SMT KANAK CHAKRABORTY,KOLKATA vs. ACIT, CIRCLE-43, KOLKATA

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ITA 1044/KOL/2019Status: DisposedITAT Kolkata21 April 2021AY 2014-152 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that ad hoc disallowances made without rejecting the books of account are unsustainable. The addition on account of closing stock valuation was also decided in favour of the assessee based on a prior decision in the assessee's own case.

What were the facts?

The assessee filed an appeal with a delay of 85 days, which was condoned. The appeal concerned ad hoc disallowances and an addition on account of closing stock valuation for AY 2014-15.

What were the issues?

Whether ad hoc disallowances made without rejecting books of account are valid and whether the addition on closing stock valuation is justified.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH ‘SMC’ KOLKATA

Before: SHRI J. SUDHAKAR REDDY, HON’BLE]

order April 21st, 2021 ORDER This is an appeal filed by the assessee directed against the order of Learned Commissioner of Income Tax (Appeals) – 13, Kolkata [hereinafter the “CIT(A) passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dated 01.12.2018 for the Assessment Year 2014-15.

2.

There is delay of 85 days in filing of the appeal. After perusing the petition for condonation of delay, I am convinced that the assessee was prevented from reasonable cause for filing of the appeal in time. Hence I condone the delay and admit the appeal.

3.

After hearing rival contentions, I find that Ground No. 1 and 2 are against adhoc disallowances which are made without rejection of books of account. The disallowance was made on estimated basis. The CIT(A) in an arbitrary manner deleted certain adhoc disallowances and has sustained certain adhoc disallowances. I find no reason for Assessment Year: 2013-14 Smt. Kanak Chakroborty such adhoc actions when no defects have been pointed out in the books of account or the vouchers and another document given by the Ld. CIT(A). When the disallowance is made on an adhoc basis, on the ground that the expenditure is to be treated as capital expenditure, without mentioning the defects in the books of account or the vouchers and another document such arbitrary disallowance cannot be sustained. Thus we allow Ground No. 1 and 2.

4.

Ground No. 3 as against an addition made on valuation of closing stock. This issue is covered in favour of the assessee by the decision of ‘SMC’ Bench of the Tribunal in for the assessment year 2006-07 order dated 31.10.2017 in assessee’s own case. Respectfully follow we allow this ground of the assessee.

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