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Income Tax Appellate Tribunal, JABALPUR BENCH, JABALPUR
O R D E R PER OM PRAKASH KANT, A.M.: This appeal by the assessee is directed against order dated 07.11.2022 passed by Ld. Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi [in short “Ld.CIT(A)”] for assessment year 2016-17, raising following grounds:
1. “On the facts and in the circumstances of the case, the order of the ld. CIT(A) in confirming the disallowance of Rs. 6,65,611/- out of expenses claimed at Rs. 30,06,487/- from gross commission receipts of Rs 58,52, 189/- is unjustified, unwarranted, arbitrary, excessive and against the principles of natural justice.
Dushyant Singh vs DCIT 2. On the facts and in the circumstances of the case, the authorities below failed to appreciate that the entire expenses claimed at Rs. 30,06,487/- was wholly and exclusively laid out for business purposes and therefore, allowance of 40% of the receipts as expenses is unjustified and unwarranted and based on conjectures and surmises and therefore, the disallowance of Rs. 6,65,611/- deserves to be deleted in toto.
3. The appellant craves leave to add, alter or modify any grounds of appeal
at the time of hearing.”
2. Briefly stated facts of the case are that the assessee filed return of income for the year under consideration on 21.01.2017, declaring total income of Rs.2,00,10,700/-. The assessee derives income from proprietorship concern M/s. R.R. Automobiles dealing in Tata Motors passenger cars, spares and accessories along with salary income in share of profit from partnership firm etc. The return of income of the assessee was selected for scrutiny and statutory notices under the Income Tax Act, 1961 (in short “the Act”) were issued and complied with. In the course of scrutiny proceedings, the Assessing Officer (in short “AO”) noticed receipt of commission amounting to Rs.58,52,189/- from Oriental Insurance Co. Ltd. and against which the assessee claimed expenses of Rs.30,06,487/- and declared income of Rs.28,45,702/- from the commission under the head ‘income from other sources’. The Dushyant Singh vs DCIT assessee failed to produce vouchers of the expenses in support of the claim of the expenditure before the AO and therefore, he allowed 40% of the total receipt as expenses and made disallowance of Rs.6,65,611/-. On further appeal, the assessee failed to produce any documentary evidences before Ld.CIT(A) in support and therefore, he upheld the disallowance.
We have heard Ld. Authorized Representatives of the parties on issue in dispute and perused the relevant material available on record. We find that the assessee claimed following expenses against the commission income of Rs.58,52,189/- from Oriental Insurance Co. Limited:-
Sl.No. Particulars of expense Amount 1. Mob & Telephone Rs.3,48,511/- charges 2. Salary & Wages Rs.12,96,436/- 3. Travelling expense Rs.5,12,131/- 4. Stationary & Printing Rs.1,80,572/- 5. Discount Exp. Rs.1,05,121/- 6. Customer Entertainment Rs.1,10,560/- 7. Local conveyance Rs.1,12,624/-
We find that the assessee not only failed to produce any vouchers of the expenses claimed against the commission income before the AO and Ld.CIT(A) but before us also, no vouchers in support of the expenses are filed. In the facts and circumstances of the case, the claim of the Ld. Counsel for the assessee for Dushyant Singh vs DCIT restricting the disallowance to the 10% of the expenses, is not justified. In our opinion, the lower authorities are very much reasonable in disallowance of almost 20% of the expenses claimed by the assessee. We accordingly, uphold the order of lower authorities. The Grounds raised by the assessee are thus, dismissed.