M/s. Standard Agencies, Indore v. The ITO, Indore

ITA 559/IND/2009 | 2006-2007
Pronouncement Date: 10-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 55922714 RSA 2009
Bench Indore
Appeal Number ITA 559/IND/2009
Duration Of Justice 2 month(s) 1 day(s)
Appellant M/s. Standard Agencies, Indore
Respondent The ITO, Indore
Appeal Type Income Tax Appeal
Pronouncement Date 10-02-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 10-02-2010
Assessment Year 2006-2007
Appeal Filed On 09-12-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER ITA NO.559/IND/2009 A.Y. 2006-07 M/S STANDARD AGENCIES INDORE PAN AAMFS-5329-N .APPELLANT VS INCOMETAX OFFICER 1(3) INDORE .RESPONDENT APPELLANT BY SHRI KAMLESH JAIN RESPONDENT BY SMT. APARNA KARAN SR. DR O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 11.9.2009. DURING HEARING OF THIS APPEAL I HA VE HEARD SHRI KAMLESH JAIN LEARNED COUNSEL FOR THE ASSESSEE AND SMT. APARNA KA RAN LEARNED SR. DR. OUT OF 6 GROUNDS OF APPEAL THE LEARNED COUNSEL FOR THE AS SESSEE DID NOT PRESS GROUND NOS. 2 TO 4 AND 6 THEREFORE THE SAME ARE DISMISSE D AS NOT PRESSED. OUT OF GROUND NO. 1 THE ASSESSEE ALSO DID NOT PRESS THE AM OUNT OF RS.17 902/- DISALLOWED OUT OF INTEREST PAID THEREFORE THIS PA RT OF THE GROUND IS ALSO DISMISSED AS NOT PRESSED. 2. OUT OF GROUND NO. 1 THE ONLY DISPUTE REMAINS FOR THE AMOUNT OF RS.51 318/- ON ACCOUNT OF DEPRECIATION AND RUNNING EXPENSES ON TWO WHEELERS. 2 THE CONTENTION RAISED ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DISTRIB UTION OF MEDICINES TO VARIOUS CHEMISTS AND THE GOODS ARE DELIVERED BY THE ASSESSE E AT THE RESPECTIVE PLACES OF THE CLIENTS/CHEMISTS FOR WHICH THE SCOOTERS ARE USE D. IT WAS ALSO POINTED OUT THAT 13 PERSONS ARE PAID SALARY FOR DISTRIBUTING SUCH ME DICINES THEREFORE THE IMPUGNED ADDITION WAS DISPUTED. ON THE OTHER HAND THE LEARNED SENIOR DR CONTENDED THAT PROPER VOUCHERS WERE NOT MAINTAINED BY THE ASSESSEE THEREFORE THE ADDITION WAS RIGHTLY MADE. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON THE FILE. BRIEF FACTS ARE THAT THE ASSESSEE IS A WHOLESALE DISTRIBUTOR OF MEDICINES. THE ASSESSEE CLAIMED TO BE OWNING SIX S COOTER WHICH WERE CLAIMED TO BE USED BY THE STAFF OF THE ASSESSEE FOR DELIVER ING MEDICINES AT THE SHOPS OF THE CHEMISTS AS PER THEIR REQUIREMENTS/ORDER. THE ASSESSEE FIRM IS CONSISTING OF THREE PARTNERS WHO ARE HAVING CARS ALSO. THE ASSES SEE CLAIMED RS.1 02 636/- (RS. 96 000/- AS RUNNING EXPENSES AND RS. 6 636/- A S DEPRECIATION THEREON) AS RUNNING AND MAINTENANCE EXPENSES OF VEHICLES. AS P ER THE REVENUE SOME OF THE SCOOTER ARE IN THE NAME OF THE FIRM/FAMILY MEMBERS THEREFORE ALL THE SCOOTERS ARE NOT REQUIRED FOR BUSINESS PURPOSES. THE STAND O F THE LEARNED SENIOR DR IS THAT PERSONAL USE OF THE SCOOTERS/VEHICLES IS NOT R ULED OUT WHEREAS THE CLAIM OF THE ASSESSEE IS THAT THE SCOOTERS ARE USED BY THE S TAFF OF THE ASSESSEE FOR DELIVERING MEDICINES AT THE SHOPS OF CHEMISTS AS PE R THEIR ORDER. IT IS AN ADMITTED FACT THAT THE TOTAL TURNOVER OF THE ASSESSEE IS RS. 5 19 36 420/- AND IT IS A COMMON 3 PRACTICE IN THE LIKE BUSINESS THAT THE MEDICINES AR E DISTRIBUTED TO THE CHEMISTS AFTER RECEIVING TELEPHONIC ORDERS THAT TOO AT THE E ARLIER. THE LEARNED AO DISALLOWED 50% OUT OF THE CLAIMED EXPENSES WHICH WA S AFFIRMED BY THE LEARNED CIT(A). KEEPING IN VIEW THE FACTS NARRATED ABOVE ARGUMENTS PUT-FORTH BY THE LEARNED RESPECTIVE LEARNED COUNSELS NATURE OF BUSI NESS OF THE ASSESSEE AND THE TOTAL TURNOVER OF THE ASSESSEE ADMITTEDLY THE SCOO TERS ARE REQUIRED IN THE BUSINESS HOWEVER PERSONAL USE STILL CANNOT BE RUL ED THEREFORE KEEPING IN VIEW ALL THE FACTS I REDUCE THE DISALLOWANCE TO 25% IN P LACE OF 50% SUSTAINED BY THE LEARNED CIT(A) THEREFORE THIS GROUND OF THE ASSES SEE IS PARTLY ALLOWED. 4. THE LAST GROUND RAISED BY THE ASSESSEE PERTAINS TO CHARGING OF INTEREST U/S 234B OF THE ACT AND CONSEQUENT ADDITION OF RS.69 22 0/-. SINCE THE LEARNED REPRESENTATIVES FROM BOTH THE SIDES AGREED THAT IT IS CONSEQUENTIAL IN NATURE AND VIDE ABOVE PARA DISALLOWANCE HAS BEEN REDUCED TO 25 % THEREFORE IT IS CERTAINLY CONSEQUENTIAL IN NATURE THEREFORE THE AO IS DIREC TED TO GIVE CONSEQUENTIAL EFFECT. 5. FINALLY THIS APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER HEARING OF THE APPEAL IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES ON 10. 2.2010. (JOGINDER SINGH) JUDICIAL MEMBER FEBRUARY 10 2010 COPY TO APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE 4