SHRI BRIJ BHUSHAN, Alwar v. ITO, Jaipur

ITA 750/JPR/2011 | 2008-2009
Pronouncement Date: 28-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 75023114 RSA 2011
Assessee PAN ABLPB7070R
Bench Jaipur
Appeal Number ITA 750/JPR/2011
Duration Of Justice 3 year(s) 3 month(s) 5 day(s)
Appellant SHRI BRIJ BHUSHAN, Alwar
Respondent ITO, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 28-11-2014
Assessment Year 2008-2009
Appeal Filed On 23-08-2011
Judgment Text
IN THE INCOME TAX APPELALTE TRIBUNAL: JAIPUR BENCH JAIPUR BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI B. C. MEENA ACCOUNTANT MEMBER. ITA.NOS. 475 749 & 750/JP/2011 (ASSESSMENT YEAR: 2006-07 07-08 & 08-09) SHRI BRIJ BUSHAN M/S SHARDA UDYOG B-35 MIA ALWAR APPELLANT VS. INCOME TAX OFFICER WARD 1(2) ALWAR RESPONDENT PAN: ABLPB7070R / BY REVENUE :SHRI RAJESH OJHA D.R. / BY ASSESSEE : SHRI P. C. PARWAL A.R. /DATE OF HEARING :25.11.2014 /DATE OF PRONOUNCEMENT :28.11.2014 I.T.A. NOS. 475 749 & 750/JP/2011 A.Y. (06-07 07-08 & 08-09) (SHRI BRIJ BUSHAN VS. ITO) PAGE 2 ORDER PER SHAILENDRA KUMAR YADAV J.M: THESE THREE APPEALS HAVE BEEN FILED BY ASSESSEE AGA INST THE RESPECTIVE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) ALWAR DATED 24.03.2011 FOR A.Y. 2006-07 22.06.201 1 FOR BOTH A.YS. 2007-08 AND 2008-09. SO THEY ARE BEING DISPO SED OF BY WAY OF COMMON ORDER FOR SAKE OF CONVENIENCE. 2.1 IN ITA NO. 475/JP/2011 FOR A.Y. 2006-07 ASSESS EE HAS FILED APPEAL ON THE FOLLOWING GROUNDS: 1. THE LD COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN FACTS AND IN LAW IS CONFIRMING PARTLY TRAD ING ADDITION OF RS.50000/-. 2. THE LD COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IN NOT ALLOWING DEDUCTION U/S 80IB OF RS.97 364/- OF THE INCOME TAX ACT. 2.2 IN ITA NO. 749/JP/2011 FOR A.Y. 2007-08 ASSESS EE HAS FILED APPEAL ON THE FOLLOWING GROUNDS: 1. THE LD COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IS CONFIRMING PARTLY TRAD ING ADDITION OF RS.50000/-. 2. THE LD COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IS CONFIRMING PARTLY TELE PHONE EXPENSES OF RS.5000/-. 3. THE LD COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IS CONFIRMING PARTLY CAR EXPENSES OF RS.5000/-. 4. THE LD COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IN NOT ALLOWING DEDUCTION U/S 80IB OF RS.120400/- OF THE INCOME TAX ACT. I.T.A. NOS. 475 749 & 750/JP/2011 A.Y. (06-07 07-08 & 08-09) (SHRI BRIJ BUSHAN VS. ITO) PAGE 3 2.3 IN ITA NO. 750/JP/2011 FOR A.Y. 2007-08 ASSESS EE HAS FILED APPEAL ON THE FOLLOWING GROUNDS: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN FACTS AND IN LAW IS CONFIRMING PARTLY TRAD ING ADDITION OF RS.50000/-. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IS CONFIRMING PARTLY TELE PHONE EXPENSES OF RS.3000/-. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IS CONFIRMING PARTLY CAR EXPENSES OF RS.8000/-. 3. FIRST WE TAKE ITA NO. 475/JP/2011 FOR A.Y. 2006- 07. 3.1 FIRST ISSUE IN A.Y. 2006-07 IS REGARDING CONFIR MING PARTLY TRADING ADDITION OF RS.50 000/-. ASSESSING OFFICER MADE ADDITION OF RS.2 00 000/- ON ACCOUNT OF TRADING ADD ITION. HE OBSERVED THAT MANUFACTURING EXPENSES SUCH AS WAGES ELECTRICITY EXPENSES AND DIESEL EXPENSES WERE NOT I N CONFIRMITY WITH THAT OF QUANTITY OF MUSTARD CRUSHED (PRODUCTIO N) IN ANY PARTICULAR MONTH. DAILY YIELD RATES OF OIL DECLARE D IN STOCK REGISTER ARE DIFFERENT AND RANGING FROM 31% TO 36% DEPENDING UPON THE QUALITY OF MUSTARD. ASSESSEE HAS CLAIMED SHORTAGE IN MUSTARD ACCOUNT .88% WHILE IN PRECEDING YEAR IT WAS CLAIMED .48%. HE ALSO NOTICED THAT NO RECORD OF RAW MATERI AL WAS MAINTAINED. THE DAILY PRODUCTION OF FINISHED GOODS WAS NOT SUBJECT TO PROPER VERIFICATION SPECIFICALLY AS TO W HY THE YIELD WAS DIFFERENT FOR EACH DAY. THE FUEL EXPENSES (BOI LER EXPENSES) WERE NOTICED TO HAVE BEEN CLAIMED FROM SEPTEMBER 20 05 BUT THE PURCHASE BILLS OF JANUARY WERE SUBMITTED BY ASS ESSEE. I.T.A. NOS. 475 749 & 750/JP/2011 A.Y. (06-07 07-08 & 08-09) (SHRI BRIJ BUSHAN VS. ITO) PAGE 4 VARIOUS CONTENTIONS WERE RAISED IN THIS REGARD BUT ASSESSING OFFICER MADE ADDITION OF RS. 2 LACS ON ACCOUNT OF T RADING RESULTS AFTER REJECTION OF BOOKS OF ACCOUNT. 3.2 SAME WERE OPPOSED BEFORE FIRST APPELLATE AUTHOR ITY WHEREIN VARIOUS CONTENTIONS RAISED ON BEHALF OF ASS ESSEE. STAND OF ASSESSEE HAS BEEN THAT ADDITION OF RS.2 LA CS DOES NOT JUSTIFY TO ADD RS. 2 LACS EVERY YEAR ON THE BASIS O F ITAT ORDER. HE SUBMITTED THAT BOOKS RESULTS ARE VERIFIABLE GENU INE AND COMPARABLE WITH PREVIOUS RESULT. EACH ASSESSMENT Y EAR IS SEPARATE ASSESSMENT YEAR AND IT CANNOT BE BASIS THA T EACH ASSESSMENT YEAR THERE WILL BE TRADING ADDITION OF R S.2 LACS WHEN STOCK REGISTER DAY TO DAY BOOKS OF ACCOUNTS AN D VOUCHERS WERE MAINTAINED. IN PREVIOUS TWO ASSESSMENT YEARS DAILY OIL CAKE PRODUCTION REGISTER WERE NOT MAINTAINED NOW TH IS YEAR OIL CAKE REGISTER IS MAINTAINED BUT ASSESSING OFFICER H AS POINTED OUT VARIOUS DEFECTS IN BOOKS OF ACCOUNTS OF ASSESSE E. THE GROSS PROFIT RATE HAS BEEN DECLINED COMPARE TO PRECEDING YEAR. IN THIS BACKGROUND IT WAS REQUESTED THAT INVOKING PRO VISION U/S 145(3) ARE NOT JUSTIFIED AND ADDITION IS ON HIGHER SIDE AND ACCORDINGLY TRADING ADDITION OF RS.2 LACS DESERVES TO BE DELETED. CIT(A) HAVING CONSIDERED THE SAME OBSERVE D THAT ASSESSING OFFICER HAS POINTED OUT VARIOUS DEFECTS I N BOOKS OF ACCOUNTS. ASSESSEE MAINTAINED DAILY STOCK REGISTER OF RAW MATERIAL AND PRODUCTION OF OIL AND OIL CAKE. ACCOU NTS ARE CLAIMED TO BE AUDITED BY CHARTERED ACCOUNTANT BUT I N PAST ASSESSMENT YEAR 2004-05 THE SAME DEFECTS WERE POINT ED BY I.T.A. NOS. 475 749 & 750/JP/2011 A.Y. (06-07 07-08 & 08-09) (SHRI BRIJ BUSHAN VS. ITO) PAGE 5 ASSESSING OFFICER AND ADDITION WAS MADE WHICH WAS CONFIRMED BY ITAT JAIPUR. DURING THE YEAR UNDER CONSIDERATI ON NP HAS DECLINED COMPARATIVE TO LAST YEAR. HAVING CONSIDER ED THE ASSESSEES REPLY CIT(A) FOUND THAT ASSESSEE HAS MA INTAINED THE KHAL REGISTER BUT THE ADDITION IS HIGHER SIDE. THEREFORE HE RESTRICTED THE ADDITION TO RS.50 000/-. 3.3 TAKING ALL FACTS AND CIRCUMSTANCES INTO CONSIDE RATION WE ARE NOT INCLINED TO INTERFERE IN THE ORDER OF CIT(A ) WHO HAS RESTRICTED THE ADDITION TO RS. 50 000/- BECAUSE ASS ESSING OFFICER WAS NOT FOUND MANUFACTURING EXPENSES SUCH AS WAGES ELECTRICITY EXPENSES AND DIESEL EXPENSES IN CONFIRMING WITH THAT OF QUANTITY OF MUSTARD CRUSHED IN PARTICU LAR MONTH. DAILY YIELD RATE OF OIL DECLARED IN STOCK REGISTER WERE DIFFERENT AND RANGING FROM 31% TO 36% DEPENDING UPON THE QUAL ITY OF MUSTARD. ASSESSEE CLAIMED SHORTAGE IN MUSTARD ACCO UNT .88% WHILE IN PRECEDING YEAR IT WAS CLAIMED .48%. IT WA S ALSO FOUND THAT NO RECORD OF RAW MATERIAL MAINTAINED WHICH HA S NOT BEEN REPLIED ON BEHALF OF ASSESSEE. THE DAILY PRODUCTIO N OF FINISHED GOODS IS NOT SUBJECT TO PROPER VERIFICATION SPECIFI CALLY AS TO WHY THE YIELD IS DIFFERENT FOR EACH DAY. IN THIS BACKG ROUND CIT(A) WAS JUSTIFIED IN RESTRICTING ADDITION TO RS.50 000/ -. SAME IS UPHELD. 4. NEXT ISSUE IS WITH REGARDS TO ALLOWABLILITY OF D EDUCTION OF RS.97 364/- U/S. 80IB OF INCOME TAX ACT. ASSESSING OFFICER MADE DISALLOWANCE U/S. 80IB BECAUSE ASSESSEE CREDIT ED IN HIS I.T.A. NOS. 475 749 & 750/JP/2011 A.Y. (06-07 07-08 & 08-09) (SHRI BRIJ BUSHAN VS. ITO) PAGE 6 PROFIT AND LOSS ACCOUNT INSURANCE INCOME OF RS. 7 8 9 763/- AND CLAIMED DEDUCTION U/S. 80IB ALTHOUGH INSURANCE INCOME WAS CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OT HER SOURCES WHICH IS NOT QUALIFY FOR DEDUCTION U/S.80I B OF THE ACT. ASSESSING OFFICER FURTHER OBSERVED THAT IN CASE OF SHRI KRISHAN MURARI AGARWAL PROPRIETOR OF M/S. SHREE SHANKUNTLA OIL MILL ALWAR ITAT VIDE APPEAL I.T.A. NO. 37/JP/2007 AND I TA NO. 64/JP/2007 FOR A.Y. 2003-04 DATED 22/02/2008 HELD T HAT INSURANCE INCOME IS FROM OTHER SOURCES. THEREFORE THE SAME IS EXCLUDED FROM THE BUSINESS INCOME FOR THE PURPOS E OF DEDUCTION U/S 80IB OF THE IT ACT. 4.1 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHO RITY WHEREIN VARIOUS CONTENTIONS WERE RAISED IN THIS REG ARD AND CIT(A) HAVING CONSIDERED THE SUBMISSION ON BEHALF O F ASSESSEE FOUND THAT INSURANCE INCOME OF RS.7 89 763/- DESERV ES TO BE CHARGED UNDER HEAD OF INCOME FROM OTHER SOURCES. HENCE IT WILL NOT QUALIFY FOR DEDUCTION U/S. 80IB. 4.2 ACCORDINGLY SAME HAS BEEN OPPOSED BEFORE US I NTER ALIA SUBMITTING THAT CIT(A) ERRED IN FACTS AND LAW IN NO T ALLOWING DEDUCTION U/S.80IB OF RS.97 364/- OF THE INCOME TAX ACT. SAME SHOULD BE ALLOWED. ON OTHER HAND LD. DEPARTM ENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 4.3 AFTER GOING THROUGH THE SUBMISSION AND MATERIAL ON RECORD WE ARE NOT INCLINED TO INTERFERE WITH THE F INDING OF CIT(A) BECAUSE ASSESSING OFFICER MADE DISALLOWANCE U/S. 80IB I.T.A. NOS. 475 749 & 750/JP/2011 A.Y. (06-07 07-08 & 08-09) (SHRI BRIJ BUSHAN VS. ITO) PAGE 7 BECAUSE ASSESSEE CREDITED IN ITS PROFIT & LOSS ACCO UNT INSURANCE INCOME OF RS.7 89 763/- AND CLAIMED DEDUC TION U/S. 80IB ALTHOUGH INSURANCE INCOME WAS CHARGEABLE TO TA X UNDER THE HEAD INCOME FROM OTHER SOURCES WHICH IS NOT QU ALIFY FOR DEDUCTION U/S.80IB OF THE ACT. THIS REASONED FINDI NG OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME BECAUSE INSURANCE INCOME WILL NOT QUALIFY FOR DEDUC TION U/S. 80IB. 5. AS A RESULT APPEAL FILED BY ASSESSEE FOR A.Y. 2 006-07 IS DISMISSED. 6. NOW WE TAKE ITA NO. 749/JP/2011 FOR A.Y. 2007-08 . 6.1 FIRST ISSUE IS REGARDING TRADING ADDITION OF RS .50 000/-. WE HAVE DISCUSSED AND DECIDED SIMILAR ISSUE IN A.Y. 2006-07 VIDE PARA 3.1 TO 3.3 OF THIS ORDER AGAINST ASSESSEE . FACTS BEING SIMILAR SO FOLLOWING SAME REASONING WE ARE NOT IN CLINED TO INTERFERE IN THE FINDING OF CIT(A) WHO HAS CONFIRME D THE TRADING ADDITION OF RS.50 000/-. SAME IS UPHELD. 7. NEXT ISSUE IS WITH REGARDS TO DISALLOWANCE OF TE LEPHONE EXPENSES. ASSESSING OFFICER DISALLOWED 10% OF TELE PHONE EXPENSES AND DISALLOWANCE CAME TO RS.10 033/-. TAK ING ALL FACTS AND CIRCUMSTANCES INTO CONSIDERATION DISALLO WANCE IN QUESTION IS DIRECTED TO BE DELETED. 8. NEXT ISSUE IS WITH REGARDS TO DISALLOWANCE OF CA R EXPENSES. ASSESSING OFFICER DISALLOWED MADE DISALLOWANCE OF R S.18 487/- I.T.A. NOS. 475 749 & 750/JP/2011 A.Y. (06-07 07-08 & 08-09) (SHRI BRIJ BUSHAN VS. ITO) PAGE 8 OUT OF CAR EXPENSES WHICH WERE RESTRICTED TO RS.5 000/-. TAKING ALL FACTS AND CIRCUMSTANCES INTO CONSIDERATI ON DISALLOWANCE IN QUESTION IS DIRECTED TO BE DELETED. 9. NEXT ISSUE IS WITH REGARDS TO ALLOWABILITY OF DE DUCTION U/S. 80IB OF RS.1 20 400/-. WE HAVE DISCUSSED AND DECID ED SIMILAR ISSUE IN A.Y. 2006-07 VIDE PARA 4 TO 4.3 OF THIS OR DER AGAINST ASSESSEE. FACTS BEING SIMILAR SO FOLLOWING SAME R EASONING WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF CIT (A) WHO HAS DISALLOWED THE DEDUCTION U/S. 80IB OF RS.1 20 400/- . SAME IS UPHELD. 10. AS A RESULT APPEAL FILED BY ASSESSEE FOR A.Y. 07-08 IS PARTLY ALLOWED. 11. NOW WE TAKE ITA NO. 750/JP/2011 FOR A.Y. 2008-0 9. 11.1 FIRST ISSUE IS REGARDING TRADING ADDITION OF R S.50 000/-. WE HAVE DISCUSSED AND DECIDED SIMILAR ISSUE IN A.Y. 2006-07 VIDE PARA 3.1 TO 3.3 OF THIS ORDER AGAINST ASSESSEE . FACTS BEING SIMILAR SO FOLLOWING SAME REASONING WE ARE NOT IN CLINED TO INTERFERE IN THE FINDING OF CIT(A) WHO HAS CONFIRME D THE TRADING ADDITION OF RS.50 000/-. SAME IS UPHELD. 12. NEXT ISSUE IS WITH REGARDS TO DISALLOWANCE OF T ELEPHONE EXPENSES. ASSESSING OFFICER DISALLOWED 10% OF TELE PHONE EXPENSES AND DISALLOWANCE CAME TO RS.7 824/-. TAKI NG ALL FACTS AND CIRCUMSTANCES INTO CONSIDERATION DISALLO WANCE IN QUESTION IS DIRECTED TO BE DELETED. I.T.A. NOS. 475 749 & 750/JP/2011 A.Y. (06-07 07-08 & 08-09) (SHRI BRIJ BUSHAN VS. ITO) PAGE 9 13. NEXT ISSUE IS WITH REGARDS TO DISALLOWANCE OF C AR EXPENSES. ASSESSING OFFICER DISALLOWED MADE DISALLOWANCE OF R S.16 316/- OUT OF CAR EXPENSES WHICH WERE RESTRICTED TO RS.8 000/-. TAKING ALL FACTS AND CIRCUMSTANCES INTO CONSIDERATI ON DISALLOWANCE IN QUESTION IS DIRECTED TO BE DELETED. 14. AS A RESULT APPEAL FILED BY ASSESSEE FOR A.Y. 08-09 IS PARTLY ALLOWED. 15. IN THE RESULT ASSESSEES APPEAL FOR A.Y. 06-07 IS DISMISSED AND THAT OF OTHER TWO YEARS I.E. FOR A.Y. 07-08 & 0 8-09 ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF NOVEMBER 2014. SD/- SD/- (B. C. MEENA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R TRUE COPY S.K.SINHA COPY FORWARDED TO: 1. THE APPELLANT- SHRI BRIJ BUSHAN 2. THE RESPONDENT- ITO WARD 1(2) 3. THE CIT 4. CIT(APPEALS) 5. THE DR 6. GUARD FILE (ITA NOS. 475 749 & 750/JP/2011) BY ORDER A.R. JAIPUR.