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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: Sh. Amit ShuklaDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the order of ld. CIT(A)-19, New Delhi dated 31.08.2017.
2. Following grounds have been raised by the assessee:
“1. That on the facts and circumstances of the case and the provision of the law the Ld CIT Appeal has failed to appreciate that the assessment order passed by the Ld. AO under Section 143(3) of the Income Tax Act is illegal and bad in law.
That on the facts and circumstances of the case and the provision of the law the Ld CIT Appeal has failed to appreciate that the assessment order being passed by the Ld AO is in violation of the principle of natural 2 Dev Raj Bhaskar justice and hence the said assessment order is bad in eyes of law and liable to be quashed.
3. That on the facts and circumstances of the case and the provisions of law the CIT(A) has erred in sustaining an addition of Rs. 33,10,233/- by wav of disallowance of various expenses.
That the various observations and findings of the Ld AO in the impugned assessment order are irrelevant, unjustified, baseless and vitiated in the law.
That the interest charged u/s 234A, 234-B & 234C is illegal and bad in law and liable to be deleted.”
The appeal filed against the confirmation of addition made by the AO on account of disallowance of various expenses as under:
S.No. Head of the Expense Percentage of Amount disallowance disallowed 1. Mobile, SIM & Recharge 20% 1,44,804 2. Conveyance Expenses 10% 1,37,741 3. Travelling Expenses 10% 1,01,392 4. Office & Miscellaneous 20% 5,73,307 Expenses 3.1 The disallowance on account of Mobile, SIM and Recharge has been reduced from 20% to 10% by the ld. CIT (A). The ld. CIT (A) at para 4.3 has squarely mentioned that the AR of the assessee has agreed to disallowance of 10% of the expenses. Since, the AO has not brought anything on record to prove anything contrary to the explanation of the assessee that the above expenses have been incurred for business purpose and the same are hereby directed to be deleted.
3.2 With record to the donation of Rs.62,000/-, the assessee is hereby directed to produce a receipt giving a details of the 3 Dev Raj Bhaskar approval of the ld. CIT (E) u/s 80G of the recipient before the Assessing Officer.
3.3 The assessee claimed Rs.30,98,352/- as Diwali expenses paid to the employees as cash gifts. The AO found that the expenses were claimed for 310 employees as against 129 employees working with the assessee since the month of November 2012. The AO further observed that out of 129 employees 28 employees have joined in the month of November 2012 and receiving salary between Rs.3500 to Rs.4500. Before the AO, the assessee did not submit the details of the employees to substantiate the claim. Hence, the AO allowed the claim of 129 employees and disallowed the expenses pertaining to 181 employees. The moot reason given by the AO to disallow the expenses pertaining to 181 employees was that they were not employed by the assessee and no proof of employment or payment of cash gifts was provided. On going through the record, we find it would be in the best interest of the revenue and the assessee to accord an opportunity to the assessee to submit all the details before the Assessing Officer to justify the expenses.
3.4 The action of the revenue authorities accepting the contention of the assessee to disallow 10% of the interest on car loan is beyond the provisions of the Act, hence cannot be supported. The disallowance made by the revenue authorities based on the consent of the assessee is hereby directed to be deleted. 4 Dev Raj Bhaskar 4. In the result, the appeal of the assessee is allowed for statistical purposes. Order Pronounced in the Open Court on 06/08/2021.