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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: HON’BLE SHRI SAKTIJIT DEY, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
1 Assessment Year: 2013-14 आयकर अपीलीय अिधकरण “ई” "ायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI माननीय "ी श""जीत दे, "ाियक सद" एवं माननीय "ी मनोज कुमार अ"वाल ,लेखा सद" के सम"। BEFORE HON’BLE SHRI SAKTIJIT DEY, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM (Hearing Through Video Conferencing Mode) आयकर अपील सं./ (िनधा"रण वष" / Assessment Year:2013-14) ESS Infraproject Private Limited DCIT-12(2)(1) बनाम/ Room No.223/262,2nd Floor William Compound, Mithi Chowki Malad(W), Mumbai-400 064 Aaykar Bhavan Vs. M.K. Road, Mumbai-400 020 PAN/GIR No. AAGCS-7146-C (अपीलाथ"/Appellant) (""थ" / Respondent) : Assessee by : None Revenue by : None सुनवाई की तारीख/ : 23/11/2020 Date of Hearing घोषणा की तारीख / : 23/11/2020 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. None appeared for either side during hearing of the appeal. However, the material on record was quite sufficient for disposal of the appeal and therefore, the appeal is being disposed-off by way of this order.
In this appeal, the assessee is aggrieved by adhoc disallowance of certain expenses and certain addition u/s 41(1). An assessment was framed against the assessee for Assessment Year (AY) 2013-14 u/s 143(3) on 21/03/2016. During the course of assessment proceedings, it 2 Assessment Year: 2013-14 transpired that the assessee incurred petty cash expenses aggregating to Rs.38,53,938/- under repair & maintenance expenses and operational expenses. Upon perusal of bills and vouchers, it was found that around 10% of the vouchers were self made and nor supported by proper bills. Accordingly, an adhoc disallowance of 10% was made against this expenditure which resulted into an addition of Rs.3.85 Lacs in the hands of the assessee. Another addition was u/s 41(1) since it was found that sundry creditors having opening balance of Rs.9.98 Lacs were unpaid till date and therefore, a conclusion was drawn that the liability had ceased to exist in terms of Sec.41(1). Accordingly, these creditors were added to the income of the assessee u/s 41(1).
The Ld. CIT(A) confirmed the adhoc disallowance of 10% petty cash expenditure and dismiss the ground raised
by the assessee. To contest the addition u/s 41(1), the assessee submitted additional evidences in the shape of ledgers of sundry creditors from FYs 2013-14 to 2015-16. Admitting the same, it was noted that the balances were adjusted on account of reversal of credit of excess billing, defective good returned, write-off, sales return etc. It was also observed that there were two sets of ledgers and therefore, the ledgers filed by the assessee could not be relied upon and the addition was to be confirmed. Aggrieved, the assessee is in further appeal before us.
4. We have carefully considered the material on record. So far as the adhoc disallowance of expenses is concerned, we find that the assessee incurred petty cash expenditure which was not supported by bills / documentary evidences. Therefore, there was no option before lower authorities except to estimate the disallowance. The 10% estimate, in 3 Assessment Year: 2013-14 our opinion, is quite reasonable under the circumstances and the same would not therefore require any interference on our part. The ground thus raised stands dismissed.
5. So far as the addition u/s 41(1) is concerned, we deem it fit to set aside the findings of Ld. CIT(A) on this issue and remit the matter back to the file of Ld. AO in the light of additional evidences submitted by the assessee since these evidences were never subject matter of scrutiny by Ld. AO. The Ld. AO is directed to appreciate the additional evidences submitted by the assessee and re-adjudicate the issue of addition u/s 41(1) after providing reasonable opportunity of hearing to the assessee. The assessee, in turn, is directed to substantiate his claim in this regard failing which Ld. AO shall be at liberty to re-adjudicate the same on the basis of material on record. This grounds stands allowed for statistical purposes.
6. Resultantly, the appeal stands partly allowed for statistical purposes. Order pronounced on 23rd November, 2020. (Saktijit Dey) (Manoj Kumar Aggarwal) "ाियक सद" / Judicial Member लेखा सद" / Accountant Member