FIRE TRIX ENGINEERING & SYSTEMS P. LTD.,CHENNAI vs. ITO CORPORATE WARD 2(2), CHENNAI

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ITA 2113/CHNY/2018Status: DisposedITAT Chennai01 January 2019AY 2012-133 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 the disallowances were made purely on presumptions and assumptions by the Assessing Officer and CIT(A). Since the assessee had produced vouchers and there was no evidence of them being false, the disallowances were deleted.

What were the facts?

The assessee, a dealer in fire extinguishing products, had business promotion expenses of ₹11,10,506/- disallowed by the Assessing Officer. The disallowance was confirmed by the CIT(A) on the grounds that the expenses were supported by self-made and third-party vouchers that appeared to be cooked up and lacked further supporting documents.

What were the issues?

Whether disallowance of business promotion expenses can be made solely on the basis of suspicion and presumption without concrete evidence of falsity of vouchers.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH : CHENNAI

Before: SHRI GEORGE MATHAN & SHRI A.MOHAN ALANKAMONY

आदेश / O R D E R

PER GEORGE MATHAN, JUDICIAL MEMBER

1.

This is an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-13, Chennai in dated 14.11.2017 for the assessment year 2012-13.

2.

Mr.T.T.Durairaj Kandiar represented on behalf of the Assessee and Mr.Guru Bashyam represented on behalf of the Revenue.

3.

It was submitted by ld.A.R that assessee is dealers in fire extinguishing products. It was a submission that business promotion expenses to an extent of `11,10,506/- came to be disallowed on the ground that they were supported by self-vouchers, self made vouchers and some third party vouchers, which appeared to have been cooked up. As per the ld. Assessing Officer, the vouchers submitted appeared fresh, neither faded nor torn. It was a submission that Ld.CIT(A) on the ground that there was no further supporting documents, confirmed the disallowance of `11,10,506/- as non-genuine business promotion expenses. It was a submission that the assessee has produced all the evidences, which are in the form of vouchers, and none of the vouchers are found to be false and the disallowances have been made on presumptions. It was a prayer that the disallowances sustained by Ld.CIT(A) may be deleted.

4.

In reply, the ld.D.R supported the orders of the ld. Assessing Officer and the ld.CIT(A).

5.

We have considered the rival submissions. A perusal of the assessment order and order of the CIT(Appeals) shows that the disallowances made by the ld. Assessing Officer and confirmed by the Ld.CIT(A) are only on the basis of presumptions. An assessment order cannot be made on presumptions and assumptions. It is not the case that the assessee has not produced vouchers. The assessee has produced them. Just because the ld. Assessing Officer suspects the same, there cannot be any disallowance. This being so, the disallowance made by the ld. Assessing Officer and confirmed by the ld.CIT(A) stands deleted.

6.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 01 January, 2019, at Chennai.

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