SUNIL HEALTHCARE LTD.,ALWAR vs. ACIT, ALWAR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh dqy Hkkjr] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1099/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2012-13 cuke Sunil Health Care Ltd. The A.C.I.T., Vs. 17-18, Old Industrial Area Circle-1, Alwar Alwar. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AACCS9198Q vihykFkhZ@Appellant izR;FkhZ@Respondent

fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal jktLo dh vksj ls@ Revenue by : Shri R.A.Verma lquokbZ dh rkjh[k@ Date of Hearing : 06/04/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 10/04/2017 vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of Ld. CIT(A) Alwar dated 04.11.2016 for A.Y. 2012-13. The grounds of appeal taken by the assessee are as under:- “ 1. The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the adhoc disallowance out of following expenses:- Legal & Professional Charges Rs. 70,000/-

ITA No.1099/JP/2016 2 Sunil Health Care Ltd. Vs.A.C.I.T.,Circle-1, Alwar Sales Promotion Expenses Rs. 50,000/-

disallowance of Rs. 1,48,476/- (42,731 + 1,05,745) u/s 36(1) (va) r.w.s

2(24)(x) on account of delayed payments of employee’s contribution

towards ESI & PF ignoring that the same is deposited before the end of

the year and the issue is covered by the decision of Rajasthan High

Court in case of CIT vs. State Bank of Bikaner & Jaipur 363 ITR 70,CIT

Vs. Jaipur Vidyut Vitran Nigam Ltd. 363 ITR 307 and CIT Vs. Udaipur

Dugdh Utpadak Sahakari Sangh Ltd. 366 ITR 163.”

assessee has debited a sum of Rs. 23,47,751/- in the year under

consideration under the head ‘Legal and professional charges’ in

comparison to last year’s charges of Rs. 23,54,398/-. The assessee was

asked to furnish details of legal and professional charges along with

vouchers for verification indicating the purpose and the business

exigency. In response, the assessee produced the date-wise details of

Legal & Professional Charges as admitted by the Assessing Officer. At

the same time, Assessing Officer held that there were certain payments

through self-made vouchers and it was fair and just to make a

ITA No.1099/JP/2016 3 Sunil Health Care Ltd. Vs.A.C.I.T.,Circle-1, Alwar disallowance of Rs. 70,000/- in this regard. On similar basis, the AO has

disallowed Rs. 50,000/- out of Rs. 24,15,534/- incurred the assessee

under the head “sale promotion” stating that though the assessee has

produced date-wise details of sales promotion, however, there are

certain payments which were made in cash or through self-made

vouchers and it was fair & just to make a disallowance of Rs. 50,000/-

on this account.

2.1. Being aggrieved, the assessee carried the matter in appeal before

the ld. CIT(A) and submitted that the assessee is maintaining day to day

books of account and the expenses are booked on the basis of

bills/vouchers and other supporting papers which are duly checked and

approved by the competent officers/executives.The expenses under this

head are mainly related to Legal & Professional fees paid to various

professionals, legal experts, Certification fees etc. which are properly

vouched. The complete details of Legal & Professional charges were

submitted to the A.O and all bills/vouchers etc. supporting the expenses

were produced for verification as also stated by the A.O in his

assessment order at page no. 2. The details of the expenses are

enclosed herewith at P.B. 01-15. The expenses in the ledger account

shows the nature of expense and are properly supported. The assessee

ITA No.1099/JP/2016 4 Sunil Health Care Ltd. Vs.A.C.I.T.,Circle-1, Alwar has also deducted TDS wherever applicable. The A.O has not pointed

out any specific expense item which is not supported or in which the

assessee has booked excess expense. The A.O. has made ad-hoc

disallowance without any basis but only on the doubts and surmises. On

similar basis, the assessee has contested the disallowance of sales

promotion expenses before the ld CIT(A).

2.2. The ld. DR. is heard who has relied on the orders of the lower

authorities.

2.3. We have heard the rival contentions and pursued the material

available on record. In the assessment order, the AO has stated that

the assessee has produced data-wise details of Legal & Professional

charges and sales promotion expenses and on perusal of those details

submitted by the assessee, the AO has disallowed Rs. 70,000/- under

the head Legal & professional and Rs. 50,000/- under the head ‘Sales

promotion’ expenses. No specific expenses have been highlighted by

the Assessing Officer which has not been incurred by the assessee for

the purposes of business or which has been wrongly claimed by the

assessee. It is a clear case of an adhoc disallowance which cannot be

sustained in the eyes of law. In the result, ground No. 1 of the assessee

is allowed.

ITA No.1099/JP/2016 5 Sunil Health Care Ltd. Vs.A.C.I.T.,Circle-1, Alwar 3. Regarding ground No. 2, it is admitted position that payment of

employee’s contribution towards ESI and Employees Provident Fund has

been deposited before the end of the financial year. In light the decision

of the Hon’ble Rajasthan High Court in case of CIT vs. State Bank of

Bikaner & Jaipur and others, the ground taken by the assessee is

allowed.

In the result, appeal filed by the assessee is allowed.

Order pronounced in the open court on 10/04/2017.

Sd/- Sd/- ¼dqy Hkkjr ½ ¼foØe flag ;kno½ (Kul Bharat) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 10/04/2017. *Ganesh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Sunil Health Care Ltd., Alwar 2. izR;FkhZ@ The Respondent- The A.C.I.T., Circle-1, Alwar 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File {ITA No. 1099/JP/2016}

vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत