INTERPORT GLOBAL LOGISTICS P. LTD, MUMBAI v. DCIT RG 5(2), MUMBAI

ITA 4856/MUM/2010 | 2006-2007
Pronouncement Date: 20-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 485619914 RSA 2010
Assessee PAN AAACI3746A
Bench Mumbai
Appeal Number ITA 4856/MUM/2010
Duration Of Justice 1 year(s) 1 month(s) 9 day(s)
Appellant INTERPORT GLOBAL LOGISTICS P. LTD, MUMBAI
Respondent DCIT RG 5(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 20-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted I
Tribunal Order Date 20-07-2011
Assessment Year 2006-2007
Appeal Filed On 11-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I MUMBAI BEFORE THE HONBLE PRESIDENT SHRI R.V.EASWAR AND SHRI T.R. SOOD (AM) I.T.A.NO. 4856/MUM/2010 ASSESSMENT YEAR: 2006-07 M/S. INTERPORT GLOBAL LOGISTICS PVT. LTD. 5 & 6 GROUND FLOOR SHRIKANT CHAMBERS SION TROMBAY RD. CHEMBUR MUMBAI 400 071. PAN: AAACI 3746 A VS. THE DY. COMMISSIONER OF INCOME-TAX RANGE-5(2) R.NO. 525 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI BRIJMOHAN POORANMAL AGARWAL RESPONDENT BY : SHRI SUNIL KUMAR SINGH O R D E R PER T.R. SOOD AM: IN THIS APPEAL THE ASSESSEE HAS RAISED THREE GROUN DS OUT OF WHICH GROUND NO.2 WAS NOT PRESSED. THEREFORE THE SAME IS DISMI SSED AS NOT PRESSED. THE OTHER GROUNDS I.E. 1 AND 3 ARE AS UNDER: 1. THE LEARNED ASSESSING OFFICER(DY.CIT) HAS ERRED IN DISALLOWING DOCK CHARGES ON ADHOC BASIS OF ` 1 00 000/- INCURRED BY THE APPELLANT COMPANY AND FURTHER THE LEARNED CIT(A)-9 HAS ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 3. THE LEARNED ASSESSING OFFICER HAS ERRED IN DISAL LOWING PRINTING & STATIONERY CHARGES ON AD HOC BASIS OF ` 50 000/- INCURRED BY THE APPELLANT COMPANY AND FURTHER THE LEARNED CIT(A)-9 HAS ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING O FFICER. GROUND NO. 1: 2. AFTER HEARING BOTH THE PARTIES WE FIND THAT DU RING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED DOCK CHARGES OF ` 13 48 339/-. IT WAS FURTHER NOTICED THAT IN THE IMM EDIATELY PRECEDING YEAR THE EXPENDITURE ON THIS HEAD WAS ONL Y ` 4.34 LACS. THE ASSESSING OFFICER OBSERVED THAT THE EXPENDITURE WAS INCREASED MORE THAN 300%. HE ALSO OBSERVED THAT MOST OF THESE EXPENSE VOUCHERS WERE S ELF-MADE VOUCHERS AND ITA NO.4856/MUM/2010 INTERPORT GLOBAL LOGISTICS P.LTD. 2 THEREFORE THE ASSESSING OFFICER ULTIMATELY DISALLO WED A SUM OF ` 1 00 000/- UNDER THIS HEAD. 3. ON APPEAL THE ACTION OF THE ASSESSING OFFICER W AS CONFIRMED BY THE LEARNED CIT(A). 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE ADDITION HAS BEEN MADE MERELY ON AD HOC BASIS WITHO UT PINPOINTING ANY DEFECT IN THE VOUCHER. HE FURTHER ARGUED THAT THESE EXPENSES ARE GENERALLY REIMBURSED BY THE CLIENTS AND ARE IN THE NATURE OF SMALL EXPENSES INCURRED BY THE EMPLOYEES WHILE GETTING THE SHIPMENTS CLEARED. MOST OF THESE EXPENSES ARE IN TERMS OF CERTAIN CHARGES. HE ALSO EMPHASIZED THAT THE TURNOV ER OF THE ASSESSEE HAS ALSO INCREASED FROM ` 27 CRORES TO ` 39.7 CRORES IN EARLIER YEARS AND EVEN THE NET PROFI T HAS INCREASED FROM ` 18.23 LAKHS TO ` 29.72 LAKHS. 5. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE SUPPORTED THE ORDER OF THE LEARNED CIT(A). 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS CAREFULL Y WE FIND THAT THE DISALLOWANCE HAS BEEN MADE PURELY ON AD HOC BASIS. ONCE THE EXPENSES ARE BEING REIMBURSED BY THE CLIENTS THEN STRICTLY SPEAKING THIS ITEM OF EXPENDITURE CANNOT BE EVEN CALLED AS EXPENDITURE AND ACCORDINGLY WE DE LETE THIS ADDITION. GROUND NO. 3 7. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE RE IS NO SUPPORT EVIDENCE IN RESPECT OF REPAIR AND MAINTENANCE EXPENSES AMOUNTIN G TO ` 5 45 642/- AND THEREFORE HE MADE A DISALLOWANCE OF ` 50 000/-. 8. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SOME TIMES A SMALL ITEM OF EXPENDITURE LIKE XEROX CHARGE S HAVE TO BE INCURRED FOR WHICH PROPER BILL CANNOT BE AVAILABLE. THIS DISALLOWANCE IS ALSO ON AD HOC BASIS AND CANNOT BE SUSTAINED UNDER THE LAW. ITA NO.4856/MUM/2010 INTERPORT GLOBAL LOGISTICS P.LTD. 3 9. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE SUPPORTED THE ORDER OF THE LEARNED CIT(A). 10. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE AGR EE WITH THE SUBMISSION OF THE LEARNED COUNSEL OF THE ASSESSEE THAT THE ADDITI ON HAS BEEN MADE ON AD HOC BASIS BUT AT THE SAME TIME NO DETAILS HAVE BEEN FIL ED BEFORE US SHOWING THE ITEMS AGAINST WHICH IT IS NOT POSSIBLE TO OBTAIN PROPER V OUCHERS. CONSIDERING THE OVERALL FACTS WE ARE OF THE VIEW THAT IF THE ADDITION IS R ESTRICTED TO ` 10 000/- THE SAME WOULD MEET THE ENDS OF JUSTICE. THEREFORE WE S ET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTRICT THE ADDITION ` 10 000/-. 11. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JULY 2011. SD. SD. (R.V. EASWAR) (T.R. SOOD) PRESIDENT ACCOUNTANT MEMBER MUMBAI DATED THE 20 TH JULY 2011. KN COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT MC-5. MUMBAI. 4. THE CIT(A)-9 MUMBAI 5. THE DR I BENCH MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR ITAT MUMBAI