Income Tax Appellate Tribunal - Jaipur
Raina Garg, Jaipur vs Assessee on 20 November, 2015
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IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCHES, JAIPUR
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BEFORE:SHRI T.R. MEENA,AM & SHRI LALIET KUMAR, JM
vk;dj vihy la-@ITA No. 61/JP/2013
fu/kZkj.k o"kZ@Assessment Year : 2008-09
Smt. Raina Garg cuke The ACIT
Prop. M/s. Garg Sales Corporation, Vs. Circle- 7
Kaali Paltan, Tonk Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAWPG 4732 F
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : None - Written Submission
jktLo dh vksj ls@ Revenue by : Shri Raj Mehra, JCIT -DR
lquokbZ dh rkjh[k@ Date of Hearing : 27/10/2015
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 20 /11/2015
vkns'k@ ORDER
PER T.R. MEENA, AM
This is an appeal filed by the assessee against the order of the ld. CIT(A)-III, Jaipur dated 08-11-2012 for the assessment year 2008-09 wherein the assessee has raised following grounds in her appeal.
''1. The ld. CIT(A) has erred in confirming addition of Rs. 5,93,806/- from Jungle Expenses Account (Sakh Katran) in spite of better results as well as expenses i.e. 30.45% in this year, 36.56% in last year and 57.25% in A.Y. 2006-07 in jungle expenses a/c which has been accepted by AO. All expenses are fully supported through vouchers as maintained in earlier years.
2 ITA No.61//JP/2013
Smt. Raina Garg vs. ACIT, Circle- 7, Jaipur .
2. The ld. CIT(A) has erred further in confirming 10% adhoc disallowance on account of salary, filing expenses, Hamali expenses, rent of Jeep Motor Cycle etc. , rent of tractor and petrol diesel expenses which are also from jungle expenses account. These are most reasonable in comparison to earlier years and supported with vouchers as in past.'' 2.1 None appeared on behalf of the assessee on the date of hearing. However, the written submission has filed by the assessee which has been taken into consideration while deciding the appeal of the assessee. 3.1 As regards Ground No. 1, the assessee filed its return of income on 29-09-2008 declaring total income of Rs. 36,49,720/- from sale and purchase of Tendupatta on wholesale basis which is used in manufacturing of Biri. The AO observed from the audit report furnished by the assessee that he is a wholesale dealer of Tendupatta which is a seasonal business and based on labour. The AO observed that assessee purchases tendupatta through the State Minor Forest Produce & Development Cooperative Federation Ltd. and the cooperative society decides the terms and conditions to purchase the tendupatta. As per order sheet entry dated 18-10-2010, the AO asked the assessee to produce the books of account alongwith various bills/ vouchers for the expenses made under various heads which were checked on test basis by the AO on production of the bills/ vouchers by the assessee. The AO had gone through the Notification No.Tendupatta(2007)-1 dated 23-11-2006 issued 3 ITA No.61//JP/2013 Smt. Raina Garg vs. ACIT, Circle- 7, Jaipur .
by State Minor Forest Produce & Development Cooperative Federation Ltd. According to the terms and conditions decided by the society, it is clearly mentioned that assessee will purchasse tendupatta from patta collection centre i.e. phad, labour charges for collection, phad munshi, shakh kartan expenses (Branch cutting expenses) will be borne by the society. The AO observed that the assessee had furnished a list of various jungle expense in which expenses on branch cutting (Shakh Kartan) had been debited for the three headquarter Kannod (2,99,931), Ashapur (1,54,050), Kuidani (1,39,825). The AO observed that the expenses claimed by the assessee are not allowable in view of Appendix iv point No. 5(1) of Notification No. Tendupatta 2007-1 dated 23-11-2006 which indicates that society will bear the branch cutting expenses . Thus trhe AO disallowed the amount of three headquarter expenses of s 5,93,806/- and added the same to the income of the assessee.
3.2 The assessee carried the matter before the ld. CIT(A) who upheld the expenses disallowed by the AO by following observations.
''02.3 I have duly considered the submissions of the appellant and material available on record. Labour expenses debited under the head ''Shakha Katran'' are incurred in cash and supported by self made vouchers. Names and address of payees are not mentioned in the vouchers. It shows that these expenses are not verifiable. No such expenses have been claimed in A.Y. 2007-08. In view of 4 ITA No.61//JP/2013 Smt. Raina Garg vs. ACIT, Circle- 7, Jaipur .
these facts and the notification of federation mentioned by AO, disallowance of these expenses is upheld.'' 3.3 The ld. DR relied on the orders of the lower authorities. 3.4 We have heard the ld. DR and perused the written submission filed including the materials available on record. It is observed that the jungle expenses were incurred in cash and supported by self made vouchers which cannot be verified. The disallowance out of jungle expenses in previous years were also made by the AO which had not been disputed by the party. The ld. AR has not given any correlation between the turnover that these expenses were as per terms and conditions of the contract and these expenses were to be borne by the society i.e. State Minor Forest Produce & Development Cooperative Federation Ltd.. Therefore, there is no liability of the assessee to incur such expenses even though these expenses were not wholly and exclusively incurred for the business purpose. It is an obligation on the part of the assessee to discharge its onus which had not been done by the assessee. Therefore, we find no infirmity in the order of the ld. CIT(A) on this issue which is upheld. 4.1 The next ground of the assessee is regarding confirming 10% adhoc disallowances made by the ld. CIT(A) on account of salary, filing expenses, hamali expenses, rent of jeep motor cycle etc. rent of tractor and petrol & diesel expenses under Jungle expenses account. 5 ITA No.61//JP/2013
Smt. Raina Garg vs. ACIT, Circle- 7, Jaipur .
4.2 Brief facts of the issue under consideration is that the AO had confirmed the disallowances to the extent of 20% under the above heads for want of proper bills and vouches by the assessee . The AO observed that most of the expenses under the above heads were made in cash which were not verifiable.
4.3 The assessee carried the matter before the ld. CIT(A) who reduced the above expenses to the extent of 10% by observing as under:-
''0.3.3 On due consideration of the facts available on record, I do not fully agree with the contention of the appellant. Ld AR has not denied that most of the above expenses have been incurred in cash and are supported by self made vouchers. The same are therefore, not verifiable. However, considering the better gross profit rate shown by the appellant, disallowance made @ 20% is considered excessive. The same is restricted to 105 which will meet the end of justice. The appellate decisions of earlier years are not applicable since therein lumpsum trading addition was made after rejecting the account books. This year AO has made addition by way of part disallowances of certain expenses which were not found fully verifiable. Hence, the ground is not covered by earlier years order of CIT(A) or ITAT.'' 4.4 The ld. DR relied on the orders of lower authorities. 4.5 We have heard the ld. DR and perused the written submission filed including the materials available on record. We find that the ld. CIT(A) has taken into consideration all the aspects as to reduction of disallowances from 20% to 10% under the above heads. Therefore, we 6 ITA No.61//JP/2013 Smt. Raina Garg vs. ACIT, Circle- 7, Jaipur .
concur with the finding of the ld. CIT(A) on this issue which is sustained. Thus Ground No. 2 of the assessee is also dismissed. 5.0 In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 20 /11/2015.
Sd/- Sd/- (Laliet Kumar) (T.R. Meena) U;kf;d lnL;@Judicial Member ys[kk lnL;@ Accountant Member (Tk;iqj@Jaipur fnukad@Dated:- 20/11/ 2015 *Mishra
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant - Smt. Raina Garg, Tonk
2. izR;FkhZ@ The Respondent- The ACIT, Circle- 7, Jaipur
3. vk;dj vk;qDr¼vihy ) @ CIT(A)
3. vk;dj vk;qDr@ CIT
4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
5. xkMZ QkbZy@ Guard File (ITA No.61/JP/2013) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar