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Income Tax Appellate Tribunal, KOLKATA BENCH “B” KOLKATA
Before: Shri N.V. Vasudevan & Shri Waseem Ahmed
आदेश /O R D E R
PER Waseem Ahmed, Accountant Member:-
This appeal by assessee is arising out of order of Commissioner of Income-Tax (Appeals), Jalpaiguri in appeal No.26/JAL/CIT(A)/JAL/10-11 dated 25.01.2011. Assessment was framed by ACIT, Circle-1, Jalpaiguri u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 30.12.2010 for Assessment Year 2008-09.
A.Y.2008-09 Gour Nitye Tea & Inds. Ltd. v. ACIT Cir-1, Jal Page 2 2. The issue raised by assessee in this appeal is that Ld. CIT(A) has erred in confirming the order of Assessing Officer by disallowing certain expenses as detailed below:- “packing materials expenses of Rs.12,89,597/- Tea selling expenses of Rs.38,17,760/- Repairs & maintenance charges of Rs.11,09,226/-“
Briefly stated facts are that assessee is a public limited company and is into the business of tea plantation and manufacturing of tea. During the relevant year Assessing Officer has disallowed the expenses on ad hoc basis as stated above on the ground of non-production of supporting documents and self-hand made debit vouchers. Aggrieved by this order assessee preferred appeal before Ld. CIT(A) who has upheld the order of AO by restricting the disallowance to the tune of 5% of the total expenses incurred by assessee. Aggrieved by this order assessee preferred appeal before the Tribunal and raised following grounds of appeal:-
“1) That the confirmation of the Ld. Assessing Officer’s (Briefly the A.O’s) order dated 25/06/2012 by the Ld. Commissioner of Income Tax (Appeals) is arbitrary, bad in law and is not proper and also denial of natural justice.
2) That your appellant petitioner has been carrying on business in growing, manufacturing and selling of tea. The appellant company e- filed its relevant return on 27/09/2008 for the assessment year 2008-09 showing income as NIL and loss for the year to be carried forward Rs.41,37,412/-. The Ld. Assessing Officer (Briefly the A.O) completed the assessment on 30/12/2010 determining the loss to be carried forward of Rs.38,88,749/-. In doing so the Ld. AO Disallowing the bona – fide expenses and made additions too arbitrarily and illegally.
That the Ld. Appellant Authority sharing the views of Ld. AO and confirming the determination of possibility of inflating the expenses through self made vouchers in suspicious & hypothetical manner without considering the authenticated Profit & Loss Account & Balance Sheet duly audited by a Qualified Chartered Accountant as well as inspite of submission of original bills of Packing materials expenses and bills of brokers and consignee companies and Bills & Vouchers of repair A.Y.2008-09 Gour Nitye Tea & Inds. Ltd. v. ACIT Cir-1, Jal Page 3 & maintenance expenses by 5% of expenses in lieu of 10% as determined by the assessing officer originally I a routine manner without bringing into the records of any materials in support thereof. The suspicious however high cannot take place of evidence. The Ld. AO had disallowed the said expenses in most casual and routine manner without considering the nature of expenses.”
The Ld AR submitted a paper books containing pages from 1 to 51. At the time of hearing Ld. counsel appearing on behalf of assessee has drawn our attention by referring to page No. 40-42 of assessee’s paper book, wherein the comparative statement of expenditure and percentage of cost for previous year 2005-06, 2006-07 and 2008-09 have been given and based on the same Ld. Counsel for the assessee contended that percentage of expenditure involved during the impugned Assessment Year is less than previous year and he requested to delete the addition which were made by AO based on suspicion and surmises. On the other hand, Ld. DR appearing on behalf of Revenue relied on the orders of authorities below.
After hearing the rival submissions and on careful perusal of the materials available on record, keeping in view of the fact that Ld. Counsel for assessee has filed a comparative statement of expenditure and unit cost per Kg for the last previous year 2005-06, 2006-07 and 2007-08 wherein the above listed expenses are less than the previous year under consideration. The assessee has also submitted a case law in support of its own case, where the Tribunal has given the relief to the assessee, in 2011 for AY 2005-06 dated 16.03.2012 in para-6, which reproduced as under:- “6. After hearing the rival submissions and on careful perusal of materials available on record, keeping in view of the fact that the ld. Counsel for assessee has filed a comparative statement of the expenditure and percentage of cost for AYrs 2002-03 to 2005—06 which are placed at page nos 5 and 6 of the paper book it is observed that the expenditure involved in the assessment year under consideration i.e. 2005-06 is much less than the previous year. Therefore we set aside the orders of the revenue authorities and allow the appeal of the assessee.” A.Y.2008-09 Gour Nitye Tea & Inds. Ltd. v. ACIT Cir-1, Jal Page 4 It is observed that the expenditure involved in the assessment year are less than the year previous year, therefore we set aside the orders of authorities below and allow assessee’s ground.