MESERS CONSTRUCTION ENGINEERS,JAMMU & KASHMIR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3, SRINAGAR

At the outset, it was observed that there is a delay of 185 days in filing of the instant appeal. The assessee has demonstrated that though the impugned order was received by the assessee on 06.07.2016 and the same was handed over to the ld. Counsel of the assessee on dated 07.07.2016, against which, advice was given for filing of appeal by 5th Sep. 2016, however, the situation in the Jammu and Kashmir become worst and a complete shutdown taken place and the assessee has also received grievous injuries in an unfortunate

The Ld. DR on the other hand, though did not refute the claim of the assessee, however submitted that the delay may have occurred due to unavoidable circumstances but still condonation can be subjected to certain conditions.

Having perused the application filed by the assessee and the reasons stated therein, as recoded by us in the aforesaid paras, it is not in controversy that in Jammu & Kashmir specifically in Srinagar any time complete shutdown can happen and the life is not normal as compared to peaceful places, therefore, reasons stated by the assessee seems to be quite reasonable, however, as a caution, we intends to put condition while condoning the delay for the ends of justice, consequently the delay of 185 days in filing of the instant appeal is condoned but subject to deposit of Rs.10,000/- in the Income Tax Department within 30 days of this order, as the assessee has voluntarily offered and agreed.

The factual matrix of the case is that the assessee by way of this appeal challenged the impugned order on following grounds.” “1. The Ld. CIT(A) has erred in law & facts by disallowing Rs.7,00,000/- on account of section 40(a) (ia) of the Income Tax Act, 1961. The disallowance is bad in law and needs to be deleted. (Not Pressed)

Ground No.1 At the time of hearing, the assessee did not raise the ground No.1, hence, does not require any adjudication.

Ground No.2:- By way of Ground No.2, the assessee has challenged the addition of Rs.20,26,445/- u/s 14A of the Act. The contention of the Asseeee is that the assessee during the year relevant year did not earn any exempt income therefore no disallowance u/s 14A is warranted. The Ld. AR has submitted that as per balance sheet, the Asseeee had total current assets of Rs.30,20,56,533/-in the Asst. Year 2011-12, liabilities (Creditors) of Rs.1,18,69,507/-, Net Current Assets of Rs.29,01,87,026/-, Bank Finance of Rs.10,82,43,456/- and Own Contribution of Rs.18,19,43,570/-.

Ground No.3, By way of ground No.3 the assessee has challenged the disallowance of Rs.10,50,630/- on account of printing and stationary charges. The Assessing Officer has observed that during the assessment proceedings, the assessee’s counsel filed reply and vouchers in support of the expenditure, however, it could not produce the evidence/supporting expenditure vouchers to the tune of Rs.10,50,630/-. Consequently, the Assessing Officer disallowed the expenditure of Rs.10,50,630/- under the Act. On appeal, the Ld.

Ground No.4. By way of Ground No.4 the assessee has challenged the addition of Rs.2,29,930/- on account of travelling expenses out of total expenditure of Rs.15,32,873/-. Both the authorities below have observed that the assessee has failed to produce all the bills and some of them were self generated. We observe that the authorities below have pointed out that though the assessee has produced some bills but the same were self generated, however, the assessee could not be produce all the bills, therefore, travel by the partners of the firm cannot be ruled out. In our considered opinion, the authorities below have adopted the usual approach and disallowed the expenditure @ 15% which is quite reasonable. As the assessee has failed to provide all the bills, hence, in our considered view the issue under consideration does not warrant any interference of this Court. Consequently ground No.4 stands dismissed.

In the result, the appeal filed by the assessee stands partly allowed.