M/s Spark Profiles Pvt. Ltd., v. Dy. Commissioner of Income Tax-vi, Kanpur

ITA 670/LKW/2014 | 2005-2006
Pronouncement Date: 28-11-2014 | Result: Dismissed

Appeal Details

RSA Number 67023714 RSA 2014
Assessee PAN AAHCS5215R
Bench Lucknow
Appeal Number ITA 670/LKW/2014
Duration Of Justice 3 month(s) 9 day(s)
Appellant M/s Spark Profiles Pvt. Ltd.,
Respondent Dy. Commissioner of Income Tax-vi, Kanpur
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 28-11-2014
Assessment Year 2005-2006
Appeal Filed On 19-08-2014
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO.670/LKW/2014 ASSESSMENT YEAR:2005 - 06 DY.CIT - IV KANPUR. VS M/S S PARK PROFILES PVT. LTD. PLOT NO.522 VIVEKANANDNAGAR COLONY KUKAT PALLY HYDERABAD. PAN:AAHCS5215R (RESPONDENT) (APPELLANT) NONE APPELLANT BY SHRI ALOK MITRA D. R. RESPONDENT BY 29/09/2014 DATE OF HEARING 28 /11/2014 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I KANPUR DATED 28/03/2014 FOR THE ASSESSMENT YEAR 2005 - 2006. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE THE IMPUGNED ORDER IS ARBITRARY AND UNJUSTIFIED. 2.1 BECAUSE THE LEARNED LOWER APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS 1 00 000.00 (OUT OF RS. 2 80 628) ON ACCOUNT OF 'BUSINESS EXPENSES' DEBITED IN THE PROFIT & LOSS ACCOUNT WITHOUT ESTABLISHING ANY D ISCREPANCY IN THE RECORDS OR FALSIFYING THEIR GENUINENESS INCURRED IN CONNECTION WITH BUSINESS AND SUPPORTED BY BILLS VOUCHERS AND CHEQUES. 2.2 BECAUSE IN RESPECT OF LRS. 98 400.00 BEING THE STAFF SALARY THE LEARNED RESPONDENT HAS HIMSELF DELETED THE AD DITION IN TERMS OF PARA 8.3.2 OF THE IMPUGNED ORDER THEREFORE IN NO EVENT OF THE CASE CAN THIS BE MADE A PART OF PARTIAL DISALLOWANCE. 2.2 BECAUSE NONE OF THE EVIDENCES PRODUCED IN SUPPORT OF MEETING THESE EXPENSES UNDER VARIOUS HEADS VIZ. 2 DEVELOPMENT C HARGES INSPECTION CHARGES INSURANCE CHARGES FOR EXPORT MEDICAL EXPENSES OF DIRECTORS ETC. HAD BEEN FALSIFIED BY THE AUTHORITIES BELOW AND NO COGENT MATERIAL HAS BEEN BROUGHT ON RECORD TO JUSTIFY ADDITION OF RS. 1 00 000.00 WHILE THE ASSESSING AUTHORITY HIMSELF HAD ACCEPTED THE PROGRESSIVE TREND OF THE BUSINESS WITH ENHANCED GROSS PROFIT RATE IN THE YEAR UNDER APPEAL. THE RESPONDENT FAILED TO DISCHARGE THE BURDEN TO DISPROVE ANY OF THE EXPENSES SO INCURRED AND VERIFIED BY THE AUDIT REPORT. THUS THE ORDER IS NOT SUSTAINABLE IN LAW. 2.3 BECAUSE IT IS NOT CORRECT TO OPINE THAT SOME EXPENSES ARE NOT VERIFIABLE AND THAT TOO IN THE ABSENCE OF ANY CONCRETE FINDING TO THE CONTRARY BY THE AUTHORITIES BELOW. IT HAS NOT BEEN POINTED OUT AS TO WHICH EXPENSES ARE NOT VERIFIABLE AND THE EVIDENCE PRODUCED BY THE APPELLANT IS NOT WORTHY O F CREDENCE. SWEEPING REMARKS IN THIS RESPECT ARE NOT RECOGNIZED AND CANNOT TAKE PLACE OF ANY POSITIVE FINDING. LAW DOES NOT PERMIT AD HOC ADDITION WHEN ALL THE MATERIAL EVIDENCE HAD BEEN ADDUCED BEFORE THE ASSESSING AUTHORITY AND NO DEFECTS DISCREPANCY OR OTHERWISE UNDER ANY HEAD OF BUSINESS EXPENDITURE WAS FOUND OR POINTED OUT. THEREFORE THE IMPUGNED ORDER IS NOT MAINTAINABLE IN LAW. 2.4 BECAUSE THE EXPENSES DISALLOWED THIS YEAR AS IN THE PRECEDING PARAS HAVE BEEN ALLOWED BY THE ASSESSING AUTHORITY IN THE NEXT SUCCEEDING YEARS WITHOUT LEAST OBJECTIONS THEREFORE DISALLOWANCE THIS YEAR ( WHILE ADOPTING THE SIMILAR TRADE PRACTICES) AND ESTIMATING UNDECLARED INCOME AT RS 1 00 000.00 IS NO T WARRANTED IN LAW. 3. BECAUSE THE LEARNED LOWER AUTHORITIES HAVE ERRED IN LAW IN REDUCING THE RATE OF DEPRECIATION ON TOOLS MACHINE PARTS WHICH INTER ALIA IS AKIN TO PLANT AND MACHINERY FROM THE CLAIMED RATE OF DEPRECIATION OF 25% THEREFORE ADDITION OF RS. 15 296.00 IS NOT JUSTIFIED. 4. BECAUSE THE LEARNED APPELLATE AUTHORITY IS NOT JUSTIFIED IN SUSTAINING ADDITION OF RS. 24 000.00 WHILE THERE WAS NO LEGAL JUSTIFICATION WAS PRESENT AND MORE SO WHEN NOTHING ADVERSE WAS DETECTED THEREFORE ADDITION OF RS.2 4 000.00 IS NOT WARRANTED IN LAW. 5. BECAUSE THE ASSESSMENT MADE ON UNFAIR AND DISHONEST GUESS WORK AND THE ORDER BEING CAPRICIOUS AND WITHOUT ANY VALID REASONS THE LEARNED APPELLATE AUTHORITY OUGHT TO HAVE QUASHED THE SAME ON THESE GROUNDS ALONE. 3 6. BECAUSE THE ORDERS OF THE AUTHORITIES BELOW ARE BASED ON CONJECTURES AND SURMISES. 7. BECAUSE THE IMPUGNED ORDER IS OTHERWISE IS BAD IN LAW. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE DATE OF HEARING IN SPITE OF NOTICE AND HENCE WE PROCEED TO DECIDE THIS APPEAL OF THE ASSESSEE EX - PARTE QUA THE ASSESSEE. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D.R. OF THE REVENUE PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FIRST ISSUE IS REGARDING THE DISALLOWANCE OF RS.1 00 000/ - OUT OF RS.2 80 628/ - ON ACCOUNT OF BUSINESS EXPENSES DEBITED IN THE PROFIT & LOSS ACCOUNT. THIS DISALLOW ANCE WAS MADE BY THE ASSESSING OFFICER ON THE BASIS THAT VARIOUS EXPENSES WERE DEBITED UNDER VARIOUS HEADS IN THE PRESENT YEAR WHEREAS NO SUCH EXPENDITURE WAS DEBITED UNDER THOSE HEADS IN THE IMMEDIATELY PRECEDING YEAR. THE ASSESSING OFFICER ASKED THE ASS ESSEE TO JUSTIFY THE CLAIM OF THE EXPENSES UNDER THESE HEADS WHEN THE SAME WAS NIL IN THE PRECEDING YEAR. IN REPLY IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT IN THE PRECEDING YEAR THE WORK OF THE ASSESSEE COMPANY HAS BEEN CARRIED OUT ONLY FOR 4 MONTHS FOR WHICH THE EXPENSES UNDER THESE HEADS WERE NOT INCURRED BUT IN THE PRESENT YEAR THE ASSESSEE COMPANY HAS WORKED FOR WHOLE YEAR AND THEREFORE THESE EXPENSES ARE INCURRED. IN ADDITION TO THIS IT IS ALSO A FINDING GIVEN BY ASSESS ING OFFICER THAT MOST OF THE EXPENSES DEBITED UNDER THESE HEADS ARE NOT VERIFIABLE. NEITHER BEFORE THE CIT(A) NOR BEFORE US THE ASSESSEE HAS BROUGHT ANYTHING ON RECORD TO SHOW THAT THESE EXPENSES ARE VERIFIABLE. THEREFORE WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. 6. THE SECOND ISSUE IS REGARDING DISALLOWANCE OF RS.15 296/ - OUT OF DEPRECIATION. THIS ISSUE HAS BEEN DECIDED BY CIT(A) ON THE BASIS THAT THE ELIGIBLE RATE OF DEPRECIATION IS 15% AS PRESCRIBED UNDER THE ACT. NONE 4 AP PEARED BEFORE US TO POINT OUT ANY MISTAKE IN THIS FINDING OF CIT(A) AND HENCE ON THIS ISSUE ALSO WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A). 7. THE THIRD ISSUE IS REGARDING ADDITION SUSTAINED BY CIT(A) OF RS.24 000/ - . IN THIS REGARD WE FIND THAT THE ADDITION OF RS.1 49 049/ - WAS MADE BY THE ASSESSING OFFICER OUT OF UNSECURED LOAN ON THE BASIS THAT SHRI G. MADHU BABOO WAS NOT HAVING CAPACITY TO ADVANCE THIS AMOUNT. OUT OF THIS ADDITION CIT(A) HAS SUSTAINED ADDITION OF RS.24 000/ - ON THE BASIS THAT SHRI MADHU BABOO RECEIVED THE SALARY OF RS.1.08 LAC OUT OF WHICH HE HAD PAID LIC PREMIUM OF RS.62 662/ - LEAVING BALANCE OF RS.45 338/ - AND IN ADDITION TO THAT HE HAD INTEREST INCOME OF RS.35 750/ - . IT IS HELD BY CIT(A) THAT EVEN IF IT IS HELD THAT THIS ENTIRE AMOUNT WAS AVAILABLE WITH SHRI MADHU BABOO FOR MAKING INVESTMENT IN ASSESSEE COMPANY THERE WAS AN UNEXPLAINED BALANCE AMOUNT OF RS.24 000/ - AND HE SUSTAINED TO THIS EXTENT ONLY. CONSIDERING THE FACTS OF THE PRESENT CASE WE DO NOT F IND ANY REASON TO INTERFERE IN THE ORDER OF LEARNED CIT(A) ON THIS ISSUE ALSO. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 /11/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R. I.T.A.T. LUCKNOW ASSTT. REGISTRAR