DR. LATHA,THOOTHUKUDI vs. DCIT, CIRCLE-1,, TIRUNELVELI

ITA 768/CHNY/2026Status: DisposedITAT Chennai15 July 2026AY 2018-194 pages

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee provided sufficient documentary evidence (ledger accounts and sample vouchers) to justify the increase in bhatta expenses for extra staff time. It also found that the rent payments were justified as the recipient had offered the income, thus setting aside the disallowances.

What were the facts?

The assessee's appeal concerned disallowances for bhatta and rent expenses. The Assessing Officer (AO) and CIT(A) disallowed these expenses due to lack of explanation and documentary evidence regarding the increase in bhatta expenses and the nature of rent payments.

What were the issues?

Whether the disallowance of bhatta expenses due to an increase compared to the previous year was justified without considering subsequent evidence. Whether the disallowance of rent expenses was justified when the recipient had declared the income.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned

AI-generated summary — verify with the full judgment below

Before: SHRI SS VISWANETHRA RAVI & MS. PADMAVATHY.S

For Appellant: Mr. K. Balasubramanian, Advocate

Hearing: 02.06.2026Pronounced: 15.07.2026

आयकरअपीलीयअिधकरण, ’ए’ �ायपीठ,चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI �ीयस यस िव�ने� रिव, �ाियक सद� एवं सु�ीपदमावती यस, लेखा सद�के सम� BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND MS. PADMAVATHY.S, ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No. 768/Chny/2026 िनधा�रणवष�/Assessment Year: 2018-19 Dr. Latha, Vs. The DCIT, 9/22.G.K.Nagar, IIIrd st., Kovilpatti, Circle 1, Thoothukudi, Tamil Nadu, Tirunelveli. 628501. [PAN: ACFPL3755L] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ�कीओरसे/ Appellant by : Mr. K. Balasubramanian, Advocate ��थ�कीओरसे/ Respondent by Mr. L. Christopher Vasanth, JCIT : सुनवाईकीतारीख/Date of hearing : 02.06.2026 घोषणाकीतारीख /Date of Pronouncement 15.07.2026 : आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 18.12.2025 passed by the ld. Commissioner of Income Tax (Appeals), Chennai-18 for the assessment year 2018-19.

Ground No. 1 raised by the assessee challenges the action of the ld. CIT(A) in confirming the disallowance made by the AO on account of the claim of bhatta expenses. We note that the AO proceeded to add an

2 ITA No. 768/Chny/2026 amount of Rs.7,61,404/- for the year under consideration on a comparison with the same kind of expenses for AY 2017-18. We find that admittedly no reply was given by the assessee in respect of the question raised by the AO regarding the reasons for the increase in bhatta expenses for the year under consideration as compared to earlier AY 2017-18, which is evident from para No. 13 of the assessment order. Before the ld. CIT(A), it is noted that the said disallowance was confirmed in the absence of any documentary evidence, which is evident from para No. 55 of the impugned order. Before us, the details of the ledger account of expenses are filed from page Nos. 3 to 27 and sample vouchers for 3 months are filed from page Nos. 28 to 40. On perusal of the ledger account from page Nos. 3 to 27 of the paper book, it is noted that the bhatta expenses were incurred on staff travel and cleaning, wherein the case of the Revenue is as to why the said expenditure increased as compared to earlier AY 2017-18. Further, on an examination of the sample vouchers for the months of April, May, and June, 2017, it was explained that the payment of the said bhatta was for extra time. Admittedly, this documentary evidence was not before the AO and the ld. CIT(A); however, on an examination of the ledger account as well as the sample vouchers for three months, which are from page Nos. 3 to 40 of the paper book, we are of the considered opinion that the assessee is

3 ITA No. 768/Chny/2026 able to show the increase in bhatta expenses towards staff travel and cleaning for discharging their duties for extra time. Therefore, the order of the ld. CIT(A) is not justified in confirming the order of the AO for making the addition on the ground of the increase as compared to the earlier assessment year. Thus, the order of the ld. CIT(A) is set aside and Ground No. one raised by the assessee is allowed.

Ground No. 2 raised by the assessee challenges the action of the ld. CIT(A) in confirming the addition on account of rent expenses. On perusal of the assessment order at para No. 5, we note that the show- cause notice was issued to the assessee, requesting to submit an explanation regarding the rent expenses, wherein, according to the AO, no response was made. We find that it was similar before the ld. CIT(A). Before us, the assessee placed on record the ledger account of the assessee in the books of Sri Hospital, wherein the rent was paid to Dr. Venkatesh, who is the owner of the said hospital, at the rate of Rs.15,000/- per month. Further, we note that the rent was paid to N.K. Mahal through cheque. We find that the payments to Dr. Venkatesh were made by cash, whereas the payments to N.K. Mahal were made through cheque. Further, we find that the said Dr. Venkatesh offered the said rental income under the head "Other Income" in the return of income,

4 ITA No. 768/Chny/2026 which is clear from page No. 46 of the paper book. Therefore, when the said amount was accepted by the owner of the said building as income, in a sense, the disallowance made in the hands of the assessee is not justified and, accordingly, the order of the ld. CIT(A) is set aside. Thus, Ground No. 2 raised by the assessee is allowed.

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

Order pronounced on 15th July, 2026 at Chennai.

Sd/- Sd/- (S. PADMAVATHY) (S.S. VISWANETHRA RAVI) Accountant Member Judicial Member

Chennai, Dated: 15.07.2026 MM आदेशकी�ितिलिपअ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent, 3. आयकरआयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय�ितिनिध/DR & 5. गाड�फाईल/GF.

Digitally signed MANISH by MANISH MISHRA MISHRA Date: 2026.07.16 17:42:33 +05'30'

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