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Income Tax Appellate Tribunal, BANGALORE BENCHES : “A”, BANGALORE
Before: SHRI A.K.GARODIA & SMT.BEENA PILLAI, JUDICAL MEMBER
PER BEENA PILLAI, JUDICIAL MEMBER : Present appeal has been filed by assessee against order dated 28/09/18 passed by Ld. CIT (A)-5, Bengaluru, for assessment year 2015-16 on following grounds of appeal.
ITA No.3269(B)/2018 2 “1. On the facts and circumstances of the case, the ld. Assessing Authority /ld.CIT(A) ought to have appreciated that the appellant ha submitted the documentary evidences of labour and other payments vide an acknowledged letter dated 25-09-2018(CIT Appeals).
2. Neither the Assessing Officer nor the CIT(A) during the course of the assessment/appeal proceedings communicated the absence of supporting documents to the appellant.
3. On the facts and circumstances of the case he ld. Assessing Authority and the ld.CIT(A) also ought to have appreciated the fact that the appellant has submitted all the details sought for well before the date of assessment/appellate order. Therefore, ad hoc disallowances made on grounds of non-cooperation and non- submission of proofs are liable to be set aside. 4.The ld. CIT(A) has failed to take the cognizance of the fact that it is settled law that the disallowance on account of ad hoc basis is not permissible under the provision of the Act. If the AO is not satisfied with the submission of assessee then he has to make the disallowance on ad hoc basis without pointing out any defect/error in the submission of assessee. In this connection, w also rely in the order of Co-ordinate Bench of ITAT Kolkata in the case of Animesh Sadhu vs ACIT in ITA 11/Kol/2013 dated 12.11.2014. The relevant extract is reproduced below. “8. We have considered the rival submissions. A perusal of the assessment order shows that the Assessing Officer has disallowed 20% of the expenses on estimate basis on the ground that no independent verification to be made to find out the authenticity of the expenses. Ld.CIT(A) has reduced the same on the same ground. However, we are of the view 3 that no estimated disallowances can be made for inability to make independent verification. If any specific expenditure is unverifiable or is un-vouched, then such specific expenditure is disallowable. Here no such specific identification has been one. In these circumstances, w are of the view that the estimated disallowances as confirmed by the ld. CIT(A) in unsustainable. Consequently, the same stands deleted. In the result, Grounds No.2 & 3 of the assessee’s appeal stand allowed”. Similar issue were addressed in M/s Vijay Infrastructure Limited Vs ACIT(Lucknow) of 2015. For such other grounds that may be urged at the time of hearing and prayed before your goodselves that appeal be allowed in the interest of justice and equity”.
Brief facts of the case are as under: Assessee filed its return of income for year under consideration on 27/09/15 declaring total income of Rs.57,22,270/-. The case was selected for scrutiny and notice under section 143 (2) was issued, followed by notice under section 142 (1) along with questionnaire. In response to statutory notices, representative of assessee failed to appeared before Ld.AO and to furnish any details relating to proceedings. Thereafter on 29/11/2017 representative of assessee filed certain documents. However Ld. AO observed that assessee did not furnish any proof of labour charges and other expenses and therefore sum of Rs.1,05,04,080/- was disallowed being 20% of total expenditure claimed by assessee.
Aggrieved by addition made by Ld.AO assessee preferred appeal before Ld.CIT (A), who upheld addition made by Ld.AO.
ITA No.3269(B)/2018 4