOR THE ASSESSMENT YEAR U NDER APPEAL IT FILED THE RETURN OF INCOME ON 29.06.2004 DECLARING TOTAL INCOME OF RS.10 56 904/- . THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 144 OF THE INCOME TAX ACT ON 19.12.2006 ON TOTAL INCOME OF RS.19 56 100/-. IN THIS ASSESSMENT ORDER THE ASSES SING OFFICER MADE THE ADDITION OF RS.7 91 643/- BEING 25% OF THE ENTIRE EXPENDITURE O F RS.31 66 571/-. THE REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS THAT T HE ASSESSEE HAS NOT GIVEN THE EXACT DETAILS AND ACCOUNT OF REVENUE EXPENDITURE CLAIMED AMOUNTING TO RS.31 66 571/-. ACCORDING TO THE ASSESSING OFFICER NO EVIDENCES OR DOCUMENTS IN FO RM OF THE RECEIPTS VOUCHERS CONFIRMATIONS OF THE RECIPIENTS WERE FILED. 2 ITA NO. 3495/AHD/200 7 2.1. ON APPEAL IN THE IMPUGNED ORDER THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE ADDITION TO 10% OF TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE BEING EXCLUDING THE RENT WHICH COMES TO RS.1 96 660/- OF RS.19 66 571/- . THE LD. CIT(A) FURTHER FOUND THAT THE SERVICE AND MAINTENANCE CHARGES OF RS.12 LAKHS WERE PAID BY THE ASSESSEE FOR SHOW ROOM ON WHICH RENT WAS PAID AND TDS WAS ALSO DEDUCTED. FURT HER DUE TO DAMAGE TO THE SHOW ROOM ON ACCOUNT OF FLOOD IT WOULD BE RIDICULOUS TO EXPECT THE ASSESSEE TO SAVE OR PRESENT THE BOOKS OF ACCOUNTS AND SUPPORTING EVIDENCES. 3. AGGRIEVED BY THE ORDER OF LD. CIT(A) THE REVENU E IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING BEFORE US ON BEHALF OF R EVENUE SHRI SANJEEV KASHYAP SR. D.R. APPEARED AND CONTENDED THAT THE DECISION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS NOT ACCEPTABLE IN RESTRICTING THE ADDITION OF DISAL LOWANCE OF RS.1 96 660/- AND TO ALLOW THE RENT PAID AMOUNTING TO RS.12 00 000/-. THE LD. D.R. POIN TED OUT THAT THE LD. CIT(A) CONVINCED OUT OF THE ADDITION MADE BY THE A.O. IN DISALLOWING THE EX PENDITURE STATING THAT IN THE ABSENCE OF COMPLETE DETAILS IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS OF THE CLAIM AND OTHER EXPENDITURE EXCLUDING SERVICE AND MAINTENANCE CHARGES AND THER EFORE THE DECISION OF THE LD. CIT(A) IS NOT ACCEPTABLE. THE LD. D.R. ACCORDINGLY SUBMITTED THAT THE DISALLOWANCE OF 25% OF ENTIRE REVENUE EXPENDITURE OF RS.7 91 643/- MADE BY THE ASSESSING OFFICER IS FAIR AND REASONABLE AND THEREFORE THE SAME BE RESTORED. 5. ON THE OTHER HAND SHRI P.M. JAGASHETH APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LD. COMMISSIONER OF INCOME T AX (APPEALS). THE LD. COUNSEL OF THE ASSESSEE EXPLAINED THAT THE ASSESSEE WAS A DEALER I N FOUR WHEELER VEHICLES AND A SHOW ROOM WAS IN A RENTED PREMISES IN RESPECT OF WHICH RENT AND M AINTENANCE CHARGES OF RS.12 LAKHS WERE PAID TO THE LAND OWNER BY CHEQUE AND TDS WAS ALSO DEDUCT ED AT SOURCE ON THIS PAYMENT. FURTHER DISALLOWANCE MADE OUT OF BROKERAGE EXPENSES WAS ALS O WITHOUT ANY JUSTIFICATION. THE TOTAL BROKERAGE PAID WAS RS.5 74 100/- OUT OF WHICH PAYME NT OF RS.5 63 200/- WAS MADE TO FOUR PERSONS WHOSE COPIES OF ACCOUNTS EVIDENCING SUCH P AYMENT WAS ALSO FURNISHED TO THE A.O. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE REST RICTION OF DISALLOWANCE TO 10% AFTER EXCLUDING RENT IS FAIR AND REASONABLE. THEREFORE THE VIEW TA KEN BY THE LD. CIT(A) BE UPHELD. 3 ITA NO. 3495/AHD/200 7 6. AFTER HEARING BOTH THE SIDES WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND PERUSED THE MATERIAL PLACED BEFORE US. IT IS PERTINENT TO NOTE THAT THE ASSESSEE COULD NOT PRODUCE THE VOUCHERS AND OTHER DETAILS REQUIRED BY THE ASSESSING OFFICER BECAUSE OF DAMAGE OF SHOW ROOM ON ACCOUNT OF FLOOD. DESPITE THIS THE LD . CIT(A) RESTRICTED THE DISALLOWANCE TO 10% OF THE CLAIM OF EXPENDITURE AFTER EXCLUDING THE REN T. IN OUR CONSIDERED OPINION THE VIEW TAKEN BY THE LD. CIT(A) IS FAIR AND REASONABLE AND NEEDS NO INTERFERENCE AT OUR END. WE THEREFORE DECLINE TO INTERFERE. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 21.05.2010 . SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21/ 05 /2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHMEDABAD LAHA/SR.P.S.