M/S NEERAJ ENTERPRISES,GARHWA vs. ITO,WARD-3(5), DALTONGANJ

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ITA 58/RAN/2019Status: DisposedITAT Ranchi04 March 2020AY 2013-142 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed a partial relief on the disallowance of expenses, reducing it to Rs. 1 lakh. However, the addition for unverifiable sundry creditors was upheld as the assessee failed to prove their genuineness.

What were the facts?

The assessee's appeal for AY 2013-14 challenged estimated disallowances of expenses and additions for unverifiable sundry creditors. The assessee did not appear for the hearing, and the matter proceeded ex parte.

What were the issues?

Whether the disallowance of expenses was justified and if unverifiable sundry creditors should be added to the income.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RANCHI BENCH “SMC” RANCHI

Before: Shri S.S, Godara

(Oral) This assessee’s appeal for assessment year 2013-14, arises against the Commissioner of Income-tax (Appeals)-Ranchi’s order dated 29.09.2017 passed in case No.CIT(A), Ranchi/10104/2016-17, involving proceedings u/s. 143(3) of the Income Tax Act, 1961; in short ‘the Act’.

2.

Case called twice. None appears at assessee’s behest. The registry has already sent an RPAD notice dated 12.02.20 for today’s hearing. It is accordingly proceeded ex parte. I have heard Shri Ajoy Kumarl, Addl. CIT-DR and perused the case file.

3.

The assessee’s former substantive grievance challenges correctness of estimated 5% disallowance of various expenses totaling to Rs.1,01,02,524/-; coming to Rs.5,05,126/- made in both the lower authorities proceedings. Learned departmental representative fails to dispute that neither the lower authorities have rejected assessee’s corresponding details per se since they have accepted the remaining 95% component nor the taxpayer has satisfactorily discharged its onus of proving the same

ITA No.58/Ran/2019 A.Y 2013-14 M/s Neeraj Enterprises Vs. ITO Wd-3(5) Daltongonj Page 2 to have been incurred whole and exclusively for the purpose of the business. I deem it appropriate in these facts and circumstances that a lump sum addition disallowance of Rs.1 lakh only out that made in the lower proceedings of Rs.5,05,126/- shall meet the ends of justice. The assessee gets part relief of Rs.4,05,126/-.

4.

Next comes unverifiable sundry creditors disallowance(s) / addition(s) of Rs.31,26,054/- made in both the lower authorities proceedings on account of assessee’s failure in proving the corresponding forty six parties. Learned lower authorities appear to have afforded sufficient opportunities to the assessee, coupled with the fact that the corresponding notices issued u/s. 133(6) of the Act also could not be served on them. I conclude in these facts and circumstances that both the lower authorities have rightly treated the impugned sundry credits as liable to be added since remaining unverifiable. The assessee fails in the instant latter substantive ground therefore.

5.

This assessee’s appeal is partly allowed in above terms. Order pronounced in open court at the close of hearing on Wedne ay, 4th March, 2020 ("या यक सद#य) *Dkp/Sr.PS %दनांकः- 04/03/2020 रांची आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-M/s Neraj Enterprises Sahijana Garwah, Jharkhand-822114

2.

""यथ"/Respondent-ITO Wd-3(5), Daltonganj 3. संबं)धत आयकर आयु,त / Concerned CIT 4. आयकर आयु,त- अपील / CIT (A) 5. -वभागीय " त न)ध, आयकर अपील"य अ)धकरण रांची / DR, ITAT, Ranchi 6. गाड1 फाइल / Guard file. By order/आदेश से, // Sr. Private Secretary/P.S (on Tour) आयकर अपील"य अ)धकरण, रांची ।

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