Income Tax Appellate Tribunal - Ahmedabad
Gaurav Industries, Ahmedabad vs Assessee on 6 April, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD
AHMEDABAD "C" BENCH
(BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND
T.K. SHARMA, JUDICIAL MEMBER)
ITA No.2191/Ahd/2010
[Asstt. Year : 2007-2008]
M/s.Gaurav Industries Vs. ITO, DCIT, Cir.3
C-1/1212-1213, Phase-IV Ahmedabad.
GIDC, Naroda, Ahmedabad.
(Appellant) (Respondent)
Assessee by : Shri Kedar Laddha
Revenue by : Shri Sanjeev Kashyap
ORDER
PER G.D. AGARWAL, VICE-PRESIDENT : This appeal is by the assessee against the order of the Commissioner of Income Tax (Appeals), Gandhinagar, dated 6.4.2010 arising out of the order of the Assessing Officer passed under Section 143(3) of the I.T. Act, 1961.
2. The ground no.1 of the assessee's appeal reads as under:
"1. Ld.CIT(A) has erred in law by considering assessment order and made disallowance of Rs.75,000/- in respect of payment pertained to the previous year."
3. We have heard both the parties and perused material placed before us. During the year under consideration, the AO disallowed a sum of Rs.75,000/- being the part of the pollution control expenses paid to Naroda Environment Project Ltd. ("NEPL" for short) . The AO disallowed the same on the ground that out of the total bill of Rs.1,40,000/- raised by the "NEPL", Rs.75,000/- did not pertain to the accounting year relevant to the assessment year under consideration. It was pointed out by the learned counsel that "NEPL" is a common effluent treatment plant promoted by all the members in Naroda Industrial Estate with no-profit-no-loss basis for providing facility to its members. The "NEPL" has decided in the year under consideration to increase the charge and accordingly the bill of Rs.1,40,000/- was raised on 1-11-2006.
ITA No.2191/Ahd/2010That the bill was raised during the financial year relevant to the assessment year under consideration and therefore since the liability arose during the year under consideration, the same was rightly claimed in the year under consideration.
4. The learned DR, on the other hand, relied upon the orders of the authorities below.
5. We have carefully considered the submissions of the both the parties and perused the material placed before us. We find the "NEPL" raised the following bill for Rs.1,40,000/- on 1-11-2006:
"NARODA ENVIRON PROJECTS LTD.
Common Effluent Treatment Plant Regd. Office: Plot No.512-515, Phase-I, GIDC, Naroda, Ahmedabad 382 330 Phone : 22816311, 22818391 fax : 22823299 E-mail: [email protected] Website: www.cleanerproduction.org To Gaurav Industries Plot No.C-1/1213, Phase-IV GIDC, Naroda, Ahmedabad - 382 330 Qty.Booked 20000 Ltr/Day Particulars Amount (Rs.) Difference of charges for the period from 1,28,000 July, 2005 to Oct., 2006 @ Rs.8000/- p.m. as being charged for registration @ 7000 ltrs./day instead of 20,000 ltrs.
Add: difference of proportionate addition 12,000 charges for the month of June, 2005 = Rs.3000 + May, 2o006 Rs.6000 + Oct., 2006 = Rs.3000/-
Previous outstanding : Rs.13000.00 Total 1,40,000.00 Rs.One lac forty thousand only.-2- ITA No.2191/Ahd/2010
From the above, it is evident that the "NEPL" raised bill for the difference of charges on 1-11-2006. Thus, the liability of additional charges arose during the financial year relevant to the assessment year under appeal. Therefore, the same is allowed for the year under consideration. We, therefore, delete the disallowance of Rs.75,000/-. The Ground no.1 of the assessee's appeal is allowed.
6. Ground No.2 of the assessee's appeal reads as under:
"2. The ld.CIT(A) has erred in law by considering the assessment order and made disallowance of Rs.40,000/- in respect of traveling and telephone and mobile expenses."
7. We have heard both the parties and perused the material placed before us. We find that the AO has disallowed a sum of Rs.15,000/- out of telephone and mobile expenses and a sum of Rs.25,000/- out of the travellng expenses. During the year under consideration, the assessee claimed telephone and mobile expenses of Rs.1,40,899/-. The personal user of the telephone by the partners of the assessee firm cannot be ruled out. The disallowance made by the AO is approximately 10% of the total expenses claimed. We therefore did not find any justification to interfere in this regard. The same is upheld.
8. During the year under consideration, the assessee has also claimed travelling expenses amounting to Rs.2,37,701/-. After verification of the details of the trvelling expenses, the AO noticed that the possibility of personal expenses debited under the head travelling expenses cannot be ruled out. The details of the travelling expenses have not been furnished before us. The ad hoc disallowance made by the assessee is approximately 10% of the total expenditure claimed. Considering the facts of the case and in the absence of details of travelling expenses, furnished before us, we do not find any justification to interfere with the order of the lower authorities in this regard.
-3- ITA No.2191/Ahd/2010Accordingly, the disallowance out of the travelling expenses is sustained. Thus ground no.2 of the assesee's appeal is rejected.
9. In result, the assessees's appeal is partly allowed.
Order pronounced in Open Court on 30th November, 2010.
Sd/- Sd/-
(T.K. SHARMA) (G.D. AGARWAL)
JUDICIAL MEMBER VICE-PRESIDENT
Place : Ahmedabad
Date : 30-11-2010
Copy of the order forwarded to:
1) : Appellant
2) : Respondent
3) : CIT(A)
4) : CIT concerned
5) : DR, ITAT.
BY ORDER
DR/AR, ITAT, AHMEDABAD
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