Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: Ms. Sushma ChowlaDr. B. R. R. Kumar
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the order of the ld. CIT(A)-20, New Delhi dated 31.03.2016.
Following grounds have been raised by the assessee: “1. That the order of the Learned Commissioner of Income Tax [Appeals]-20 New Delhi [hereinafter referred to as CIT(A)] is bad in law and on facts.
2. That the learned CIT(A) has erred on facts and in law in sustaining the disallowance of Rs.4,20,141/- representing expenditure claimed through staff imprest (being adhoc 25% of Project Expenses incurred through staff imprest of Rs. 16,80,565/-) out of the disallowance of Rs. 16,80,565 made by the learned assessing officer [LAO] of "Staff Imprest Expenses forming part of the Project Expenses on the ground that the said disallowance, considering the past record and the fact that the records for the year got destroyed due to fire, will be reasonable though the disallowance made resulted in a profit percentage 2 Prasanta Kumar Kundu substantially higher than the profit percentage for the past record.
That the learned CIT(A) has erred on facts and in law in sustaining the disallowance of Rs. 16,00,390 (being adhoc 25% of Rs. 64,01,562 representing aggregate of all the expenses appearing in the Profit and Loss account except for project expenses incurred through staff imprest and deprecation) in place of the adhoc disallowance of Rs. 25,60,624 @ 40% of Rs. 64,01,562 determined by the LAO on the ground that the said disallowance, considering the past record and the fact that the records for the year got destroyed due to fire, will be reasonable though the disallowance made resulted in a profit percentage substantially higher than the profit percentage for the past record.
4. That the learned CIT(A) has erred on facts and in law in sustaining the disallowance of Rs. 50,010 on account of deprecation on fixed assets purchased during the year in the absence of any documents in favour of the claim when the learned CIT(A) has recognized the fact based on evidence produced that there was a major fire and the records got destroyed in it.
5. That the learned CIT(A) has erred on facts and in law in sustaining the disallowance of Rs. 15,920 on account of TDS payable on the ground that the appellant failed to provide any details as to when it had deposited the TDS payable even though the learned CIT(A) has recognized the fact based on the evidence produced that there was a major fire and the records got destroyed in it. The amount of Rs 15,920 also formed part of the expenses of Rs. 64,01,562, 40% of which were disallowed by the LAO, resulting in an additional disallowance to the extent of 25% of Rs. 15,920.
6. That the learned CT(A), though in his judgment placed reliance on the past record, has erred on facts and in law in sustaining (part/full) disallowances made by the LAO, as the net profit percentage after reckoning the relief provided by the learned CIT(A), worked out to 45.40% which was substantially higher when compared with the average net profit percentage of 26.56% for the last 4 years and the net profit of 28.29% returned by the assessee for the assessment year in question.
That any consequential relief to which the assessee may be entitled to under the foregoing grounds of appeal may kindly be granted to the assessed.”
3 Prasanta Kumar Kundu 3. The brief facts of the case are that the assessee is proprietor of M/s Xplorer and is engaged in profession of Topographical Surveys, Geotechnical Investigation, River Survey, and preparation of detailed Project Reports and Civil & Structural Designs. During the year, the assessee has shown receipts from projects of Rs.1.18 crores against which Rs.87.43 lakhs of expenditure has been claimed. During the assessment, the Assessing Officer has disallowed the entire staff impressed expenses owing to non-production of evidences.
The ld. CIT (A), on going through the submission of the assessee disallowed 25% of the expenditure claimed by the assessee and confirmed the disallowance to the extent of Rs.4.2 lakhs.
The Assessing Officer has further disallowed an amount of Rs.25.6 lakhs being the 40% of other expenses incurred by the assessee. The ld. CIT (A) on going through the entire affairs of the assessee has reduced the addition to 25% of the total expenses and confirmed the addition of Rs.16.00 lakhs. Further, the ld. CIT (A) has also confirmed an amount of Rs.15,920/- on account of TDS payable.
During the arguments before us, the assessee submitted that owing to the fire in the office premises, the assessee could not submit the details as called for by the revenue authorities. He argued that owing to loss of documents in fire and inability to rearrange the documents, the profit may be estimated based on the profitability returned in the earlier years and as well as in the subsequent years. The ld. DR relied on the orders of the revenue.
4 Prasanta Kumar Kundu 7. We have gone through the entire material available before us. We find that in the absence of any evidence put forth by the assessee owing to fact that there has been fire in the office and the bills, vouchers for the expenses could not be reconstructed, after hearing both the parties, keeping in view the profitability of the earlier years, we hereby hold that interest of the justice would be well served if the assessee is given a remission of 50% of the amount confirmed by the ld. CIT (A). Regarding the TDS payable at ground no. 5 of the appeal, since it has already been a part of the expenses already disallowed, no further addition is required on this ground.
Regarding the depreciation of Rs.50,010/- on purchase of fixed asset, the assessee could not furnish even the indirect evidences of payment made towards the purchase viz. bank statement or confirmation of the seller. Hence, in the absence of any primary or corroborative material, we hereby decline to interfere with the order of ld. CIT (A) on this ground.
In the result, the appeal of the assessee is partly allowed. Order Pronounced in the Open Court on 25/10/2019