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Income Tax Appellate Tribunal, CAMP BENCH AT JALANDHAR
Before: Sh. N. K. Saini, Hon’ble & Sh. Ravish Sood
IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR Before Sh. N. K. Saini, Hon’ble Vice President and Sh. Ravish Sood, Judicial Member ITA No.324/Asr./2018 : Asstt. Year : 2015-16 M/s Talbro Forgings, Vs Asstt. Commissioner of Income Tax, C/o V.P. Vijh & Co., CA, K.K. Circle-2, Tower, IST & 2nd Floor, Opp. Jalandhar Circuit House, Jalandhar (APPELLANT) (RESPONDENT) PAN No. AAAFT4939K Assessee by : Sh. Sandip Vijh, CA Revenue by : Sh. Bhawani Shankar, DR Date of Hearing : 07.01.2019 Date of Pronouncement : 08.01.2019
ORDER Per N. K. Saini, Vice President: This is an appeal by the assessee against the order dated 28.03.2018 of ld. CIT(A)-1, Jalandhar.
The only ground raised in this appeal reads as under:
“1. The Learned Commissioner of Income Tax(Appeals), has erred in sustaining an estimated disallowance of Rs.75,000/- from out of an estimated disallowance of Rs.150,000/- made by Assessing Officer out of Car Maintenance, Jeep Maintenance, Truck and Tempo Maintenance, Scooter Maintenance and Telephone expenses etc. The Learned Commissioner of Income Tax(Appeals), has not appreciated the submission including one that no specific instance of disallowance was mentioned in the assessment order.”
ITA No. 324/Asr./2018 2 Talbro Forgings
Facts of the case in brief are that the AO during the course of assessment proceedings called the bills & vouchers of certain major expenses like car, jeep, truck tempo & scooter maintenance, telephone etc. According to him most of the petty vouchers were self-generated and none of those vouchers were accompanied by any third party docmentary evidence, in certain vouchers only cash paid was mentioned. He made the ad-hoc disallowance of Rs.1,50,000/-.
Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the disallowance had been made on the basis of presumption and no specific item of expenses which was not connected to business had been pointed out. The ld. CIT(A) after considering the submissions of the assessee restricted the disallowance to Rs.75,000/-.
Now the assessee is in appeal. The ld. Counsel for the assessee submitted that the AO nowhere pointed out that the expenses were not incurred for the business purposes and that the making the payment in cash for small expenses is not prohibited. Alternatively, it was submitted that the disallowance sustained by the ld. CIT(A) was excessive.
In his rival submissions, the ld. DR supported the impugned order passed by the ld. CIT(A).
We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is an admitted fact that the AO had not pointed out any specific item of the expenses which was not
ITA No. 324/Asr./2018 3 Talbro Forgings incurred for the business purposes. At the same time, the cash vouchers maintained by the assessee were not fully verifiable. Therefore, in such type of cases, to cover the leakage some disallowance is called for on account of expenses of personal nature. However, in our opinion, the disallowance sustained by the ld. CIT(A) appears to be excessive. We, therefore, to meet the ends of justice reduce the disallowance to Rs.25,000/-. Thus, the assessee will get a relief of Rs.50,000/-.
In the result, the appeal of the assessee is partly allowed. (Order Pronounced in the Court on 08/01/2019)
Sd/- Sd/- (Ravish Sood) (N. K. Saini) JUDICIAL MEMBER VICE PRESIDENT Dated: 08/01/2019 *Subodh* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5.DR: ITAT ASSISTANT REGISTRAR