U.P. Samaj Kalyan Nirman Nigam Ltd., Lucknow v. ACIT, Lucknow

ITA 671/LKW/2010 | 2007-2008
Pronouncement Date: 11-01-2011 | Result: Dismissed

Appeal Details

RSA Number 67123714 RSA 2010
Bench Lucknow
Appeal Number ITA 671/LKW/2010
Duration Of Justice 1 month(s) 23 day(s)
Appellant U.P. Samaj Kalyan Nirman Nigam Ltd., Lucknow
Respondent ACIT, Lucknow
Appeal Type Income Tax Appeal
Pronouncement Date 11-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 11-01-2011
Date Of Final Hearing 10-01-2011
Next Hearing Date 10-01-2011
Assessment Year 2007-2008
Appeal Filed On 18-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B : LUCKNOW BEFORE SHRI H. L. KARWA HONBLE VICE PRESIDENT AND SHRI N. K. SAINI ACCOUNTANT MEMBER I.T.A. NO.671/LUC/10 ASSESSMENT YEAR:2007-2008 U.P. SAMAJ KALYAN NIRMAN VS. A.C.I.T. NIGAM LIMITED LUCKNOW. RANGE-II PAN:AAACU1932C LUCKNOW. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. C. AGARWAL ADVOCATE RESPONDENT BY: SHRI P. K. BAJAJ D. R. ORDER ORDER ORDER ORDER PER N. K. SAINI: PER N. K. SAINI: PER N. K. SAINI: PER N. K. SAINI: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 15/09/2010 OF CIT(A)-I LUCKNOW RELEVANT TO ASSESSMENT YEAR 2007- 2008. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO TH E CONFIRMATION OF DISALLOWANCE OF `3 84 889/- MADE BY THE ASSESSING OFF ICER OUT OF THE CLAIM OF THE ASSESSEE ON ACCOUNT OF PREPAID EXPENSES. 2. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 29/10/2007 DECLARING AN INC OME OF `4 48 39 030/-. THE CASE WAS SELECTED FOR SCRUTINY. D URING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THA T THE ASSESSEE DEBITED PRIOR YEARS EXPENSES TOTALING TO `66 82 9 28/- TO THE 2 PROFIT & LOSS ACCOUNT AS PER DETAILED APPEARING IN SCH EDULE-J. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE NATURE A ND NECESSITY OF SUCH PRIOR YEAR EXPENSES BEING INCURRED AND DEBITED TO PROFIT & LOSS ACCOUNT FOR THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSEE SUBMITTED THAT THE SIMI LAR CLAIM HAD BEEN ALLOWED AT `17 19 396/- FOR THE ASSESSMENT YEA R 2005-2006. IT WAS FURTHER CLAIMED THAT OUT OF AMOUNT OF `66 82 928/- A SUM OF `11 30 135/- REPRESENTED THE AMOUNT PAID TOWARDS SALA RIES WAGES ETC. TO EMPLOYEES ON ACCOUNT OF INCREASE IN DA ARREARS OF SALARY ETC. IT WAS FURTHER CLAIMED THAT PRIOR YEARS EXPENSES UNDER SE VERAL HEADS HAD BEEN ADDED BACK IN THE COMPUTATION CHART OF TOT AL INCOME BY THE ASSESSEE ITSELF. THE ASSESSING OFFICER AFTER CONSIDERING TH E SUBMISSIONS OF THE ASSESSEE OBSERVED THAT NO COGENT REASON HAS BEEN ASSIGNED FOR NOT ADDING BACK THE REMAINING EXPENSES UND ER VARIOUS SUB HEADS AS PER FOLLOWING DETAILS: S.NO. SUB HEAD AMOUNT (`) -------- ---------------------------------------- ---- ---------------- 1. TRAVELLING 34 964 2. VEHICLE RUNNING 7 300 3. OFFICE MAINTENANCE 26 715 4. PRINTING AND STATIONERY 500 5. TELEPHONE 1 455 6. MISC. EXPENSES 4 965 7. DEPRECIATION 2 43 194 8. AUDIT FEE 2 074 9. AUDITORS EXPENSES 46 284 10. RATES AND TAXES 4 000 3 11. POSTAGE AND TELEGRAM 11 414 12. BANK CHARGES 360 13. CONVEYANCE 1 664 TOTAL 3 84 889 3 84 889 3 84 889 3 84 889 2.1 THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ABOVE EXPENSES WERE OF ROUTINE NATURE AND THOSE WERE INCURRED ON AC TUAL PAYMENT BASIS DURING THE YEAR NO SUBSEQUENT CHANGE/ENHANCEMEN T ON LIABILITY WAS SUPPOSED TO ARISE IN THE SUBSEQUENT YEARS. ACCORDINGL Y THE DISALLOWANCE OF `3 84 889/- WAS MADE AND ADDED TO THE INCOME OF THE ASSESSEE. 3. THE ASSESSEE CARRIED THE MATTER TO LEARNED CIT(A) WH O CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING THAT OU T OF TOTAL CLAIM AT `66 82 928/- THE ASSESSING OFFICER IDENTIFIED 13 ITE MS OF EXPENSES TO BE SUCH AS PERTAINED TO BACK YEARS AND IN RESPECT OF WH ICH THE LIABILITY OR ANY CHANGE IN LIABILITY WAS NOT EXPECTED TO ARISE IN THE SUBSEQUENT YEARS. HE FURTHER OBSERVED THAT THOSE IDENTIFIED ITE MS OF EXPENSES WERE TOWARDS TRAVELLING VEHICLE RUNNING OFFICE MAI NTENANCE MISC. EXPENSES DEPRECIATION CONVEYANCE ETC. AND THE LIABI LITY ON ACCOUNT OF THOSE EXPENSES CRYSTALLIZED AND WAS ASCERTAINABLE IN THE RESPECTIVE YEAR OR SHORTLY THEREAFTER AND THAT THERE WAS NO ACCO UNTING RATIONALE OR COMPULSION IN CLAIMING THOSE EXPENSES IN A SUBSEQUENT YEAR. ACCORDINGLY THE DISALLOWANCE MADE BY THE ASSESSING OFFI CER WAS CONFIRMED. NOW THE DEPARTMENT IS IN APPEAL. 4 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SU BMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITT ED THAT THE LIABILITY FOR THE IMPUGNED EXPENSES AROSE AND CRYSTALISE D DURING THE YEAR UNDER CONSIDERATION THEREFORE THOSE WERE ALLOW ABLE IN THE YEAR UNDER CONSIDERATION. 5. IN HIS RIVAL SUBMISSIONS THE LEARNED D. R. STRONGLY SU PPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT ASSIGNED ANY VALID REASON TO SUBSTANTIATE THAT TH E LIABILITY OF THE IMPUGNED EXPENSES AROSE AND CRYSTALISED DURING THE Y EAR UNDER CONSIDERATION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFUL LY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE IT IS NOTICED THAT THE ASSESSING OFFICER IDENTIFIED 13 ITEMS A MOUNTING TO `3 84 889/- OUT OF THE CLAIM OF THE ASSESSEE OF `66 82 928/- TOWARDS PRIOR YEARS EXPENSES. THE MAJOR AMOUNT INCLUDED IN DI SALLOWANCE OF `3 84 889/- WAS ON ACCOUNT OF DEPRECIATION AMOUNTING TO `2 43 194/-. IN OUR OPINION THE LIABILITY IN RESPECT OF DEPRECIA TION CANNOT CRYSTALISE IN THE LATER YEARS AT THE MOST IT CAN BE CARRIED FO RWARD IF NOT ADJUSTED IN THE RELEVANT YEAR HOWEVER IT IS NOT THE CASE OF THE ASSESSEE. SIMILARLY IN RESPECT OF OTHER EXPENSES THE ASSESSING OFF ICER 5 CATEGORICALLY STATED THAT THOSE EXPENSES WERE OF ROUTI NE NATURE AND WERE INCURRED ON ACTUAL PAYMENT BASIS THEREFORE NO SUBSEQUENT CHANGE/ENHANCEMENT OF LIABILITY WAS SUPPOSED TO ARISE I N THE SUBSEQUENT YEAR. THIS OBSERVATION OF THE ASSESSING OFFICER HAS NOT BEEN REBUTTED BY FURNISHING ANY EVIDENCE EITHER BEFO RE THE ASSESSING OFFICER OR BEFORE THE LEARNED CIT (A). WE THEREFO RE CONSIDERING THE TOTALITY OF THE FACTS ARE OF THE VIEW THAT THE LEAR NED CIT (A) WAS FULLY JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFI CER. IN THAT VIEW OF THE MATTER WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE ASSESSEE. 7. IN THE RESULT THE APPEAL IS DISMISSED. (THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11/01 /2011) SD/. SD/. ( H. L. KARWA ) (N. K. SAINI) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 11/01/11 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR