M/S RTR DHARUMAIYAN MALLIKA EDUCATIOANL TRUST.,CHENNAI vs. DCIT CPC, DELHI

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ITA 389/CHNY/2023Status: DisposedITAT Chennai31 July 2023AY 2018-20196 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found the assessee's explanation for incurring minor, day-to-day vehicle maintenance expenses reasonable, especially considering the nature of the educational trust. Therefore, the disallowance made by the AO was set aside.

What were the facts?

The assessee, an educational trust, claimed vehicle maintenance expenses of Rs. 3,60,140/- which were disallowed by the AO due to lack of vouchers. The assessee argued these were minor, day-to-day expenses incurred for an educational institution serving a poor community.

What were the issues?

Whether expenses incurred for minor vehicle maintenance, even without vouchers, can be allowed if the explanation is reasonable and the entity is non-profit oriented.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 143(3A),Section 143(3B)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ (SMC

Before: SHRI MAHAVIR SINGH

For Respondent: Shri D. Hema Bhupal, JCIT
Hearing: 03.07.2023Pronounced: 31.07.2023

आदेश आदेश /O R D E R आदेश आदेश This appeal filed by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in order No.ITBA/NFAC/S/250/2022- 23/1049390060(1) dated 03.02.2023. The assessment was framed by the Income Tax Officer, National E-Assessment Centre, Delhi for the assessment year 2018-19 u/s.143(3) r.w.s. 143(3A) & 143(3B) of the Income Tax Act, 1961 (hereinafter ‘the Act’) vide order dated 25.02.2021.

- 2 - ITA No.389/Chny/2023

1.

2. The only issue in this appeal of assessee is as regards to the order of CIT(A) in disallowing the expenses net out of cash amounting to Rs. 3,60,140/- and added the same to the returned income of the assessee. For this, the assessee has raised various grounds, which need not be reproduced.

3. I have heard the rival contentions and gone through the facts and circumstances of the case. I noted that the A.O disallowed the expenses in the absence of vouchers, despite the fact that the third party confirmation was filed by the assessee in regard to additional expenses under the head “vehicle maintenance charges at Rs.1,50,000/-” and thereby, out of the total expenses of Rs. 4,93,460/-, the A.O allowed only Rs. 1,33,500/- being proof of payment and disallowed the balance. The assessee before A.O as well as before CIT(A) contended that all these vehicle maintenance charges are incurred in relate to minor and paid expenses on day to day basis. The assessee is running an educational institution and is a non-profit oriented entity. Its main objective is to promote education to children the economically poor and down trodden section of the society in a very remote and interior part of a village Thethakudi, which is situated near Vedaranyam, a coastal area of Nagapattinam District. The village has a total population of 7695 people.

For the year under scrutiny, the assessee, disclosed gross receipts of - 3 - Rs. 49,25,049/- and claimed an expenditure of Rs. 53,65,092/- in the return of income. I noted that once the assessee’s case is clear cut, the claim of expenditure of Rs. 53,65,092/- out of which paid expenses of Rs. 3,60,140/- could not be vouched, because paid expenses of minor maintenance of vehicles. I find the explaining as reasonable and hence, allow the expenses.

4. In the result, the appeal filed by the assessee is allowed

Order pronounced on 31st July, 2023 at Chennai.

Sd/- (महावीर �सह ) (MAHAVIR SINGH) उपा�य� /VICE PRESIDENT चे�ई/Chennai, �दनांक/Dated, the 31st July, 2023 EDN आदेश क� �ितिलिप अ!ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु# /CIT 4. िवभागीय �ितिनिध/DR 5. गाड' फाईल/GF.

आयकर अपीलीय अिधकरण, ‘बी’ (एस एम सी) �यायपीठ,चे�ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ (SMC) BENCH, CHENNAI �ी महावीर �सह, उपा�य� के सम� BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT आयकर अपील सं./ITA No.: 389/CHNY/2023 िनधा�रण वष�/Assessment Year: 2018-19

M/s. RTR Dharumaiyan The Addl./Joint/Deputy/ Mallika Educational Trust, Vs. Asst. Commissioner of C-125, Kurunji Nagar, Income Tax / Income Tax Ramapuram, Officer, Chennai -600 089. National E-Assessment Centre, Delhi. PAN:AABTR 9434J (अपीलाथ�/Appellant) (��यथ�/Respondent)

अपीलाथ� क� ओर से/Appellant by : Shri K.R. Sudersan, CA ��यथ� क� ओर से/Respondent by : Shri D. Hema Bhupal, JCIT

सुनवाई क� तारीख/Date of Hearing : 03.07.2023 घोषणा क� तारीख/Date of Pronouncement : 31.07.2023

आदेश आदेश /O R D E R आदेश आदेश This appeal filed by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in order No.ITBA/NFAC/S/250/2022- 23/1049390060(1) dated 03.02.2023. The assessment was framed by the Income Tax Officer, National E-Assessment Centre, Delhi for the assessment year 2018-19 u/s.143(3) r.w.s. 143(3A) & 143(3B) of the Income Tax Act, 1961 (hereinafter ‘the Act’) vide order dated 25.02.2021.

- 2 - ITA No.389/Chny/2023

2.

The only issue in this appeal of assessee is as regards to the order of CIT(A) in disallowing the expenses net out of cash amounting to Rs. 3,60,140/- and added the same to the returned income of the assessee. For this, the assessee has raised various grounds, which need not be reproduced.

3.

I have heard the rival contentions and gone through the facts and circumstances of the case. I noted that the A.O disallowed the expenses in the absence of vouchers, despite the fact that the third party confirmation was filed by the assessee in regard to additional expenses under the head “vehicle maintenance charges at Rs.1,50,000/-” and thereby, out of the total expenses of Rs. 4,93,460/-, the A.O allowed only Rs. 1,33,500/- being proof of payment and disallowed the balance. The assessee before A.O as well as before CIT(A) contended that all these vehicle maintenance charges are incurred in relate to minor and paid expenses on day to day basis. The assessee is running an educational institution and is a non-profit oriented entity. Its main objective is to promote education to children the economically poor and down trodden section of the society in a very remote and interior part of a village Thethakudi, which is situated near Vedaranyam, a coastal area of Nagapattinam District. The village has a total population of 7695 people.

For the year under scrutiny, the assessee, disclosed gross receipts of - 3 - Rs. 49,25,049/- and claimed an expenditure of Rs. 53,65,092/- in the return of income. I noted that once the assessee’s case is clear cut, the claim of expenditure of Rs. 53,65,092/- out of which paid expenses of Rs. 3,60,140/- could not be vouched, because paid expenses of minor maintenance of vehicles. I find the explaining as reasonable and hence, allow the expenses.

4.

In the result, the appeal filed by the assessee is allowed

Order pronounced on 31st July, 2023 at Chennai.

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