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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI
Before: SHRI B.R.R. KUMAR & SHRI ANUBHAV SHARMA
O R D E R PER ANUBHAV SHARMA, J. M.:
1.
The appeal has been preferred by the Assessee against the order dated 15/03/2019 of Ld Commissioner of Income Tax (Appeals)-20, New Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. „FAA‟) in appeal No. 10197/2017-18 arising out of an appeal before it against the order dated 15.12.2017 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as „the Act‟) passed by the ld. Assessing Officer, Deputy commissioner of Income Tax, Circle-62(1), New Delhi (hereinafter referred as the Ld. AO).
2. The facts in brief are that the Assessee filed return of income declaring income of Rs. 1,00,43,220/-, which was selected for scrutiny and notice u/s 143(2) followed by notice u/s 142(1) of the Act were issued and based upon verification of the bills, vouchers, Page | 1 muster-rolls, wage sheets etc the income of the Assessee was recomputed by the Ld. AO as follows:- Subject to above discussions, the income of the assessee is recomputed as under: S.No. Particulars (Amount in ?) Income as per computation filed by 1,00,43,220/- the assessee I. Disallowance on account of 4,00,000/- Unverifiable Transportation & Truck Operation Expenses II. Disallowance on account of 2,00,000/- Travelling Expenses III. Disallowance out of Salaries & 1,00,000/- Allowances IV. Disallowance on account of Business 1,00,000/- Promotion Expenses V. Disallowance out of Repair & 1,32,363/ Maintenance - Vehicle VI. Disallowance on account of 1,12,674/ Telephone/Mobile Expenses Total disallowance 10,45,037/- Total Income 1,10,88,257/- Rounded off 1,10,88,260/-
In appeal, the ld. First Appellate Authority had deleted the additions of Rs. 4 lakhs on account of unverifiable transportation expenses and truk operation expenses, Rs. 1 lakh on account of salaries and allowances, and Rs. 1 lakh on account of business promotion expenses. However, the remaining additions made by the Ld. AO were sustained.
Arguments were heard and record was perused. On behalf of the Assessee it was contended that the ld AO and the Ld CIT(A) have fallen in error in making dis-allowances on ad hoc basis in regard to the expenditure which was specifically explained and were normal business expenses. It was submitted that no dis-allowances can be made unless specific defect is pointed out. It was submitted that dis- allowance were made merely to prevent leakage of revenue and same has no legal foundation. Ld. Counsel submitted that for Page | 2 Assessment Year 2014-15 and 2013-14 such ad hoc dis-allowances were set aside by the Ld. CIT(A) in Assessee‟s own case. 5. On the other hand the Ld. DR supported the findings of the tax authorities submitting that the orders are well reasoned. 6. The Assessee has come in appeal before the Tribunal raising following grounds of appeal:-