M/s Pragati Hi-Tech Products Pvt. Ltd., Yamunanagar v. DCIT, Yamunanagar

ITA 99/CHANDI/2011 | 2006-2007
Pronouncement Date: 29-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 9921514 RSA 2011
Bench Chandigarh
Appeal Number ITA 99/CHANDI/2011
Duration Of Justice 6 month(s) 3 day(s)
Appellant M/s Pragati Hi-Tech Products Pvt. Ltd., Yamunanagar
Respondent DCIT, Yamunanagar
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 29-07-2011
Date Of Final Hearing 25-07-2011
Next Hearing Date 25-07-2011
Assessment Year 2006-2007
Appeal Filed On 25-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHA NDIGARH BEFORE SHRI D K SRIVASTAVA AM AND MS. SUSHMA CHOWL A JM ITA NO. 99/CHD/2011 ASSESSMENT YEAR: 2006-07 M/S PRAGATI HI-TECH PRODUCTS P.LTD. V DCIT CIRCLE VILLAGE PANSARA YAMUNANAGAR SAHARANPUR ROAD YAMUNANAGAR. (PAN: AAEFP-4896K) ASSESSEE BY: SHRI TEJ MOHAN SINGH RESPONDENT BY: SHRI N.K.SAINI ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 29.10.201 0. THE APPEAL RELATES TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE FILED ITS RETURN OF INCOME ON 28.11 .2006 RETURNING TOTAL INCOME AT RS.51 87 989/- BEFORE SET OFF OF UN ABSORBED BROUGHT FORWARD DEPRECIATION ALLOWANCE. AFTER SET OFF OF UN ABSORBED BROUGHT FORWARD DEPRECIATION ALLOWANCE THE INCOME RETURNED BY THE ASSESSEE WAS NIL. THE ASSESSEE HOWEVER OFFERED ITS NET PR OFIT OF RS.14 06 689/- FOR TAX U/S 115JB. AFTER SCRUTINY T HE AO DISALLOWED 15% OF THE EXPENSES ON (I) TRAVELING CONVEYANCE A ND CAR (RS.5 24 312/-); (II) BUSINESS PROMOTION (RS.2 35 6 70/-); AND (III) ADVERTISEMENT (RS.4 41 793/-) FOR WANT OF SOME OF T HE VOUCHERS. THE AMOUNT SO DISALLOWED BY THE AO HAS BEEN CONSIDERED NOT ONLY FOR THE PURPOSE OF COMPUTATION OF TOTAL INCOME U/S 143(3) B UT ALSO FOR COMPUTATION OF BOOK PROFITS U/S 115JB. 3. AGGRIEVED BY THE ORDER PASSED BY THE AO THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A) WITHOUT SUCCESS. 4. GROUND NO.2 TAKEN BY THE ASSESSEE READS AS UNDER : THAT WITHOUT PREJUDICE TO THE ABOVE THE LD. C IT(A) HAS ERRED IN UPHOLDING THE ADDITION OF RS.1 80 266/- MA DE ON ACCOUNT OF ADHOC DISALLOWANCE OF 15% OUT OF TOTAL EXPENSES CLAIMED AT RS.12 01 75/- UNDER THE HEADS ITA 99/CHD/2011 PRAGATI HI-TECH PRODUCTS P.LTD. 2 TRAVELING BUSINESS PROMOTION AND ADVERTISEMENT WHI CH IS ARBITRARY & UNJUSTIFIED. 5. WE HAVE HEARD BOTH THE PARTIES. AS REGARDS DISAL LOWANCE OF RS.1 80 266/- BEING 15% OF THE AFORESAID TOTAL EXPE NSES THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSE E HAS ALREADY PAID FRINGE BENEFIT TAX ON TRAVELING EXPENSES AMOUN TING TO RS.4 91 920/- AND THEREFORE NO DISALLOWANCE OUT OF TRAVELING EXPENSES WAS CALLED FOR. WE FIND THAT THIS ASPECT O F THE MATTER HAS NEITHER BEEN CONSIDERED BY THE AO NOR BY THE CIT(A) . WE THEREFORE SET ASIDE THEIR ORDER IN THIS BEHALF AND RESTORE THE MATTER TO THE FILE OF THE AO TO VERIFY THE CLAIM OF THE ASSESSEE AND DISPOSE OF THE MATTER AFRESH IN CONFORMITY WITH LAW . 6. GROUND NO.2 IS TREATED AS ALLOWED FOR STATISTICA L PURPOSES. 7. GROUND NO.3 READS AS UNDER: THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE ACTION OF THE AO TO ENHANCE THE AMOUNT OF BOOK PROF IT BY RS.1 80 266/- WHILE COMPUTING TAX UNDER SECTION 115 JB OF THE ACT WHICH IS ARBITRARY & UNJUSTIFIED. 8. WE HAVE HEARD BOTH THE PARTIES. DISALLOWANCE OF EXPENSES CAN FORM THE BASIS FOR COMPUTATION OF TOTAL INCOME U/S 143/144 AND NOT FOR COMPUTATION OF BOOK PROFITS U/S 115JB. IN THIS VIEW OF THE MATTER THE IMPUGNED ADDITION MADE BY THE AO FOR COMPUTING THE BOOK PROFITS U/S 115JB IS DELETED. 9. GROUND NOS. 1 AND 4 ARE GENERAL IN NATURE AND TH EREFORE DO NOT REQUIRE ANY SPECIFIC ADJUDICATION. 10. APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 29 TH JULY 2011. SD/- SD/- (SUSHMA CHOWLA) (D K SRIV ASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH JULY 2011 POONAM ITA 99/CHD/2011 PRAGATI HI-TECH PRODUCTS P.LTD. 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE D.R INCOME-TAX DEPARTMENT CHANDIGARH ASSISTANT REGISTRAR ITAT CHANDIGARH