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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM
PER VIJAY PAL RAO, JM :
This appeal by the assessee is directed against the order dated 16th
November, 2017 of ld. CIT (A)-2, Jaipur for the assessment year 2014-15. The
assessee has raised the following grounds :-
“ 1. That the impugned assessment order u/s 143(3) dated 31.12.2015 is bad in law and on facts of the case for want of jurisdiction and for various other reasons and hence the same may kindly be quashed.
Rs. 2,50,000/-: The ld. CIT (A) has grossly erred in law as well as on the facts of the case in partly sustaining the disallowance of expenses of Rs. 2,50,000/- out of Rs. 4,00,000/- disallowed by the AO on account of various expenses, without invoking the provisions of Sec. 145(3), which was bases merely on assumption, presumption and suspicion. The disallowance so made by the ld. AO and partly confirmed by the CIT (A) is being absolutely, contrary to the provisions of law and facts of the
2 ITA No. 15/JP/2018 M/s. S.R. Protiens Pvt. Ltd., Jaipur.
case and not in conformity with the law, hence the same may kindly be deleted in full.
The ld. AO erred in law as well as on the facts of the case in charging of interest u/s 234B, 234C & 234D as consequential in nature. The appellant totally denies it liability of charging of any such interest. Hence the interest so charged, being contrary to the provisions of law and facts, may kindly be deleted in full.
The appellant prays your honors indulgence to add, amend or alter all or any of the grounds of the appeal on or before the date of hearing.”
During the course of assessment proceedings, the AO made an adhoc
disallowance of Rs. 4,00,000/- on account of various expenses relating to labour
payment, boiler running expenses, mustard seed crush expenses etc. for want of
supporting evidence as the assessee has produced self made vouchers. On appeal,
the ld. CIT (A) has restricted the disallowance to Rs. 2,50,000/-.
We have heard the ld. A/R as well as the ld. D/R and considered the relevant
material on record. The ld. A/R of the assessee has submitted that the AO had
made an adhoc disallowance whereas all these expenses are essential for doing the
business activity of the assessee of crushing the mustard seeds for the purposes of
extracting oil and mustard cake. Thus the ld. A/R has submitted that the assessee
has produced all the relevant record to show that the expenses are not excess
considering the nature of activity carried out by the assessee. Therefore, the adhoc
disallowance is not justified.
3.1. On the other hand, the ld. D/R has submitted that the assessee has made the
payments in cash of Rs. 19,000/- each time to avoid the provisions of the Act and
further the assessee has produced only self made vouchers, therefore, in the
3 ITA No. 15/JP/2018 M/s. S.R. Protiens Pvt. Ltd., Jaipur. absence of proper bills and vouchers, the expenses are not verifiable. He has relied upon the orders of the authorities below. 4. After considering the rival submissions as well as relevant material on record, at the outset we note that an identical issue was considered by the Coordinate Bench of this Tribunal in assessee’s own case for the assessment year 2013-14 wherein the AO had made an identical disallowance of Rs. 4,00,000/- in respect of the expenses which was restricted by the ld. CIT (A) to Rs. 2,00,000/-. On further appeal, the Tribunal has considered the issue in para 2.4 as under :-
“2.4 The Bench has the rival contentions and perused the materials available on record. It is noted that the AO made the lumpsum disallowance of Rs. 4.00 lacs as the expenses were not verifiable for want of proper bills and vouchers. In first appeal , the ld. CIT(A) has reduced the same to the extent of Rs. 2.00 lacs. During the course of hearing, the ld.AR of the assessee filed the following statement showing comparative expense. Nature of expenses A.Y. 2013-14 A.Y. 2012-14 Boiler Running expenses 11,62,680 10,49,497 (excluding Coal & Fuel Expenes) Mustard Cake expenses 11,67,459 10,62,573 Mustard Oil expenses 11,70,530 10,57,045 Mustard Seed expenses 11,62,680 11,75,240 Total 46,63,349 43,44,355 Marginal increase 3,18,994 Amount of total sales 84,97,18,792 70,12,90,610 Thus increase in the amount 14,84,28,1822 of sales by Rs.
4 ITA No. 15/JP/2018 M/s. S.R. Protiens Pvt. Ltd., Jaipur.
Taking into consideration the facts, circumstances of the case and the orders of the lower authorities, it will be in the interest of equity and justice to sustain the addition to the extent of Rs. 1.00 lacs as against Rs. 2.00 lacs confirmed by the ld. CIT(A). Thus Ground No. 1 and 2 of the assessee is partly allowed.”
Thus on identical facts, the Tribunal has restricted the disallowance to the extent of
Rs. 1,00,000/- for the assessment year 2013-14 and to maintain the rule of
consistency, we following the earlier order of this Tribunal and consequently the
disallowance sustained by the ld. CIT (A) is restricted to Rs. 1,00,000/-.
In the result, appeal of the assessee is partly allowed.
Order is pronounced in the open court on 29/06/2018.
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Jaipur Dated:- 29/06/2018. Das/
आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू
The Appellant- M/s. S.R. Protiens Pvt Ltd., Jaipur. 2. The Respondent – The ACIT, Circle-4, Jaipur. 3. The CIT(A). 4. The CIT, 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 15/JP/2018) vkns'kkuqlkj@ By order,
सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत
5 ITA No. 15/JP/2018 M/s. S.R. Protiens Pvt. Ltd., Jaipur.