TaxTMI 
TaxTMI 
2013 (8) TMI 143
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....nbsp; (b) it does not consider the evidences led by the appellant in support of its claim; and (c) it is contrary to facts on record?" 2. Only one issue is involved in this appeal namely, that of disallowing of rent amount of Rs.72.48 lakhs allegedly expended by the assessee for the purpose of hiring godown from one M/s. Coastal Roadways Ltd. Assessee is in the business of manufacturing and also exporting certain items including Soya Deoiled cake. Case of the assessee was that the assessee had received contracts for exporting a total of 7500 metric tonnes of such product for which the assessee required to procure and store soyabean before the same was processed and deoil cake was prepared. For such purpose the assessee entered into an agreement with said M/s. Coastal Roadways Ltd on 13.9.1991. As per such agreement M/s. Coastal Roadways Ltd. agreed to provide a total of of 3,25,000 sq. ft. of godown space at Ahmedabad, Junagadh, Jamnagar and Gandhidham for a period of six months between 1.9.1991 to 31.3.1993. The assessee agreed to pay service charge at the rate of Rs.4 per sq. ft. per month. Assessee for the said period paid a sum of Rs.72.48 l....
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....bsp; ix. All the vouchers prepared by the one and the same person in which the narration of the voucher in the godown rent account. There is no mention about other services being rendered. In some of the bills prepared by the CRL the year mentioned is 1993 which has been subsequently corrected as 1991. x. Though the assessee was required to make the payment in April, 1993 i.e. after a period of six months, the CRL no such payments were made. Supportingly, the CRL also did not write any letter till No.93. The return of income was also filed by Nov'93, though the return was due in December'92. The first payment for the godown rent was made by cheque only in September'93. xi. Though the assessee had tried to show that in anticipate of export/business in Soyabin DOC it wanted to hire this godowns but the fact remains for the contract of export of only about 7,500 metric tonnes but assessee hired godowns at 4 different places in Gujarat admeasuring 3,25,000 sq. ft. though a payment of rent of about 72 lacs for six months alone and surprisingly he never executed the export orders. xii. The assessee's sist....
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....td v. CIT reported in 108 CTR 390 to grant relief and the said decision squarely applies to the facts of the instant case. On the other hand the Ld DR strongly relied upon the assessment order and the written submissions filed by the Department. 5. We have heard the rival contentions and carefully perused the record. On a careful consideration of the arguments of the counsel and the record, we are of the view that the dispute is with regard to the genuineness of the impugned expenditure claim and not about the "necessity of incurring the impugned expenditure. As per the main finding of the A.O. on the impugned issue, which are extracted in para 2 supra, M/s. Coastal Roadways Ltd was neither the owner nor in possession of the godowns, which he has offered to provide to the assessee. We are unable to understand how a person could offer any thing, which he does not possess at all. We are also doubtful, whether a prudent businessman would enter into an agreement for a non-existent Godown and also agree to make payment of Rs.72.48 lakhs as Godown rent to a person, who does not have the required infrastructure facility. The Ld. A.R. has relied upon various doc....
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....nce for booking the godown space and making payments for the same even though the export orders did not materialise. He submitted that there was voluminous evidence before the Assessing Officer to show that the assessee actually had certain export obligations. However, on account of high cost of raw materials, same could not be executed. Arbitration proceedings have commenced for failure on part of the assessee to complete the export obligations. CIT(Appeals) had correctly examined and appreciated the evidence on record. The Assessing Officer as well as the the Tribunal both put undue importance on payment being made without availing the facility of storage. Counsel submitted that export turnover was likely to touch Rs.20 crore. Expenditure incurred was thus reasonable and genuineness thereof was established through documents on record. 6. From the record however, we notice that the agreement between the assessee and M/s. Coastal Roadways Ltd. recorded that M/s. Coastal Roadways Ltd. claimed to be the owner/hirer of certain godowns or warehouses at Ahmedabad Junagadh, Jamnagar and Gandhidham. Agreement also recorded that the list of such godowns/warehouses is attached as Schedul....