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Income Tax Appellate Tribunal, “C” BENCH : KOLKATA
Before: Hon’ble Shri S.S. Godara, JM Hon’ble Shri Dr. Arjun Lal Saini]
ORDER Shri S.S. Godara, JM:
This assessee’s appeal for assessment year 2012-13 arises against the CIT(A), 2, Kolkata’s order dated 20-03-2017 passed in case no. 228/CIT(A)-2/15-16 involving proceedings u/s 143(3) of the Income-tax Act, 1961 ( in short ‘Act’).
Heard both the learned parties. Case file perused.
2. The assessee raises the following substantive grounds in the instant appeal:- 1. For that in view of the facts and circumstances of the case the action of the learned CIT(A) in upholding the action the Assessing officer in respect of disallowance/ additions of Rs. 5980494/ - made by him on account of alleged excess claim of labour charges for having alleged additional quantity of 291050.20 MT of cement is arbitrarily bad in law as well as on facts.
For that in view of the facts and circumstances of the case that there was no excess claim of labour charges paid as alleged by the Inter Dominion Trading Agency P.Ltd. Assessing officer and complete details and documentary evidences having been filed during the course of hearing and as well as before the Appellate Authority, the learned CIT(A) was not justified in confirming the addition made by the Assessing officer on mere surmise supposition and on hypothical reasons and without properly appreciating the submissions and Modus oparendy of the business made before him and the entire estimated addition of Rs. 5980494/- addition made by the Assessing officer needs to be deleted in full.
3. For that in view of the facts and circumstances of the case the learned CIT(A) erred in law as well as on facts in confirming the disallowances of Rs. 1282196/- made by the Assessing officer on account of cement claim being 10% total claim of Rs. 12821960.33 without properly appreciating the submissions and details filed in the course of hearing instead of deleting the entire additions of Rs. 1282196/-.
It transpires during the course of hearing that assessee company had incurred a sum of Rs.31,37,928.60 as expenses on account of clearing and loading charges. It had placed on record all the relevant details before the Assessing Officer as well as the CIT(A). The very position continues before us as well strict the taxpayer has filed detailed paper book running into 1 to 158 pages comprising of its submission filed before the CIT(A), comparative chart of quantity of cement handling and labour charges for the twin AYs 2011-12 and 2012-13, complete statement of cement claim made by M/s. ACC Ltd with copies of debit notes and credit notes, comparative chart of expenses for the twin AYs 2011-12 and 2012, details of inspection & supervision charges with ledger copies & TDS payment, copy of agency agreement with M/s. ACC Ltd, audited accounts/tax audit report (TAR) for the impugned assessment year, copy of assessment order framed in succeeding assessment year 2013-14; respectively.
The Assessing Officer came to conclusion during the course of scrutiny that assessee had raised excess labour charges claim in respect of additional quantity of 291050.2 MT of cement handling charges as compared to sale. He therefore disallowed the said excess labour charges at Rs. 1,19,60,988/- @ 50% i.e. Rs.59,80,494/- alongwith 2
Inter Dominion Trading Agency P.Ltd. corresponding excess cement claim of Rs.12,92,196/-@ 10% of the total amount of Rs.1,28,21,960/-; respectively. These twin disallowances made in the course of assessment stands affirmed in the lower appellate proceedings.
Learned departmental representative fails to dispute that neither the Assessing Officer nor the CIT(A) have given any basis for estimating the 10% twin disallowances. There is also no comparative analysis of the corresponding figures in the preceding as well as succeeding assessment years qua the twin issues. We therefore deem it appropriate in these facts and circumstances that a lump sum excess labour/handling expenses disallowance to Rs. 5 lakhs under the former head and Rs. 2 lakhs under the latter one out of Rs.59,80,494 and Rs.12,82,196; respectively, would meet the ends of justice with a rider the same shall not be treated as a precedent against the assessee in other assessment year. Necessary computation to follow as per law.
This assessee’s appeal is partly allowed in above terms. Order pronounced in the Court on 13-09-2019 Sd/- Sd/- [ Arjun Lal Sainiy ] [ S.S.Godara ] Accountant Member Judicial Member Dated :13-09-2019 **PRADIP, Sr. PS Copy of the order forwarded to:
1. 1. Appellant/Assessee: M/s. Inter Dominion Trading Agency Private Limited 15 Brabourne Road, 4th Fl., Kolkata-1.
2. Respondent/Department: The I.T.O., Ward 6(2), Aaykar Bhawan, Kolkata-69. 3..C.I.T(A).- 4. C.I.T.- Kolkata.
5. CIT(DR), Kolkata Benches, Kolkata.