L. RAJASEKHAR,VISAKHAPATNAM vs. THE ACIT, VISAKHAPATNAM

आदेश / O R D E R

PER V. DURGA RAO, Judicial Member:

This appeal filed by the assessee is directed against order of the

CIT(A)-1, Guntur vide ITA No.0111/2012-13/CIT(A-1)/GNT Dated

24.10.2016 for the assessment year 2010-11.

filed an affidavit, wherein he explained reasons for non-filing of the 1

ITA No.245 /Vizag/2017 L. Rajasekhar, Visakhapatnam appeal in time. We find that there is a sufficient cause for the assessee

for not filing the appeal in time, therefore, the delay has to be

condoned, accordingly delay of 17 days is condoned.

from business or profession of engineering consultancy filed return of

income by declaring total income of ` 17,18,290/-. The case of the

assessee was selected for scrutiny and assessment order is passed u/s

143(3) of the Income Tax Act, 1961 (hereinafter called as 'the Act'). In

the assessment order, the A.O. has observed that the assessee has

shown gross consultancy receipts of ` 36 lakhs from Marg Ltd. and

claimed expenditure of 505 of the same towards travelling charges, local

conveyance, salaries to staff, telephone bills, etc. The A.O. has asked

the assessee to produce the details of the expenditure. In response to

that, the assessee has filed some details and vouchers for verification.

On verification it is found that most of the vouchers are self made and

not supported with any proper evidence and the expenditure is also

personal in nature. Accordingly, the A.O. has allowed 1

the Ld. Counsel for the assessee has submitted that the A.O. has only

allowed 10% of the expenditure. It is highly arbitrary and

ITA No.245 /Vizag/2017 L. Rajasekhar, Visakhapatnam disproportionate and therefore, prayed that 50% of the expenditure

claimed by the assessee may be allowed.

authorities.

on record and gone through the orders of the authorities below. The

assessee is a retired employee and carrying engineering consultancy

service. He has not maintained any books of accounts, no bills and

vouchers. The assessee has received a gross receipt of ` 36 lakhs, out

of which 50% is claimed as expenditure. The assessee is not able to

substantiate the expenditure before the authorities below. Therefore,

the A.O. has allowed only 10% of the expenditure and accordingly

assessment is completed. We find that the A.O. allowed only

expenditure of 10% is highly arbitrary and is very lower side. It is

difficult to earn an amount of ` 36 lakhs with a minimum expenditure of

10%. Therefore, keeping in view of the facts and circumstances of the

case, we are of the opinion that the assessee must have incurred 40%

of the expenditure to earn income of ` 36 lakhs. Therefore, we set

aside the order passed by the Ld. CIT(A) and direct the A.O. to allow

ITA No.245 /Vizag/2017 L. Rajasekhar, Visakhapatnam 40% of the expenditure claimed by the assessee out of gross receipts of

` 36 lakhs.

The above order was pronounced in the open court on 6th Apr’18.

Sd/- Sd/- ( ड.एस. . . . सु�दर "संह) (वी. दुगा�राव) (D.S. SUNDER SINGH) (V. DURGA RAO) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER #वशाखापटणम /Visakhapatnam: 'दनांक /Dated : 06.04.2018 VG/SPS आदेश क� ��त)ल#प अ*े#षत/Copy of the order forwarded to:-