Kitex Garments,, Cochin vs Department Of Income Tax

1 ITA No.75/Coch/2012

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN

Before Shri N.R.S. Ganesan (JM) and Shri Chandra Poojari (AM)

I.T.A No. 75/Coch/2012 (Assessment year 2008-09)

ACIT, Cir.1(2) vs Kitex Garments Ltd Kochi Kitex House, Ernakulam PAN : AABCK0714F (Appellant) (Respondent)

Appellant by : Shri K.K. John Respondent by : Shri R Krishna Iyer

Date of hearing : 01-12-2014 Date of pronouncement : 09-01-2015

ORDER

Per N.R.S. Ganesan (JM)

This appeal of the revenue was disposed of earlier by an order

dated 31-12-2013. However, the assessee filed miscellaneous application

in M.A. No.32/Coch/2014 on the ground that ground No.3 raised by the

revenue with regard to disallowance of expenses on purchase of water

was not disposed of. Accordingly, the appeal of the revenue was

reopened only for the purpose of disposing of ground No.3 i.e. the issue

relating to expenses for purchase of water and posted for hearing only for

disposal of ground No.3.

2 ITA No.75/Coch/2012

2. Shri K.K. John, the ld.DR submitted that the assessee claimed

Rs.28,97,041 as expenditure. The auditors in the audit report certified that

the assessee has not deducted tax. Accordingly, the assessing officer

disallowed the claim of the assessee to the extent of Rs.28,97,041.

However, on appeal, the assessee explained before the CIT(A) that the

expenditure to the extent of Rs.23,85,100 represents payment made for

supply of water. After considering the contention of the assessee, the

CIT(A) allowed the claim of the assessee to the extent of Rs. 23,85,100;

however, confirmed the addition to the extent of Rs.5,11,941. According to

the ld.DR, the (CIT(A) ought not have allowed the claim of the assessee.

3. On the contrary, Shri R Krishna Iyer, the ld.representative for the

assessee submitted that the assessee purchased water for running the

canteen. Out of the total sum of Rs.28,97,041 a sum of Rs.23,85,100

relates to expenditure for purchase of water. The payments were made to

M/s AMA Transport, Pattimattom. Payments were also made to Shri A.

Rasheed and Shri Badhar. According to the ld.representative, the

assessee has filed specimen bills before the CIT(A), who examined the

same thoroughly, which contained the details of payment of water charges,

lorry No.etc. The copy of the trip sheet of the lorry was also furnished

before the CIT(A). The CIT(A), after examining the same has allowed the

claim of the assessee to the extent of Rs. 23,85,100. 3 ITA No.75/Coch/2012

4. We have considered the rival submissions on either side and also

perused the material available on record. The assessing officer disallowed

the claim of the assessee on the basis of the audit report said to be filed by

the assessee. The assessing officer has not examined the nature of the

payment. However, the CIT(A) examined the nature of the payment made

by the assessee and found that what was paid by the assessee is only

payment towards water supply. The CIT(A) has also examined specimen

copies of the bills filed by the assessee which contained the details of

payment for water charges with reference to lorry No., etc. Further, the

CIT(A) has also examined the copies of the trip sheets filed by the

assessee. Therefore, it is obvious that what was paid by the assessee to

the extent of Rs.23,85,100 is only for payment towards purchase of water

for running the canteen. All payments relating to water charges does not

require any deduction of tax at source, therefore, there is no question of

disallowance of Rs.23,85,100. Therefore, this Tribunal is of the considered

opinion that the CIT(A) has rightly deleted the disallowance to the extent of

Rs.23,85,100 and confirmed the disallowance to the extent of Rs.5,11,941.

The ground of the revenue fails.

5. The order of the Tribunal dated 31-12-2013 in respect of other

issues remains as such.

4 ITA No.75/Coch/2012

6. In the result, the appeal of the revenue stands dismissed.

Order pronounced in the open court on this 09th January, 2015.

Sd/- sd/- (Chandra Poojari) (N.R.S. Ganesan) ACCOUNTANT MEMBER JUDICIAL MEMBER

Cochin, Dt : 09th January, 2015 pk/- copy to: 1. ACIT, Cir.1(2), Kochi

2. Kitex Garments Ltd, Kitex House, P.B. No.5, Kizhakkambalam, Choorakodu, Ernakulam 683 562

3. The Commissioner of Income-tax, Kochi

4. The Commissioner of Income-tax(A)-II, Kochi

5. The DR (True copy) By order

Asstt. Registrar, Income-tax Appellate Tribunal, Cochin Bench