Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. N. K. CHOUDHRY & SH. O. P. MEENA
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N. K. CHOUDHRY, JUDICIAL MEMBER AND SH. O. P. MEENA ACCOUNTANT MEMBER I.T.A. No. 794/Asr/2017 Assessment Year: 2013-14
M/s Fairdeal Motors vs. A.C.I.T., Circle-3, Srinagar & Workshop Pvt. Ltd., Parimpora, Srinagar [PAN: AAACF 6573E] (Appellant) (Respondent)
Appellant by : None Respondent by: Sh. Naresh Kumar Bhagat (DR) Date of Hearing: 16.12.2019 Date of Pronouncement: 16.12.2019
ORDER Per O. P. Meena, AM: This appeal by the Assessee is filed against the order of learned Commissioner of Income Tax (Appeals)-2, Jalandhar (Camp Office at Srinagar) dated 24.11.2017 for the Assessment Year 2013-14.
Though the assessee has taken as many as seven number of grounds of appeal, however, in the substance these are against confirmation of disallowance at the rate of 5% out of expenses of Rs.6,144,794/-. As the same are being considered together.
Briefly stated as the facts of the case are that the assessee has debited expenses amounting to Rs.6,144,794/- in the P&L account which were not found
2 ITA No. 794/Asr/2017 (AY 2013-14) M/s Fairdeal Motors & Workshop Pvt. Ltd. v. ACIT supported with proper vouchers. Therefore, the AO has disallowed the 5% of the same which worked out to Rs.3,07,240/- and accordingly made the addition of the same.
Being aggrieved the assessee carried the matter before the CIT(Appeal). However the CIT(Appeal) observed that the disallowance has been made by the AO on account of non production of complete supporting vouchers for the expenses claimed in the P&L account. Therefore, citing various decisions of ITAT Amritsar, disallowance made @ 5% of expenses by the AO was confirmed.
Being aggrieved the assessee filed this appeal before this Tribunal. However, none from the side of the assessee has represented before the tribunal though the hearing was adjourned on 24.10.2019 to 16.12.2019.
Per contra the learned Sr. DR supported the order of the lower authorities.
We have heard the rival submissions and perused the material available on record. However, none for the assessee has appeared before us but it is discernible from the grounds of appeal of the assessee, that the AO made lump sum disallowance at the rate of 5% of the expenses to cover the leakage of the Revenue. However, the AO has not afforded any opportunity of hearing prior to a making such disallowance, whereas the assessee has produced books of account before the AO in which no discrepancy was pointed out by the AO. On going through, the written submission of the assessee, as reproduced in para 10 of the appellate order, we find that the assessee has placed reliance in the case of Ansari Motors of ITAT Amritsar Bench in which similar circumstances, such disallowances of expenses were made as on account of estimated basis were not found sustainable. However, considering the facts that the AO has examined the vouchers produced before him and found that the same are not complete, therefore in the interest of justice and
3 ITA No. 794/Asr/2017 (AY 2013-14) M/s Fairdeal Motors & Workshop Pvt. Ltd. v. ACIT fair play and considering the decision of coordinate Bench of ITAT Amritsar (supra). We restrict the disallowance of the total expenses to 2% of the expenses claimed by the assessee. In view of these facts, the appeal of the assessee is partly allowed.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open court on December 16, 2019
Sd/- Sd/- (N. K. Choudhry) (O. P. Meena) Judicial Member Accountant Member Date: 16.12.2019 /GP/Sr. Ps. Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals), (4) The CIT concerned (5) The Sr. DR, I.T.A.T.