Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. SANJAY ARORA & SH. N.K.CHOUDHRY
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA No.109(Asr)/2017 Assessment Year:2008-09
M/s. Kapurthala Estate (Pvt.) Vs. Asst. CIT, Ltd., Kapurthala Road Central Circle-I, Basti Bawa Khel Jalandhar Jalandhar (35, Gopal Park, Kapurthala) PAN:AABCK8901G (Appellant) (Respondent) Appellant by: Sh. Surinder Mahajan (Adv.) Respondent by: Sh. A. N. Mishra (Ld. DR) Date of hearing: 17.05.2018 Date of pronouncement: 29.05.2018 ORDER PER N.K.CHOUDHRY, JM: The instant appeal has been preferred by the Assessee/Appellant, on feeling aggrieved against the order dated 28.12.2016, impugned herein, passed by the Ld. CIT(A) Bathinda, u/s 250(6) of the I.T. Act, 1961 (hereinafter called as ‘the Act’).
The assessee has raised the following grounds of appeal. ”1. That on the facts & circumstances of the case, learned Commissioner of Income Tax (Appeals) [‘CIT(A)’] has grossly
ITA No.109/Asr/2017 (A.Y:2008-09) 2 M/s Kapurthala Estate (P) Ltd. vs. ACIT
erred in law in concluding that jurisdiction over the appellant was conferred on the A.O. by way of a valid order u/s 127 by the competent authority. Assessment framed u/s 143(3) is illegal & bad in law and is without jurisdiction.
That on the facts & circumstances of the case, Learned CIT(A) has grossly erred in confirming addition of Rs.1,00,000/- being development expenses. Addition confirmed is illegal and bad in law.
That on the facts & circumstances of the case, learned CIT(A) has grossly erred in confirming addition of Rs.14,000/- made by learned Assessing Officer out of commission paid by invoking provisions of section 40A(2)(b) of the Act. Addition confirmed by the Learned CIT(A) is illegal and bad in law.”
The facts of the case are already on record, which are not repeated herein for the sake of convenience and brevity.
The Ld. Counsel did not raise ground no.1, hence, does not require any adjudication. Ground No.2 relates to the disallowance of some of the expenses to the tune of Rs.1,00,000/-. In support of its ground, it was submitted by the Ld. AR that no incriminating material has been found by the Department for the year under consideration and it is an established law that no addition can be made during the assessment proceedings in absence of incriminating material recovered during the search operations. Further, it was also submitted that addition has been made in an arbitrary manner on assumption & presumptions without any material on records. Even, while making addition, no
ITA No.109/Asr/2017 (A.Y:2008-09) 3 M/s Kapurthala Estate (P) Ltd. vs. ACIT
document has been confronted to the assessee as no details of expenses have been given in the assessment order. In support of ground No.3, it was submitted by the learned Counsel that addition of Rs.14,000/- was made by invoking provision of Sec.40A(2) of the Act. The Ld. Counsel argued that yardstick for determining an expenditure to be excessive or unreasonable, is the fair market value of the goods/services of facilities for which the payment is made and the onus lies on the Assessing Officer to show that the expenditure for which payment has been made is excessive or unreasonable having regard to the market value of the goods. Section 40A(2) casts very heavy burden on the income tax officer to record his findings before making any disallowance under this section.
On the other hand, the Ld. DR relied upon the order passed by the authorities below and submitted that order under challenge does not require any interference as the same does not suffer from any illegality, impropriety and perversity.
We have gone through with the facts and circumstances of the case, as it reflects from the order passed by the authorities below that addition of Rs.1,00,000/- was made on the ground that some of the expenses under this head were spent in cash, not all of which are properly vouched. From the order, it does not reflect that which vouchers were not properly vouched and
ITA No.109/Asr/2017 (A.Y:2008-09) 4 M/s Kapurthala Estate (P) Ltd. vs. ACIT
leading to lack of verifiability. Even otherwise, no document/voucher has been confronted to the assessee.
Neither any document/voucher was confronted to the assessee nor details of the expenses specified in the order passed by the authorities below. In that eventuality, the addition cannot be sustained and therefore, liable to be deleted. Hence, ground No.2 is allowed.
Ground No.3 relates to the addition of Rs.14,000/-. While making this addition, the Revenue Authorities never confronted the assessee with the calculation made for making out the said disallowance and even otherwise, the assessee was never asked to justify rates of commission paid by the company which goes to show that the addition has been made only on assumption without comparing with the fair market value of goods/services or facilities of which the payment is made. Hence, the same is also liable to be deleted. Hence, Ground No. 3 is also allowed.
In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 29 .05.2018.
Sd/- Sd/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:29.05.2018 /PK/ Ps.
ITA No.109/Asr/2017 (A.Y:2008-09) 5 M/s Kapurthala Estate (P) Ltd. vs. ACIT
Copy of the order forwarded to: (1) M/s Kapurthala Estate (Pvt.) Ltd., Jalandhar (2) The Asst. CIT, Central Circle-I, Jalandhar (3) The CIT(A), Bathinda (4) The CIT concerned (5) The SR DR, I.T.A.T., Amritsar True copy By order