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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: HON’BLE SHRI SHAMIM YAHYA & HON’BLE SHRI SANDEEP GOSAIN
Assessee by : Shri. B.V. Jhaveri, AR Revenue by : Shri. Dharm Veer Singh, DR : 25.02.2019 Date of Hearing : 13.05.2019 Date of Pronouncement O R D E R SANDEEP GOSAIN, J.M.: The only grievance of the assessee before us is with regard to adhoc disallowances @ 25% amounting to Rs. 66,91,360/- out of „repair and maintenance expenditure‟ incurred by the assessee. Learned AR appearing on behalf of assessee submitted that assessee had filed details of repairs and maintenance expenses aggregating to Rs. 7186792/- in the form charts. It was further submitted that assessee had also furnished from its computer‟s ledger account of repair and maintenance expenses which are already enclosed at page no. 35 to 83 of the paper book. According to the assessee, a fire took place in its premises where the records were kept and because of that some of the records were destroyed and therefore the assessee was unable to furnish vouchers and other supporting evidences in respect of „repairs and maintenance‟ expenses incurred by the assessee. Therefore, the Assessing Officer in the order of assessment disallowed 25% of Rs. 26765438/- i.e. Rs. 6691360/- by holding that since assessee has failed to prove that the expenses were incurred wholly and exclusively for the purpose of business and in the absence of complete details the said expenses could not be verified and thus disallowed 25% of the „repairs and maintenance‟ expenses of Rs. 26765438/-. It was further submitted that as per the profit and loss account under the head “expenses” the assessee had claimed expenses of Rs. 2,67,65,438/- as “upkeep and service cost” which is at page 18 of the paper book and according to the assessee, the said “upkeep and service cost” aggregating to Rs. 26765438/- is composed of several other expenses which are given in detail in the notes to financial statement. As per learned AR out of the total expenses of Rs. 26765438/-, the „repair and maintenance‟ expenses aggregated only to Rs. 7186792/-. In respect of balance expenses, the Assessing Officer had not called for any details, nor he had any intention of disallowing any portion of it as is apparent from the assessment order. Therefore, according to the assessee, the disallowance @ 25% of 26765438/- is contrary to the facts on the record because the „repairs and maintenance‟ expenses were aggregate to only Rs. 7186792/- and not Rs. 26765438/-.
It was further submitted that assessee had given comparative chart of repairs and maintenance expenses incurred by the assessee company in the Assessment Years 2010-11 to 2013-14 wherein also no disallowance was made even after scrutinizing the return of income of the assessee. Lastly learned AR submitted that assessee had also received insurance claim for loss due to fire from Royal Sundaram Alliance Insurance Company. It was submitted that since the document of receiving insurance claim from Royal Sundaram Alliance insurance company for loss of buildings and loss of furniture, fixture and fittings could not be placed before the Assessing Officer and therefore assessee had now filed an application dated 23.2.2019 or admission of additional evidence.
We have heard the counsel for both the parties and also perused the relevant material on record, orders passed by the Revenue authorities, judgments cited by both the parties and the contents of the application filed by the assessee for admission of additional evidence. From the records, we noticed that assessee wants to admission of additional evidence in respect of photographs of premises in which fire had broken out and also wants to place on record the proof of receiving insurance claim from M/s Royal Sundaram Alliance Insurance Company in respect of loss sustained by the assessee due to fire. According to us, the above mentioned documents are essential for deciding the controversy / claim of the assessee. The revenue has not pointed out that these documents now being produced by the assessee are fabricated in any manner therefore the authenticity and veracity of these documents are not in dispute whereas on the contrary according to the assessee these documents are very necessary for adjudicating and deciding the claim of the assessee on merits. Even according us no prejudice shall be caused to the Revenue in case we allow the application of the assessee for admission of additional evidence and admit the documents mentioned therein by way of additional evidence. Since these documents now produced by the assessee by way of additional evidences requires verification therefore in the fitness of the circumstances, we set aside the order of the CIT(A) and restore the matter back to the file of Assessing Officer with a direction to decide the claim of expenses of assessee afresh after verifying the additional evidences so produced by the assessee. Assessee is also at liberty to place on record any other document if so advised. Simultaneously, the Assessing Officer is also at liberty to call for any other document or to raise any query which is necessary for adjudicating / deciding the claim of expenses raised by the assessee. It is needless here to mention that before passing afresh order, AO shall provide sufficient opportunity of hearing to the assessee. Before parting, we may make it clear that our decision to restore the matter back to the file of AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the AO independently in accordance with law.
With these directions, we allow this ground raised
by the assessee for statistical purposes.