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Income Tax Appellate Tribunal, AGRA BENCH: AGRA
Before: SHRI LALIET KUMAR,AND DR. MITHA LAL MEENA
Per LALIET KUMAR, J.M.:
The present appeal is being filed by the assessee feeling aggrieved by the
order dated 31.10.2017 for Assessment Year 2014-15 raising the following grounds:
“1. BECAUSE, the Ld CIT(A) was highly unjustified in confirming ad-hoc disallowance of Rs. 3,48,641/- ignoring the legal position that ad-hoc disallowance has no approval in law.
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BECAUSE, while confirming the disallowance Ld CIT(A) omitted to consider that ad-hoc disallowance was uncalled for under the facts as there is no allegation that either the expenses debited are bogus, or not incurred for the purpose of business. Books of Accounts of the ‘appellant’ are audited and appellant has shown better profit in the year under consideration as compared to preceding years where assessments were framed under section 143(3) of the Act.
BECAUSE, while confirming the action of the AO in making ad-hoc disallowance the Ld CIT(A) wrongly observed that AO is not expected to identify the incomplete bills and self made vouchers while making disallowance.
BECAUSE, in any view of the matter order passed and sustained by Ld CIT(A) is bad under the facts & in law.”
The AO in paragraph 4 of the order has made the disallowance at the rate of 20% of the total expenses, voucher which were either incomplete or self made in quantified the same at Rs.3,48,641/-. Feeling aggrieved by the order the assessee filed an appeal before the ld. CIT(A) and the ld. CIT(A) in paragraph 6.3 had upheld the disallowance made by the AO.
Now the assessee is in appeal before us on account of above said disallowance made by the lower Authorities.
At the outset, it was submitted that the Tribunal in various judgments has held that the disallowance made on lumpsum basis of the expenses is not
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permissible in law without specifically pointing out the errors in the books of account, vouchers and bills.
In the present case, it was submitted that the disallowance of Rs.3,48,641/- was made by the AO by applying the 20% of the total vouchers which were allegedly incomplete/ self sustaining. It was submitted that though the case of the assessee is covered in favour of the assessee by the decision of the co-ordinate bench in the matter of ‘ITO vs M/s Atul Construction Company’ ITA No.361/Agra/2013 and C.O. No. 01/Agra/2014 for A.Y. 2010-11 and ‘Animesh Sadhu vs. ACIT’ in ITA No.11/Kol/2013 for A.Y.2008-09, however, with a view to buy peace and to give end to the litigation the assessee voluntary agreeing for disallowance for a reasonable amount by this Tribunal, deem appropriate.
On the other hand the ld. DR, reiterated and relied upon the decision of the AO/CIT (A) and further relied upon the decision in the matter of M/s Ashok Kumar Gulshan Rai vs. CIT, Ajay Kapoor vs. CIT 93 taxmann.com 433 and Tara Singh vs. ITO 81 taxmann.com 293.
We have heard, the rival contention the parties and perused the record. The ld. AR has fairly submitted and that reasonable disallowance be made against the amount of Rs.3,48,641/-, despite the fact the case of the assessee is covered in his favour by the decision of the coordinate bench. Considering totality of circumstances and assessee voluntary agreed for some disallowance, Bench had
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proposed the total disallowance of Rs.1,50,000/- at against Rs.3,48,641/- to the
parties before us had agreed. In view of the above, and more particularly the fact
that there is a decisions of the coordinate bench against the revenue and with a
view to give quietus to the litigation, we partly allowed the appeal of the assessee
thereby deleting the disallowance to an amount of Rs.2 lac and confirming the
disallowance to an amount of Rs.1,48,641/-. Needless to say, the above said relief
have been granted to the assessee on account of the concession given by the
counsel for the assessee and hence the decision of this Tribunal in the present case
shall not be treated as binding precedent, as it has been delivered in peculiarity of
fact.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open court on 12/07/2019.
Sd/- Sd/- (Dr. M.L. MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKV* Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT AGRA