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Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,
Before: SHRI B.P. JAIN
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘SMC’ BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER [A.Y. 2012-13] Sachin Chemical Udyog Vs. The I.T.O Bhagwati Prasad, Advocate Bhagpat 111, Hans Bhawan, 1, Meerut Bahadur Shah Zafar Marg New Delhi PAN : AACFS 9545 G [Appellant] [Respondent] Date of Hearing : 10.10.2017 Date of Pronouncement : 16.10.2017 Assessee by : Ms.Shilpi Dewan, CA Revenue by : Shri T. Vasanthan Sr. DR ORDER This appeal of the assessee arises from the order of the ld. CIT(A), Meerut vide order dated 03.08.2016 for A.Y. 2012-13.
The assessee has raised basically the following two grounds of appeal:
“a) Because that the appeal filed against the said assessment order was partly accepted by the Commissioner Of Income Tax in as much as disallowance of expenses of Rs.9,50,22/- estimated at the rate of 20% was reduced to 10%.It is stated that the expenses incurred were duly recorded in the book of account maintained in the normal course of business. No discrepancy was found therein. The Income Tax Officer has no power to make any estimate and disallow the expenses on best judgment basis.
Because that authority below erred to add payment of Rs 2,00,000/- ,Rs. 2,00,000/- and Rs. l,00,000/-u/s 40A (3) of the Act. The explanation given at the time of assessment/appeal proceeding have neither been referred to in the order nor given any reason for rejecting the same. The appellant craves leave to make detailed submission at the time of hearing before the Hon'ble Tribunal.”
As regards the first ground, which is listed as Ground No. 4 in the grounds of appeal, the Assessing Officer estimated the disallowance of expenses on account of personal use at Rs. 95,022/- and further made disallowance u/s 40A(3) of Rs. 5 lakhs. The ld. CIT(A) restricted the adhoc disallowance at 10% but confirmed the disallowance u/s 40A(3) of the Act.
4. I have heard the rival submissions and have perused the relevant material on record. The disallowance made, in fact, is on assumptions that the assessee has debited the expenses which have been used on personal account of the assessee but without pointing out any specific defect. In such circumstances, and facts of the case, no such disallowance can be made. The disallowance so made is directed to be deleted. Accordingly, the first ground listed as Ground No. 4 is allowed.
5. Apropos the next issue listed as Ground No. 5, the assessee submitted that explanation was given before the Assessing Officer and the ld. CIT(A) which was neither considered by the Assessing Officer nor the ld. CIT(A) and therefore, the matter may be restored to the file of the Assessing Officer to consider the explanation and decide the case de novo, which was fairly conceded to by the ld. DR. In such facts and circumstances of the case, I set aside the file of the Assessing Officer to consider the explanation of the assessee which was put forth earlier or any other explanation which shall be submitted at the time of fresh hearing, of course, needless to add that the assessee shall be provided adequate opportunity of being heard. This ground is allowed for statistical purposes
In the result, the appeal of the assessee in is partly allowed for statistical purposes. The order is pronounced in the open court on 16.10.2017.