SMT. AESHRA NARHARIBHAI PATEL,BARODA vs. THE INCOME TAX OFFICER, WARD-5(1), BARODA

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ITA 243/AHD/2016Status: DisposedITAT Ahmedabad23 April 2018AY 2009-103 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that similar expenses were allowed in subsequent assessment years and the assessee had provided supporting documents. Therefore, the disallowance was restricted to 50% in the interest of justice.

What were the facts?

The assessee claimed an expenditure of Rs. 18,47,757/- for payments to artists, which was disallowed by the Assessing Officer for lack of evidence. The CIT(A) upheld this disallowance, finding the claim to be a cooked-up story.

What were the issues?

Whether the disallowance of expenditure claimed for payments to artists was justified due to lack of evidence, and if not, to what extent relief should be granted.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI N.K. BILLAIYA & SHRI S.S. GODARA

Hearing: 03/04/2018Pronounced: 23/04/2018

PER S.S. GODARA, JUDICIAL MEMBER :

- This assessee’s appeal for assessment year 2009-10 arises against CIT(A)-1, Vadodara’s order dated 18.12.2015 passed in case No.CAB- 1/172/2015-16 upholding Assessing Officer’s action disallowing her expenditure claim of Rs.18,47,757/- in assessment order dated 18.03.2014 in proceedings under section 143(3) r.w.s. 147 of the Income-tax Act, 1961; in short “the Act”.

Heard both the parties reiterating their respective stands against and in support of the impugned disallowance of expenses. Case file perused.

2.

We notice at the outset that the CIT(A) in his detailed discussion on the issue of impugned disallowance rejects assessee’s contention in the following manner:-

“4. 3. I have considered the facts of the case, the appellant's submission and the AO's observations. Though the AO had pointed out several A.Y :- 2009-10 discrepancies in the computation of income filed by the appellant, ultimately he has disallowed only the claim of the appellant of having made payment of Rs.18,47,757/- as payment to artists. Such disallowance has been made because of the fact that the appellant could not produce any evidences or details in this regard. The AO has pointed out that the appellant could not furnish any supporting evidences for the expenses claimed and even offered to pay tax on the profit @ 8% to the turnover, keeping in view the above discrepancy. The AO has also pointed out that there is nothing on record to show that the appellant was engaged in the supplying of artists in the fashion shows. The AO's reasoning that if this had been the case, the appellant would have received the payments after deduction of IDS which would have been reflected in her Form 26AS is also acceptable and correct reasoning. A perusal of the entire facts shows that the claim of the appellant that she was supplying artists for fashion shows is nothing but a cooked up story to claim bogus expenditure in order to reduce her taxable income. The appellant has received the payments in her bank account on account of her modeling assignments arid as has been discussed in detail by the AO, the expenses being borne are on account of her personal purchases, conveyance and other personal necessities. Even the rent being paid by her is much more that the income shown by her. Under such circumstances, the disallowance of payments claimed to have been made to artists is correct and is upheld. It may also be pointed out that the AO has still allowed expenses to the tune of Rs.8,32,806/- to the appellant which are reasonable expenses for the purpose of carrying out her modeling profession. The expenses disallowed are the specific expenditures claimed by the appellant for which neither any details nor any supporting documentary evidences are available with her. Hence, the disallowance of this amount is up held.”

3.

We have given our thoughtful consideration to the rival submissions. There is no dispute that the main amount in question deposited in her bank account to the tune of Rs.18,70,500/- stands assessed as business/professional income. This assessee is a model admittedly attending fashion shows and fashion weeks as well as advertisements & acting. We notice in this factual backdrop that the Assessing Officer himself has accepted her identical expenditure of Rs.30,75,494/- and Rs.21,16,162/- against corresponding incomes of Rs.39,50,550/- and Rs.25,77,400/- in assessment years 2010-2011 & 2011- 12; respectively. She has also placed on record details of expenses, revised A.Y :- 2009-10 financial statement, trial balance, income ledger, ledger expenditure, summary of receipts & payments, bank statement, Form No.26AS and ledger account in support of her impugned claim. We feel in these facts and circumstances that the larger interest of justice would be met if the impugned disallowance is restricted to 50% only since there is no direct evidence controverting the CIT(A)'s findings extracted in the proceedings paragraph. We make it clear that our instant adjudication shall not form a precedent in any preceding or succeeding assessment year. The assessee therefore succeeds in getting relief to the extent of 50% of the impugned disallowance. This assessee’s appeal is partly allowed.

Order pronounced in the Court on 23rd April, 2018 at Ahmedabad (N.K. BILLAIYA) JUDICIAL MEMBER Ahmedabad; Dated 23/04/2018 *Bt आदेश क& ""त(ल)प अ*े)षत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant

2.

""यथ" / The Respondent. 3. संबं"धत आयकर आयु$त / Concerned CIT 4. आयकर आयु$त(अपील) / The CIT(A) 5. 'वभागीय "*त*न"ध, आयकर अपील"य अ"धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड/ फाईल / Guard file.

आदेशानुसार/ BY ORDER,उप/सहायक पंजीकार (Dy./Asstt.

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