Md. Kutubuddin, Howrah v. ITO, Ward - 46(2), Kolkata, Kolkata

ITA 406/KOL/2010 | 2006-2007
Pronouncement Date: 23-04-2010

Appeal Details

RSA Number 40623514 RSA 2010
Assessee PAN ALDPK6818J
Bench Kolkata
Appeal Number ITA 406/KOL/2010
Duration Of Justice 1 month(s) 29 day(s)
Appellant Md. Kutubuddin, Howrah
Respondent ITO, Ward - 46(2), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 23-04-2010
Appeal Filed By Assessee
Bench Allotted B
Tribunal Order Date 23-04-2010
Assessment Year 2006-2007
Appeal Filed On 24-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH - B KOLKATA ( ) BEFORE . . SHRI B.R.MITTAL JUDICIAL MEMBER. /AND . . SHRI B.C.MEENA ACCOUNTAN T MEMBER. /ITA NO. 406/KOL/2010 / ASSESSMENT YEAR 2006 - 07 MD. KUTUBUDDIN VILL: RAJKHOLA P.O.KANTABERIA P.S.ULUBERIA HOWERAH 711 001. ALDPK 6818 J - - - VERSUS - . INCOME - TAX OFFICER WARD 46(2) KOLKATA. ( / A PPELL ANT ) ( / RESPONDENT ) / FOR THE APPELLANT: / SHRI SUBASH AGARWAL AR / FOR THE RESPONDENT : / SHRI PIYUSH KOLHE DR / ORDER . . SHRI B.R.MITTAL JUDICIAL MEMBER. T HE ASSESSEE HAS FILED THIS APPEAL FOR THE ASSESSMENT YEAR 2006 - 07 AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT.7.1.2010 ON THE FOLLOWING GROUNDS. 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS NO T JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY THE A.O. IN RESPECT OF LABOUR CHARGES PAYMENT FOR EMBROIDERY WORK AND WAGES TOTALING TO RS.7 53 200 TREATING THE SAME AS BOGUS EXPENDITURE. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN CONFIRMING THE ESTIMATED DISALLOWANCE MADE BY THE A.O. AMOUNTING TO RS.63 607 BEING 25% OF RS.2 54 430 CLAIMED UNDER THE HEAD CONSUMABLES FOR EMBROIDERY WORK. 3. FOR THAT. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD . CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ESTIMATED DISALLOWANCES MADE BY THE A.O. TO THE TUNE OF RS.46 29 1 BEING 20% OF RS.2 3 1 455 CLAIMED UNDER THE HEADS SALARY TRAVELLING & CONVEYANCE AND STAFF WELFARE EXPENSES. 2 /ITA NO. 406/KOL/2010 4. THAT THE APPELLANT CRAVES LEA VE TO ADD ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 2. IN RESPECT OF GROUND NO.1 OF THE APPEAL WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 3. WE OBSERVE THAT THE ASSESSEE CLAIMED LABOUR ON EMBROIDERY WORK OF RS.31 92 800 AND ALSO CLAIMED WAGES OF RS.7 67 900. THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.7 53 000 ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE THREE PARTIES NAMELY EIRSAD ALAM SK. SAGAHAN AND SK.HABU TO WHOM THE ASSESSEE MADE PAYMENTS OF RS.2 30 650 (DURING THE COURSE OF HEARING THE LEARNED AR OF THE ASSESSEE REFERRED TO PAGE 37 OF THE PAPER BOOK AND SUBMITTED THAT THE PAYMENT MADE WAS RS.1 93 600 AND WRONGLY MENTIONED BY THE AUTHORITIES BELOW OF RS.2 30 650) RS .2 02 100 AND RS.2 83 400 RESPECTIVELY AND T HE ASSESSING OFFICER FURTHER STATED THAT THE ASSESSEE CLAIMED TO HAVE PAID RS.37 050 IN RESPECT OF WAGES TO SHRI SATHI BUT THE ASSESSEE FAILED TO PRODUCE THE PART Y. THEREFORE THE ASSESSING OFFICER MADE A DISALLOWANCE OF THE TOTAL AGGREGATE AMOUNTING TO RS.7 53 200. THE LEARNED CIT(A) HAS ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. THE LEARNED CIT(A) HAS ALSO STATED THAT THE EXPENDITURE TOWARDS LABOUR CHARG ES AND WAGES WAS OF 77.8% IN THE ASSESSMENT YEAR UNDER CONSIDERATION AS AGAINST 64.7% OF THE TURNOVER IN THE PRECEDING YEAR. HENCE THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. DURING THE COURSE OF HEARING THE LEARNED AR OF THE ASSESSEE SUBMI TTED THAT THE ABOVE DISALLOWANCE IS NOT JUSTIFIED AS THE ASSESSEE FURNISHED THE FULL DETAILS OF THE PARTIES TO WHOM THE LABOUR CHARGES FOR EMBROIDERY WORK AND THE WAGES WERE PAID. HE REFERRED TO PAGES 37 AND 38 OF THE PB. THE LEARNED DR SUPPORTED THE ACTIO N OF AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW AND THE DETAILS OF PAYMENTS AS STATED AT PAGES 37 AND 38 OF THE PB. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE CONSIDERED VIEW THAT THE DISALLOWANCE O F THE PAYMENTS MADE TO THE ABOVE PARTIES IS NOT JUSTIFIED MERELY BECAUSE THE ASSESSEE COULD NOT PRODUCE THE PARTIES BEFORE THE ASSESSING OFFICER. HOWEVER THE ASSESSEE HAS FAILED TO PRODUCE THE FULL DETAILS TO JUSTIFY THE ABOVE EXPENSES. WE ARE 3 /ITA NO. 406/KOL/2010 OF THE CONS IDERED VIEW THAT IT WILL BE REASONABLE TO RESTRICT THE DISALLOWANCE TO RS.4 50 000. HENCE GROUND NO.1 OF THE APPEAL TAKEN BY THE ASSESSEE IS ALLOWED IN PART BY RESTRICTING THE DISALLOWANCE TO RS. 4 50 000 AS AGAINST RS.7 53 200 SUSTAINED BY THE LEARNED CIT (A). 6. IN GROUNDS NO.2 AND 3 THE ASSESSEE HAS DISPUTED THE DISALLOWANCE OF RS.63 607 WHICH IS 25% OF RS.2 54 430 CLAIMED UNDER THE HEAD CONSUMABLES FOR EMBROIDERY WORK AND RS.46 291 BEING 20% OF RS.2 31 455 CLAIMED UNDER THE HEADS SALARY TRAVELLING & C ONVEYANCE AND STAFF WELFARE EXPENSES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE OBSERVE THAT THE DISALLOWANCES UNDER THE ABOVE HEADS HAVE BEEN MADE ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE SATISFACTORY E VIDENCE IN SUPPORT OF THESE EXPENSES. THE LEARNED AR OF THE ASSESSEE DID NOT DISPUTE THE ABOVE FACTS RECORDED BY THE AUTHORITIES BELOW. HOWEVER HE CONTENDED THAT THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) IS EXCE SSIVE. WE FIND THAT THE AUTHORITIES BELOW HAVE MADE THESE DISALLOWANCES ON AD HOC BASIS WHICH IN OUR VIEW IS EXCESSIVE AS RIGHTLY CONTENDED BY THE LEARNED AR OF THE ASSESSEE. THEREFORE IT WILL BE REASONABLE AND FAIR TO RESTRICT THE DISALL OW ANCE TO 10% OF THE ABOVE EXPENSES WHICH COMES TO RS.25 443 (I.E 10% OF RS.2 54 430) OUT OF THE CLAIM OF CONSUMABLES FOR EMBROIDERY WORK AND RS.23 146 (I.E. 10% OF RS.2 31 455) OUT OF THE CLAIM UNDER THE HEAD SALARY TRAVELLING & CONVEYANCE AND STAFF WELFARE EXPENSES . HENCE GROUNDS NO.2 AND 3 ARE ALLOWED IN PART AS INDICATED ABOVE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 23.04.2010 SD/ - SD/ - ( . . ) (B.C.MEENA) ACCOUNTANT MEMBER. ( . . ) B.R.MITTAL JUDICIAL MEMBER ( ) DATE: 23.04.2010 ( /H.K.PADHEE) / SNR.PRIVATE SECRETARY. 4 /ITA NO. 406/KOL/2010 - COPY OF THE ORDER FORWARDED TO: 1. / THE APPELLANT : MD. KUTUBUDDIN VILL: RAJKHOLA P.O.KANTABERIA P.S.ULUBERIA HOWERAH 711 001. 2 / THE RESPONDENT : INCOME - TAX OFFICER WARD 46(2) KOLKATA 3. / THE CIT 4. ( ) / THE CIT(A) 5. / DR KOLKATA BENCHES KOLKATA 6. GUARD FILE . / TRUE COPY / BY ORDER / DEPUTY REGISTRAR .