Commissioner Of Income Tax, Faridabad v. M/S Puneet Udyog, Plot

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 70 of 2009 (O&M)Date of decision: 4.8.2009 Commissioner of Income Tax, Faridabad ......Appellant Vs. M/s Puneet Udyog, Plot NO. 37E, Sector 6, Faridabad. ...Respondent CORAM:-HON'BLE MR.JUSTICE ADARSH KUMAR GOELHON'BLE MRS.JUSTICE DAYA CHAUDHARY PRESENT:Mr.Rajesh Katoch, Sr. Standing Counsel for revenue.Mr.Rajiv Sharma, Advocate, for the respondent.**** ADARSH KUMAR GOEL, J. (Oral) 1.The revenue has preferred this appeal under Section 260A of theIncome Tax Act, 1961 (for short, “the Act”) against the order dated 8.8.2008passed by the Income Tax Appellate Tribunal, Delhi Bench “F” New Delhiin ITA No. 3410/D/2006 for the Assessment Year 2001-02, proposing toraise the following substantial questions of law: (i)“Whether, on the facts and in the circumstancesof the case, the Ld.ITAT is right in law inupholding the order of the Ld.CIT(AS) indeleting the addition of Rs. 6,12,430/- made byAssessing Officer out of total fuel and firewoodexpenses by holding that Assessing Officer wasnot able to bring on record any additionalcircumstances different from the earlier years where such expenditure has been accepted andallowed disregarding the fact that the assesseehas failed to establish the genuiness and identityof the concerned suppliers?” (ii) “ Without prejudice to question No.1, whetheron the facts and in the circumstances of thecase, the Ld. ITAT is right in law in confirmingthe order of the Ld.CIT(A) in deleting theaddition of Rs..6,12, 430/- without consideringthe fact that expenditure of each year has to beestablished by the assessee and suchestablishment is to be based on facts relevant tothat year only.on the facts and in the circumstances of thecase, the Ld. ITAT is right in law in confirmingthe order of the Ld.CIT(A) in deleting theaddition of Rs..6,12, 430/- without consideringthe fact that expenditure of each year has to beestablished by the assessee and suchestablishment is to be based on facts relevant tothat year only. (iii)“ Whether on the facts and in thecircumstances of the case, the Ld.ITAT is rightin law in upholding the order of the Ld.CIT(A)in deleting the addition of Rs.12,84,515/- madeas a disallowance from inward and outwardfreight expenses solely relying on the GRN's(Goods Return Notes) issued by thetransporters, whereas the Assessing Officermade the addition on the basis that no bills wereproduced for such expenses.?”circumstances of the case, the Ld.ITAT is rightin law in upholding the order of the Ld.CIT(A)in deleting the addition of Rs.12,84,515/- madeas a disallowance from inward and outwardfreight expenses solely relying on the GRN's(Goods Return Notes) issued by thetransporters, whereas the Assessing Officermade the addition on the basis that no bills wereproduced for such expenses.?” The assessee is a soap manufacturer. The Assessing Officer disallowed claim of the assessee on account of fuel and firewood expensesand also on account of inward and outward freight expenses. On appeal,the addition made by the Assessing Officer was ordered to be deleted andthe said view was upheld by the Tribunal.On issue of fuel and firewoodexpenses, it was observed: The assessee is a soap manufacturer. The Assessing Officer disallowed claim of the assessee on account of fuel and firewood expensesand also on account of inward and outward freight expenses. On appeal,the addition made by the Assessing Officer was ordered to be deleted andthe said view was upheld by the Tribunal.On issue of fuel and firewoodexpenses, it was observed: “ However, the claim of the assessee forpurchase of firewood was duly supported bydocumentary evidence in the form ofweighment slips and on verification of suchslips produced by the assessee before him, itwas found by the Ld. CIT(A) that theassessee has maintained a comprehensiveand proper record regarding purchase offirewood. At the time of hearing before us,the Ld.DR has not been able torebut/controvert this finding of fact as wellas the other findings recorded by the Ld.CIT(A) while deleting the disallowance madeby the AO out of firewood expenses andthis being so as well as keeping in view allthe facts of the case, we do not find anyinfirmity in the impugned order of the Ld.CIT(A) giving relief to the assessee on thisissue.” On issue of inward and outward freight expenses, it was observed: “ As clearly noted by the ld CIT(A) in hisimpugned order, this entire documentaryevidence filed by the assessee before himwas verified by the ld. CIT(A) and it wasfound by him on such verification thatcomprehensive and systematic record wasmaintained by the assessee to show that thefreight expenses were incurred wholly andexclusively for the purpose of its business.At the time of hearing before us, the ld. DRhas not been able to rebut/controvert thisfinding of fact recorded by the ld.CIT(A) inhis impugned order and this being so as wellas having regard to all the facts ofd the case,we are of the view that the adhocdisallowance made by the AO out of freightexpenses was not sustainable. In that viewof the matter, we uphold the impugned orderof the ld.CIT(A) deleting the saiddisallowance and dismiss ground No.3 ofthe revenue's appeal.” 4.The concurrent findings recorded by the CIT(A) as well as the Tribunal are based on appreciation of evidence. 5.No substantial question of law arises. 6.The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE (DAYA CHAUDHARY)August 4, 2009 JUDGEraghav Note: Whether this case is to be referred to the Reporter? ........Yes/No