MADHUKAR MURLIDHAR KALE,NASHIK vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 1, NASHIK

आदेश / ORDER

PER PARTHA SARATHI CHAUDHURY, JM :

This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeal)-1, Nashik dated 15.05.2018 for the assessment year 2013-14 as per following grounds of appeal on record:

“On facts and in law, 1) The assessee submits that the notice U/s.148 issued in the instant case is bad in law and hence, the reasst. order passed U/s.147 r.w.s.143(3) may be declared as null and void. 2) The learned CIT(A) erred in confirming the ad-hoc disallowance of expenses of Rs.2,27,424/- out of the total disallowance of

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Rs.4,54,848/- made by the A.O. without appreciating that the said disallowance made purely on ad-hoc basis was not warranted on facts of the case. 3) The learned CIT(A) failed to appreciate that considering the nature of business and turnover of the assessee and further considering the nature of expenditure, the assessee could not have been expected to maintain third party bills in respect of the impugned expenses and hence, there was no reason to make any ad-hoc disallowance in respect of the said expenditure merely because the same were supported by self-made vouchers. 4) The appellant craves, leave to add, alter, amend and delete any of the above grounds of appeal.”

not pressing ground No.1. Therefore, ground No.1 is dismissed as ‘not

pressed’.

subject matter for adjudication. Grounds No. 2 and 3 relates to the ad-hoc

disallowance of expenses upheld by the Ld. CIT(Appeal) of Rs.2,27,424/- out

of the total disallowance of Rs.4,54,848/- made by the Assessing Officer.

total direct expenses of Rs.42,64,121/- and indirect expenses of

Rs.9,60,972/-, both aggregating to Rs.52,25,093/-. Out of the total

expenditure claimed, expenses only to the extent of Rs.6,13,597/- are

incurred in cash. Out of the said cash expenditure of Rs.6,13,597/-, expenses

to the tune of Rs.5,68,560/- is supported by self made vouchers. The

assessee further submitted that Rs.10,00,000/- was offered during the

course of survey proceedings by the member of the HUF who happens to be

the son of the assessee. The assessee has further submitted the

breakup of various expenses debited by way of self made vouchers, bills

and by way bank entries. The statement was made by member of the

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HUF, the assessee and the same has not been disputed. Further, on

verification of the assessee's submission, it is found that to a certain

extent the assessee's contention are correct that the expenses incurred

through self made vouchers total to Rs.5,68,560/-. The Assessing Officer

looking into the nature of expenses and very fact that three

concerns are run from the same premises, which leave open the chances

of multiple debits of the same expenditure, the assessee's claim of the

total amount being proper and representing the current debit was not

acceptable to the Assessing Officer. The Assessing Officer, thereafter,

allowed 20% of the cash expenditure incurred through self made vouchers

of total amount of Rs.5,68,560/- i.e. Rs.1,13,712/-. However, the

Assessing Officer added 80% of the impugned expenses of Rs.5,68,560/-

i.e. Rs.4,54,848/- to the total income of the assessee.

on record restricted the disallowance to 40% of the impugned expenditure

of Rs.5,68,560/- and therefore, before us, the disputed addition is

Rs.2,27,424/-.

consideration to the submissions of the parties herein and analyzed the

facts and circumstances. The Assessing Officer added 80% of the

impugned expenses of Rs.5,68,560/- i.e. amounting to Rs.4,54,848/- on

the ground that there was three concerns run from the same premises

and there may be possibility of multiple debits of the same expenditure.

addition is of Rs.2,27,424/- of the impugned expenditure of

Rs.5,68,560/-. We do not find any specific reasons by the Revenue

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Authority neither any independent enquiry through which this addition has been made. However, looking on the nature of business of the assessee who is builder and land developer and also because of the fact that from self made vouchers, we cannot understand whether those expenses are 100% genuine or not. Therefore, taking totality of facts and circumstances into consideration and bona-fide intention of the assessee in this case, we find 40% addition is on the higher side and therefore, we restrict the addition to 20% of the said impugned expenditure and direct the Assessing Officer to provide appeal effect accordingly.

Order pronounced on 07th day of February, 2019.

Sd/- Sd/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER

पुणे / Pune; �दनांक / Dated : 07th February, 2019. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :

अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeal)-1, Nashik. 4. The Pr. CIT-1, Nashik. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6.

// True Copy // आदेशानुसार / BY ORDER,

�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.

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Date 1 Draft dictated on 06.02.2019 Sr.PS/PS 2 Draft placed before author 07.02.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order