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Income Tax Appellate Tribunal, DELHI BENCH: ‘F+SMC’ NEW DELHI
Before: SH. R. K. PANDA & MS SUCHITRA KAMBLE
PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order of the Commissioner of Income Tax [Appeals]-35, New Delhi dated 19.08.2016 for Assessment Year 2013-14.
The Grounds of appeal are as under:- 1. “That on the facts and in the circumstances of the case the ld CIT(A) erred in confirming the disallowance of Rs.2,22,507/- being cost of Samples Purchased in cash with complete disregard to the fact that such payments were fully reimbursed to the assessee and no portion thereof was claimed as expenditure incurred so as to attract provisions of section 40A(3) of the Act.
2. That the ld CIT(A) erred in not holding that if the disallowance made by AO is sustained than it would tantamount to double taxing of same amount, first as the amount stands reduced in determining the assessable income and again by adding it as inadmissible expense, which is contrary to principles of taxation.
That the orders of the Learned Authorities below being contrary the facts and circumstances of the case and in law the appeal be allowed.”
3. The assessee filed E-return dated 28.10.2013 declaring income of Rs.10,01,880/-. The assessee company was engaged in the business of security and investigation. The Assessing Officer observed that the assessee made payments exceeding Rs.20,000/- in cash on various occassions. The Assessing Officer raised the said query on 08.01.2016 to the assessee company. The assessee company filed the reply. The Assessing Officer after going through the reply held that as per the provision of Section 40A(3) of the Income Tax Act, 1961 where the assessee incurs any expenditure in respect of which a payment of aggregate made to a person in a day otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds Rs.20,000/- no deduction shall be allowed in respect of such expenditure. Accordingly Rs.2,22,507/- was disallowed. The Assessing Officer also made addition of Rs.10,777/- as FBT expenses u/s 40(a)(ic) of the Act as well as addition of Rs.2,115/- as an interest income paid u/s 244A of the Act.
Being aggrieved by the assessment order the assessee filed an appeal before the CIT(A). The CIT(A) dismissed the appeal for the reason that the assessee has not furnished any evidence and similar addition was made in A.Y. 2012-13 where no appeal was filed by the assessee.
The Ld AR submitted that the assessee has filed the evidences before the Assessing Officer which was not taken cognizance by the Assessing Officer as well as CIT(A). The Ld AR further submitted that the finding of the CIT(A) that no evidence was filed was incorrect. Therefore, the Ld AR submitted that the matter may be remanded back to the file of the Assessing Officer to verify the expenses/claim of the assessee as per the evidences produced before the Assessing Officer.
The Ld DR relied upon the assessment order and the order of CIT(A).
We have heard both the parties and perused all the relevant materials available on record. It can be seen from the records that the assessee company has filed the details in respect of the payment made in excess of Rs.20,000/- and that has been confirmed by those parties but the same was not verified either by the Assessing Officer as well as by the CIT(A). Therefore, it will be appropriate to remand back entire issue to the file of the Assessing Officer to verify the evidences and after going through the same whether the claim of the assessee is genuine or not has to be determined by the Assessing Officer. Needless to say the assessee be given opportunity of hearing by following principle of natural justice. The appeal of the assessee is partly allowed for statistical purposes.
In result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the Open Court on 20th day of February, 2020.
Sd/- Sd/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 20/02/2020 Priti Yadav, Sr. PS/R.N * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT
ASSISTANT REGISTRAR ITAT NEW DELHI
Date of dictation 29.01.2020 Date on which the typed draft is placed before the 29.01.2020 dictating Member
Date on which the typed draft is placed before the .01.2020 Other Member
Date on which the approved draft comes to the Sr. .02.2020 PS/PS
Date on which the fair order is placed before the .02.2020 Dictating Member for pronouncement
Date on which the fair order comes back to the Sr. 20 .02.2020 PS/PS Date on which the final order is uploaded on the 20 .02.2020 website of ITAT Date on which the file goes to the Bench Clerk 20 .02.2020 Date on which the file goes to the Head Clerk