Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, JAIPUR BENCHES, ‘B’ JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1094/JP/2018
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, ‘B’ JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1094/JP/2018 fu/kZkj.k o"kZ@Assessment Year :2014-15 cuke M/s Bansiwala Iron & Steel Rolling The DCIT, Vs. Mills, Sansar Chand Link Road, Jaipur Circle-03, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AADFB2375A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Devang Gargieya (ITP) jktLo dh vksj ls@ Revenue by : Ms. Chanchal Meena (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 28/09/2020 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 07/10/2020 vkns'k@ ORDER PER: VIKRAM SINGH YADAV, A.M.
This is an appeal filed by the assessee against the order of ld. CIT(A)- 01, Jaipur dated 08.08.2018 wherein the assessee has taken following grounds of appeal:- “1. The ld. CIT(A) erred in law as well as on the facts of the case, in partly confirming the order of the AO, sustaining lump sum addition of Rs. 75,000/- as against the addition of Rs. 1,50,000/- made by the AO, out of various expenses i.e. repairs and maintenance stationery travelling advertising and telephone. The disallowance so made and confirmed by the ld. CIT(A), being totally contrary to the provisions of law and facts and hence kindly be deleted in full.
2. The ld. CIT(A) further erred in law as well as on the facts of the case, in confirming the order of the AO, disallowing employees contribution to ESI Rs. 3636/- though the same has been paid within M/s Bansiwala Iron & Steel Rolling Mills, Jaipur Vs. DCIT, Jaipur the same financial year and before the ROI filling and is allowable as held by various courts. The disallowance so made and confirmed by the ld. CIT(A), being totally contrary to the provisions of law and facts and hence kindly be deleted in full.”
2. Ground No. 1 of assessee’s appeal relates to sustenance of disallowance of Rs. 75,000/- as against the addition of Rs. 1,50,000/- made by the AO out of various expenses claimed by the assessee in its profit and loss account. In this regard, the ld. AR submitted that the expenses were fully supported by vouchers and the payments have been made through cheques. It was submitted that the expenses were wholly and exclusively incurred for business purposes and by no stretch of imagination, the expenses can be held as personal in nature. It was further submitted that no such disallowance was made in the earlier years and basis mere allegation and suspicion, disallowance has been made during the impugned assessment year. It was further submitted that no specific finding has been recorded by the Assessing Officer and it is clearly in nature of ad-hoc disallowance. It was further submitted that looking to a huge turnover of assessee, claim of expenditure is otherwise very meager. It was accordingly submitted that disallowance so sustained by the ld. CIT(A) may be deleted.
3. Regarding Ground No. 2, it was submitted that an amount of Rs. 3,636/- on account of employee’s contribution to ESI has been disallowed by the Assessing Officer which has been sustained by the ld. CIT(A). It was submitted that the amount was paid with a delay of one day only and well before the due date of filing of the return u/s 139 of the Act. It was submitted that the issue is now no more res-integra in as much as the same is covered by the decision of Hon’ble Rajasthan High Court in case of CIT vs. SBBJ (2014) 363 ITR 70 (Raj) and CIT vs. Jaipur Vidyut Vitran Nigam Ltd. 2 M/s Bansiwala Iron & Steel Rolling Mills, Jaipur Vs. DCIT, Jaipur (2014) 363 ITR 307 (Raj). It was accordingly submitted that the disallowance so made may kindly be deleted.
4. Per contra, the ld. DR submitted that on examination of books of accounts, the Assessing Officer observed that the expenses were not supported by proper bills, some of the expenses were claimed with handmade slips/bills and some of the payments were made in cash. Further no phone register has been maintained. Therefore, the probability of personal use and non-business use of these expenses cannot be ruled out and expenses cannot be held to be incurred exclusively for business purposes. The AO accordingly disallowed a nominal sum of Rs. 1,50,000/- out of Rs. 14,76,034/- which has been further restricted by the ld. CIT(A) to Rs. 75,000/- and no further relief should be allowed to the assessee. Regarding disallowance of employee’s contribution to ESI, the ld. DR relied on the order of the lower authorities.
We have heard the rival submissions and perused the material available on record. We find that the ld CIT(A) has given a specific finding that number of payments have been made in cash to Navrang Oil Company, Ajmer for which no justification has been furnished by the assessee. Even before us, the said findings of ld CIT(A) remain uncontroverted. Where the assessee claims certain expenditure, the onus is on the assessee to substantiate the same with proper documentation that the same has been incurred wholly and exclusively for purposes of business and in the instance case, where the assessee has failed to substantiate the same, it has to suffer the necessary consequence of disallowance of the said expenditure and the Revenue is left with no option but to disallow the same. Therefore, to the extent of payment made in cash to Navrang Oil Company, Ajmer, the disallowance is upheld and the remaining addition sustained by the ld CIT(A) 3 M/s Bansiwala Iron & Steel Rolling Mills, Jaipur Vs. DCIT, Jaipur is hereby deleted in absence of any specific findings. In the result, the ground is partly allowed.
Regarding ESI contribution where the same has been deposited before the due date of filing of return of income, the issue is no more res integra and covered by the decisions of the Hon’ble Rajasthan High Court in decisions cited by the ld AR and the disallowance so made is hereby deleted.
In the result, the appeal of the assessee is disposed off with above directions.
Order pronounced in the open Court on 07/10/2020.