Income Tax Appellate Tribunal - Ahmedabad
Shivangi Exports Pvt. Ltd.,, Baroda vs The Acit, Circle-4(3),, Baroda on 7 August, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC" BENCH, AHMEDABAD
BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER &
Ms. MADHUMITA ROY, JUDICIAL MEMBER
I.T.A. No.2079/Ahd/2016
(Assessment Year : 2004-05)
Shivangi Exports Pvt.Ltd. Vs. The Income Tax Officer
57/D, Maheshwari Society Ward-4(3)
Gotri Road Baroda-390 007
Baroda 390 021
[PAN No.AACCS9775P]
(Appellant) .. (Respondent)
Appellant by : Shri M.K. Patel, AR
Respondent by : Shri V.K. Singh, Sr.DR
Date of Hearing 21/06/2018
Date of P ronouncement 07/ 08 /2018
ORDER
PER Ms. MADHUMITA ROY - JM:
The instant appeal has been filed by the assessee before us against the order dated 12.05.2016 passed by the Commissioner of Income Tax(Appeals)-2, Vadodara [Ld.CIT(A) in short] for Assessment Year (AY) 2004-05 whereby and whereunder the application filed by the assessee u/s.154 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for rectification of the order dated 16.11.2006 passed by the Assessing Officer (AO) has been rejected.
2. The brief facts relating to the appeal is this that the assessee has filed its return of income for the AY 2004-05 on 01.11.2004 showing loss of Rs.(-)56,80,981/-. Upon scrutiny, notices were sent to the assessee including show-cause notice dated 05.10.2006. Since nothing was forthcoming from the assessee ex-parte order was passed by the Assessing Officer (AO) to the effect as follows:-
-2- ITA No.2079/Ahd/2016Shivangi Exports Pvt.Ltd. vs. ACIT Asst.Year - 2004-05 "5. Indirect Expenses:-
The company has debited Indirect Expenses of Rs.95,30,347/- to the profit and loss account as detailed under schedule L to P&L, account, which includes the following:
1S.No. Expenses on account of Amount in (Rs.)
01. Provisions made for expenses 11,32,997
02. Electricity charges under schedule K 4,24,692
03. Factory maintenance 1,55,797
04. Factory diesel and Kerosene Expenses 3,18,766
05. Freight inward 7,36,551
06. Machinery maintenance 1,69,027
07. Ocean Freight 5,75,620
08. Commission 1,99,066
09. Staff welfare expenses 2,19,529
10. Bank interest 17,39,785
11. Miscellaneous expenses 1,23,774
12. Professional charges 3,65,708
13. Telephone and related expenses 2,88,696
14. Travelling foreign and travel expenses 5,26,902
15. Vehicle maintenance/petrol expenses 3,52,840
Total 73,49,750
"It is noted from the Schedule "L" to P&L a/c. that the assessee has debited indirect expenses of Rs.73,49,750. The assessee was required to furnish the details as asked for (vide No.11 of questionnaire dated 19....2006) and thereafter vide Q.No.5 of Final Show letter dated ...10.2006) In this connection a Final show cause letter dated 05.10.2005 was also issued to the assessee. There was no response whatsoever from the assessee. Under the circumstances and in absence of any details, for want of check and possible leakages, I disallow 50% of the indirect expenses of Rs.73,49,7850 which comes to Rs.36,74,875/- and added back to the income of the assessee. Penalty proceedings u/s.271(1)(c) are initiated.
6. Bad Debts written off of Rs.13,51,685.
The assessee was specifically asked to explain the Bad debts of Rs.13,51,585 vide Q.No.11(vii) this office letter dated 10.07.2006, dated 31.07.2006 and thereafter vide Q.No.5(vii) of Final show cause dated 05.10.2006. There was no response from the assessee. Therefore, the claim remains unexplained, unproved and unsupported by any evidences.
7. Since the above two additions have the effect of concealing the particulars of income and the addition there off results into reducing the loss declared in the return of income. It is held that tax that would have been chargeable on the income in respect of which particular have been concealed or inaccurate particulars have been furnished had such income been total income.
Therefore penalty proceedings u/s.271(1)(c) are initiated as provided in explanation 4(a) to section 271(1)(c) submitted by Finance Act 2002 w.e.f.01.04.2003. Subject to above remarks, the total income of the assessee is worked out as under:
-3- ITA No.2079/Ahd/2016Shivangi Exports Pvt.Ltd. vs. ACIT Asst.Year - 2004-05 Total loss as per computation of income (-) Rs.56,80,980 Add: Disallowances/Additions
1. Indirect expenses as discussed in (para-5) Rs.36,74,875
2. Bad debts written off as discussed in para-6 Rs.13,51,685 Rs.50,26,560 Total Income (-) Rs.6,54,420 Assessed loss (-)Rs. 6,54,420 Assessed u/s.144 of the I T Act. Charge interest u/s.234B & 234C as applicable. Give credit for prepared taxes, if any, after due verification. Issue Demand Notice and challan accordingly. Issue notice u/s.274 r.w.s.271(1) and Notice u/s.271(1)(b) r.w.s.274 of the IT Act for failing to comply the statutory notices."
3. Being aggrieved by the said order, the assessee went in appeal when on 19.03.2012 the Ld. CIT(A) has disposed of the appeal of the assessee in the following manner:
"4.5. I have considered the submissions of the learned Authorized Representative, the order of the Assessing Officer and the remand report. During the course of assessment proceedings, the appellant has not submitted the details, but the same were produced during the course of appellate proceedings. The A.O. has stated that almost all the expenses have been made in cash and no supporting bills and vouchers are furnished by the assessment proceedings. Some of the copies of ledger accounts are illegible. Thus, complete verification of the expenses debited under the various head of the indirect expenses are not possible, hence, the A.O. was justified in making the disallowance at 40% of these expenses. This has been refuted by the appellant in his rejoinder to the remand report. These issues are taken up as follows:
(i) So far as provision made for expenses are concerned, the appellant in his submission had itself admitted that the amounts of ₹5,61,9111/- pertain to the prior financial year as it was a balance as on 01.04.2003. Hence, this amounts being prior period expenses and there being no explanation on behalf of the appellant as to how these amounts are allowable in the current assessment year, the same cannot be allowed as deduction in computation of income of the A.Y. 2004-05. Hence, the A.O. is directed to disallow this amount.
(ii) The following expenses have been paid through bank and vide cheque:
Electricity charges ₹ 4,24,692/-
Bank Interest ₹ 17,39,785/-
Professional charges ₹ 3,65,708/-
Telephone and related expenses ₹ 2,88,696/-
-4-
ITA No.2079/Ahd/2016
Shivangi Exports Pvt.Ltd. vs. ACIT
Asst.Year - 2004-05
Hence, these amounts are held to be allowable as a deduction in computation of total income.
(iii) So far as balance amounts of ₹33,97,872/- is concerned, the appellant has not been able to substantiate these expenses with evidences. Moreover, almost all these expenses have been incurred in cash and hence, the A.O.'s action or disallowing 50% of these expenses is upheld as the expenses are not fully verifiable.
4.6. This ground of appeal is accordingly decided."
3.1. So far as the claim of bad debts are concerned, the Ld. CIT(A) was pleased to delete the same. Thereafter, on 07.08.2015 the assessee has filed an application for rectification u/s.154 of the Act order dated 19.03.2012 passed by the Ld. CIT(A) with the following statement.
"1.2. The applicant says that the facts relevant to the present application are briefly as under:
a) The second ground of the appeal was disallowance of Rs.36,74,875/- being 50% of the total indirect expenses incurred during the year. It was explained during the appellate hearing that while making disallowance out of Indirect Expenses the Assessing Officer has disallowed Rs.11,32,997/- being the provision for expenses. It was explained that out of the said expenditure Rs.5,61,911/- was the opening balance as on 1-4-2003.
The said item viz. 11,32,997/- was a Balance Sheet item and never entered the Profit & Loss Account of the year under consideration. It was explained that the expenditure to the extent of Rs.5,71,096/- only was debited to the Profit & Loss Account under this head during the year.
b) In view of the above, it is submitted that while deciding the appellant the expenses amounting to Rs.5,61,911/- have wrongly been held as Prior Period Expenses. All the relevant documents viz. (i) Copy of Assessment Order dated 6.11.2006; and (ii) Copy of submissions filed before the Hon'ble CIT(A) are enclosed as EXHIBIT-II and III respectively."
3.2. The said application was thereafter dismissed by the Ld. CIT(A)-2, Vadodara by and under an order dated 12.05.2016 with the following observation:
-5- ITA No.2079/Ahd/2016Shivangi Exports Pvt.Ltd. vs. ACIT Asst.Year - 2004-05
"4. I have carefully considered the facts on records, rectification application and submissions of the Ld. Authorized Representative. I find that the issue raised in the petition u/s.154 has been duly considered by the CITG(A)-III, Baroda in the appeal order dated 19.03.2012 and accordingly he has passed a detailed and speaking order wherein the claim of expenses pertaining to earlier years had been also adjudicated. Thus, I am of the considered view that there is no apparent mistake in the appeal order which can be rectified u/s.154. It is also worthwhile to mention that the CIT(A) has no power to review his appeal order. Accordingly, ....."
4. The instant appeal has come up before us by the assessee challenging the said order dated 12.05.2016 passed by the Ld. CIT(A) rejecting the said application u/s.154 of the Act. Meanwhile, against the quantum order dated 19.03.2012 passed by the Ld. CIT(A) an appeal was preferred by the assessee before this Ld. Tribunal which was ultimately disposed of by the Co-ordinate Bench by and under an order dated 10.12.2015 with the following observation:
"4. On appeal, the ld.CIT(A) has restricted this disallowance to Rs.22,55,435/-. This is the 50% of the expenditure which were incurred in cash.
5. With the assistance of the learned representatives, we have gone through the record carefully. It is pertinent to note that that section 144 would suggest that in order to estimate income, learned Assessing Officer has to exercise his discretion which should be in consonance with best of his judgment. We are conscious of the fact that in various authoritative pronouncements, it has been propounded that in making a best judgment assessment, the Assessing Officer must not act dishonestly or vindictively or capriciously. He must make, what he honestly believe to be a fair estimate of the proper figure of assessment and for this purpose he must be able to take into consideration, local knowledge, reputation of the assessee about his business, the previous history of the assessee or the similarly situated assessee. It is also pertinent to mention that judgment is a faculty to decide matter with wisdom, truly and legally. Judgment does not depend upon the arbitrary, caprice of an adjudicator, but on settled and invariably principles of justice. Thus, in a best judgment, even if, there is an element of guess work, it should not be a wild one, but shall have reasonable nexus to the available material and circumstances of each assessee.
6. In the light of the above discussion, if we examine the impugned orders, then it would reveal that expense disallowed at 50% is on the higher side. Admittedly the assessee was not in a position to produce supporting evidence, then ad hoc disallowance -6- ITA No.2079/Ahd/2016 Shivangi Exports Pvt.Ltd. vs. ACIT Asst.Year - 2004-05 on account of such failure ought not to be made more than 20% of the expenses. Taking into consideration all these aspects, we confirm the disallowance to 20% of the expenditure shown in Schedule "L". In other words, the disallowance would be 20% of Rs.73,49,750/-. These figures were considered by the ld.AO while making the addition at Rs.36,74,875/- being 50%. Now the disallowance will be Rs.14,69,950/- i.e. (Rs.73,49,750 x 20%)
7. In the result, the appeal of the assessee is partly allowed.
Order pronounced in the Court on 10th December, 2015 at Ahmedabad."
6. We have heard the Representatives of the respective parties. We have perused the relevant materials available on record. We find that the order passed by the Ld. CIT(A) dated 19.03.2012 against which the rectification application was preferred and ultimately dismissed by the order dated 12.05.2016 merged with the order passed by the Co-ordinate Bench on 10.12.2015 and attained finality. In view of that matter, rectification application of the quantum order dated 19.03.2012 itself has lost its force since the very basis of such application i.e. quantum order dated 19.03.2012 has already been tested and decided in appeal. Consequently, the application before us questioning the validity of rejection of the said rectification application rendered infructuous. Accordingly, the appeal filed by the assessee is dismissed as infructuous.
7. In the result, appeal of the Assessee is dismissed as infructuous.
This Order pronounced in Open Court on 07 / 08 /2018
Sd/- Sd/-
( WASEEM AHMED ) ( Ms. MADHUMITA ROY )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 07 / 08 /2018
ट .सी.नायर, व.
न.स./T.C. NAIR, Sr. PS
-7-
ITA No.2079/Ahd/2016
Shivangi Exports Pvt.Ltd. vs. ACIT
Asst.Year - 2004-05
आदे श क त ल
प अ े
षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं धत आयकर आयु त / Concerned CIT
4. आयकर आयु त(अपील) / The CIT(A)-
5. !वभागीय
त
न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड) फाईल / Guard file.
आदे शानुसार/ BY ORDER, स या!पत //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation ..25.7.2018 (dictation-pad pages attached at the end of this appeal-file)
2. Date on which the typed draft is placed before the Dictating Member ... 25.7.2018
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......7.8.18
7. Date on which the file goes to the Bench Clerk.....................7.8.18
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................
IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. No.2079/Ahd/2016 (Assessment Year : 2004-05) Shivangi Exports Pvt.Ltd. Vs. The Income Tax Officer 57/D, Maheshwari Society Ward-4(3) Gotri Road Baroda-390 007 Baroda 390 021 [PAN No.AACCS9775P] (Appellant) .. (Respondent) Appellant by : Shri M.K. Patel, AR Respondent by : Shri V.K. Singh, Sr.DR Date of Hearing 21/06/2018 Date of P ronouncement 07/ 08 /2018 ORDER PER Ms. MADHUMITA ROY - JM:
The instant appeal has been filed by the assessee before us against the order dated 12.05.2016 passed by the Commissioner of Income Tax(Appeals)-2, Vadodara [Ld.CIT(A) in short] for Assessment Year (AY) 2004-05 whereby and whereunder the application filed by the assessee u/s.154 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for rectification of the order dated 16.11.2006 passed by the Assessing Officer (AO) has been rejected.
2. The brief facts relating to the appeal is this that the assessee has filed its return of income for the AY 2004-05 on 01.11.2004 showing loss of Rs.(-)56,80,981/-. Upon scrutiny, notices were sent to the assessee including show-cause notice dated 05.10.2006.
Since nothing was forthcoming from the assessee ex-parte order was passed by the Assessing Officer (AO) to the effect as follows:-
-2- ITA No.2079/Ahd/2016Shivangi Exports Pvt.Ltd. vs. ACIT Asst.Year - 2004-05 "5. Indirect Expenses:-
The company has debited Indirect Expenses of Rs.95,30,347/- to the profit and loss account as detailed under schedule L to P&L, account, which includes the following:
1S.No. Expenses on account of Amount in (Rs.)
01. Provisions made for expenses 11,32,997
02. Electricity charges under schedule K 4,24,692
03. Factory maintenance 1,55,797
04. Factory diesel and Kerosene Expenses 3,18,766
05. Freight inward 7,36,551
06. Machinery maintenance 1,69,027
07. Ocean Freight 5,75,620
08. Commission 1,99,066
09. Staff welfare expenses 2,19,529
10. Bank interest 17,39,785
11. Miscellaneous expenses 1,23,774
12. Professional charges 3,65,708
13. Telephone and related expenses 2,88,696
14. Travelling foreign and travel expenses 5,26,902
15. Vehicle maintenance/petrol expenses 3,52,840
Total 73,49,750
"It is noted from the Schedule "L" to P&L a/c. that the assessee has debited indirect expenses of Rs.73,49,750. The assessee was required to furnish the details as asked for (vide No.11 of questionnaire dated 19....2006) and thereafter vide Q.No.5 of Final Show letter dated ...10.2006) In this connection a Final show cause letter dated 05.10.2005 was also issued to the assessee. There was no response whatsoever from the assessee. Under the circumstances and in absence of any details, for want of check and possible leakages, I disallow 50% of the indirect expenses of Rs.73,49,7850 which comes to Rs.36,74,875/- and added back to the income of the assessee. Penalty proceedings u/s.271(1)(c) are initiated.
6. Bad Debts written off of Rs.13,51,685.
The assessee was specifically asked to explain the Bad debts of Rs.13,51,585 vide Q.No.11(vii) this office letter dated 10.07.2006, dated 31.07.2006 and thereafter vide Q.No.5(vii) of Final show cause dated 05.10.2006. There was no response from the assessee. Therefore, the claim remains unexplained, unproved and unsupported by any evidences.
7. Since the above two additions have the effect of concealing the particulars of income and the addition there off results into reducing the loss declared in the return of income. It is held that tax that would have been chargeable on the income in respect of which particular have been concealed or inaccurate particulars have been furnished had such income been total income.
Therefore penalty proceedings u/s.271(1)(c) are initiated as provided in explanation 4(a) to section 271(1)(c) submitted by Finance Act 2002 w.e.f.01.04.2003. Subject to above remarks, the total income of the assessee is worked out as under:
-3- ITA No.2079/Ahd/2016Shivangi Exports Pvt.Ltd. vs. ACIT Asst.Year - 2004-05 Total loss as per computation of income (-) Rs.56,80,980 Add: Disallowances/Additions
1. Indirect expenses as discussed in (para-5) Rs.36,74,875
2. Bad debts written off as discussed in para-6 Rs.13,51,685 Rs.50,26,560 Total Income (-) Rs.6,54,420 Assessed loss (-)Rs. 6,54,420 Assessed u/s.144 of the I T Act. Charge interest u/s.234B & 234C as applicable. Give credit for prepared taxes, if any, after due verification. Issue Demand Notice and challan accordingly. Issue notice u/s.274 r.w.s.271(1) and Notice u/s.271(1)(b) r.w.s.274 of the IT Act for failing to comply the statutory notices."
3. Being aggrieved by the said order, the assessee went in appeal when on 19.03.2012 the Ld. CIT(A) has disposed of the appeal of the assessee in the following manner:
"4.5. I have considered the submissions of the learned Authorized Representative, the order of the Assessing Officer and the remand report. During the course of assessment proceedings, the appellant has not submitted the details, but the same were produced during the course of appellate proceedings. The A.O. has stated that almost all the expenses have been made in cash and no supporting bills and vouchers are furnished by the assessment proceedings. Some of the copies of ledger accounts are illegible. Thus, complete verification of the expenses debited under the various head of the indirect expenses are not possible, hence, the A.O. was justified in making the disallowance at 40% of these expenses. This has been refuted by the appellant in his rejoinder to the remand report. These issues are taken up as follows:
(i) So far as provision made for expenses are concerned, the appellant in his submission had itself admitted that the amounts of ₹5,61,9111/- pertain to the prior financial year as it was a balance as on 01.04.2003. Hence, this amounts being prior period expenses and there being no explanation on behalf of the appellant as to how these amounts are allowable in the current assessment year, the same cannot be allowed as deduction in computation of income of the A.Y. 2004-05. Hence, the A.O. is directed to disallow this amount.
(ii) The following expenses have been paid through bank and vide cheque:
Electricity charges ₹ 4,24,692/-
Bank Interest ₹ 17,39,785/-
Professional charges ₹ 3,65,708/-
Telephone and related expenses ₹ 2,88,696/-
-4-
ITA No.2079/Ahd/2016
Shivangi Exports Pvt.Ltd. vs. ACIT
Asst.Year - 2004-05
Hence, these amounts are held to be allowable as a deduction in computation of total income.
(iii) So far as balance amounts of ₹33,97,872/- is concerned, the appellant has not been able to substantiate these expenses with evidences. Moreover, almost all these expenses have been incurred in cash and hence, the A.O.'s action or disallowing 50% of these expenses is upheld as the expenses are not fully verifiable.
4.6. This ground of appeal is accordingly decided."
3.1. So far as the claim of bad debts are concerned, the Ld. CIT(A) was pleased to delete the same. Thereafter, on 07.08.2015 the assessee has filed an application for rectification u/s.154 of the Act order dated 19.03.2012 passed by the Ld. CIT(A) with the following statement.
"1.2. The applicant says that the facts relevant to the present application are briefly as under:
a) The second ground of the appeal was disallowance of Rs.36,74,875/- being 50% of the total indirect expenses incurred during the year. It was explained during the appellate hearing that while making disallowance out of Indirect Expenses the Assessing Officer has disallowed Rs.11,32,997/- being the provision for expenses. It was explained that out of the said expenditure Rs.5,61,911/- was the opening balance as on 1-4-2003.
The said item viz. 11,32,997/- was a Balance Sheet item and never entered the Profit & Loss Account of the year under consideration. It was explained that the expenditure to the extent of Rs.5,71,096/- only was debited to the Profit & Loss Account under this head during the year.
b) In view of the above, it is submitted that while deciding the appellant the expenses amounting to Rs.5,61,911/- have wrongly been held as Prior Period Expenses. All the relevant documents viz. (i) Copy of Assessment Order dated 6.11.2006; and (ii) Copy of submissions filed before the Hon'ble CIT(A) are enclosed as EXHIBIT-II and III respectively."
3.2. The said application was thereafter dismissed by the Ld. CIT(A)-2, Vadodara by and under an order dated 12.05.2016 with the following observation:
-5- ITA No.2079/Ahd/2016Shivangi Exports Pvt.Ltd. vs. ACIT Asst.Year - 2004-05
"4. I have carefully considered the facts on records, rectification application and submissions of the Ld. Authorized Representative. I find that the issue raised in the petition u/s.154 has been duly considered by the CITG(A)-III, Baroda in the appeal order dated 19.03.2012 and accordingly he has passed a detailed and speaking order wherein the claim of expenses pertaining to earlier years had been also adjudicated. Thus, I am of the considered view that there is no apparent mistake in the appeal order which can be rectified u/s.154. It is also worthwhile to mention that the CIT(A) has no power to review his appeal order. Accordingly, ....."
4. The instant appeal has come up before us by the assessee challenging the said order dated 12.05.2016 passed by the Ld. CIT(A) rejecting the said application u/s.154 of the Act. Meanwhile, against the quantum order dated 19.03.2012 passed by the Ld. CIT(A) an appeal was preferred by the assessee before this Ld. Tribunal which was ultimately disposed of by the Co-ordinate Bench by and under an order dated 10.12.2015 with the following observation:
"4. On appeal, the ld.CIT(A) has restricted this disallowance to Rs.22,55,435/-. This is the 50% of the expenditure which were incurred in cash.
5. With the assistance of the learned representatives, we have gone through the record carefully. It is pertinent to note that that section 144 would suggest that in order to estimate income, learned Assessing Officer has to exercise his discretion which should be in consonance with best of his judgment. We are conscious of the fact that in various authoritative pronouncements, it has been propounded that in making a best judgment assessment, the Assessing Officer must not act dishonestly or vindictively or capriciously. He must make, what he honestly believe to be a fair estimate of the proper figure of assessment and for this purpose he must be able to take into consideration, local knowledge, reputation of the assessee about his business, the previous history of the assessee or the similarly situated assessee. It is also pertinent to mention that judgment is a faculty to decide matter with wisdom, truly and legally. Judgment does not depend upon the arbitrary, caprice of an adjudicator, but on settled and invariably principles of justice. Thus, in a best judgment, even if, there is an element of guess work, it should not be a wild one, but shall have reasonable nexus to the available material and circumstances of each assessee.
6. In the light of the above discussion, if we examine the impugned orders, then it would reveal that expense disallowed at 50% is on the higher side. Admittedly the assessee was not in a position to produce supporting evidence, then ad hoc disallowance -6- ITA No.2079/Ahd/2016 Shivangi Exports Pvt.Ltd. vs. ACIT Asst.Year - 2004-05 on account of such failure ought not to be made more than 20% of the expenses. Taking into consideration all these aspects, we confirm the disallowance to 20% of the expenditure shown in Schedule "L". In other words, the disallowance would be 20% of Rs.73,49,750/-. These figures were considered by the ld.AO while making the addition at Rs.36,74,875/- being 50%. Now the disallowance will be Rs.14,69,950/- i.e. (Rs.73,49,750 x 20%)
7. In the result, the appeal of the assessee is partly allowed.
Order pronounced in the Court on 10th December, 2015 at Ahmedabad."
6. We have heard the Representatives of the respective parties. We have perused the relevant materials available on record. We find that the order passed by the Ld. CIT(A) dated 19.03.2012 against which the rectification application was preferred and ultimately dismissed by the order dated 12.05.2016 merged with the order passed by the Co-ordinate Bench on 10.12.2015 and attained finality. In view of that matter, rectification application of the quantum order dated 19.03.2012 itself has lost its force since the very basis of such application i.e. quantum order dated 19.03.2012 has already been tested and decided in appeal. Consequently, the application before us questioning the validity of rejection of the said rectification application rendered infructuous. Accordingly, the appeal filed by the assessee is dismissed as infructuous.
7. In the result, appeal of the Assessee is dismissed as infructuous.
This Order pronounced in Open Court on 07 / 08 /2018
Sd/- Sd/-
( WASEEM AHMED ) ( Ms. MADHUMITA ROY )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 07 / 08 /2018
ट .सी.नायर, व.
न.स./T.C. NAIR, Sr. PS
-7-
ITA No.2079/Ahd/2016
Shivangi Exports Pvt.Ltd. vs. ACIT
Asst.Year - 2004-05
आदे श क त ल
प अ े
षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं धत आयकर आयु त / Concerned CIT
4. आयकर आयु त(अपील) / The CIT(A)-
5. !वभागीय
त
न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड) फाईल / Guard file.
आदे शानुसार/ BY ORDER, स या!पत //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation ..25.7.2018 (dictation-pad pages attached at the end of this appeal-file)
2. Date on which the typed draft is placed before the Dictating Member ... 25.7.2018
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......7.8.18
7. Date on which the file goes to the Bench Clerk.....................7.8.18
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................