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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: Sri S.S. Godara & Sri M. Balaganesh
Assessment Year: 2011-12 M/s. Darshanlal Anand Prakash & Sons (P) Ltd………….……………….…...……..…….............Appellant Nilhat House 6th Floor 11, R.N. Mukherjee Road Kolkata – 700 001 [PAN : AADCB 3299 C] Vs. Deputy Commissioner of Income Tax, Circle-4(1), Kolkata…….....................…...........Respondent Appearances by: Shri Sujoy Sen, Advocate, appeared on behalf of the assessee. Shri Sankar Halder, Addl. CIT D/R. appearing on behalf of the Revenue. Date of concluding the hearing : December 27th , 2018 Date of pronouncing the order : January 1st , 2019 ORDER Per Bench :- This is an appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeals) -2, Kolkata, (hereinafter referred to as the “Ld. CIT(A)”), dated 05/01/2018, arising out the assessment order of the Assessing Officer (hereinafter referred to as the “Ld. AO”), passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), relating to Assessment Year 2011-12.
The only issue to be decided in this appeal is as to whether the Id. CIT(A) was justified in confirming the estimated adhoc disallowance of Rs.50,000/- made by the Id. Assessing Officer on account of miscellaneous expenses and Rs.1 Lakhs/- towards sales promotions expenses in the facts and circumstances of the case.
The brief facts of this issue is that the assessee is Private Limited Company, engaged in the business of growing, manufacturing and selling of tea. The return of income for the Assessment Year 2011-12 was filed by the assessee company on 26/09/2011, declaring total income of Rs.91,79,330/-. The Id. Assessing Officer observed in the assessment order that the assessee had claimed miscellaneous expenses of Rs.24,37,548/- and sales promotion expenses of Rs.7,24,792/-, which were debited in Assessment Year: 2011-12 M/s. Darshanlal Anand Prakash & Sons (P) Ltd the profit and loss account and claimed as deduction in the return of income. The details of all the expenses were indeed furnished by the assessee before the Id. Assessing Officer, which fact has been duly acknowledged by the Id. Assessing Officer in first paragraph of the assessment order. The Id. Assessing Officer, however, resorted to making estimated adhoc disallowance of Rs.50,000/- towards miscellaneous expenses of Rs. 1 Lakh/ - towards sales promotion expenses. The assessee argued before the Id. CIT(A) that the Id. Assessing Officer had not pointed out any specific item of expenditure in both the above heads which were found unsupported or unverifiable. It was pleaded that the entire books of accounts, duly audited, together with bills and vouchers, were indeed furnished before the Id. Assessing Officer and hence there is no question of making any estimated adhoc disallowance thereon. The Id. CIT(A) without appreciating these contentions simply upheld the action of the Id. Assessing Officer.
Aggrieved, the assessee is in appeal before us.
We have heard rival submissions. It is not in dispute that the books of account together with the bills and vouchers were indeed furnished before the Id. Assessing Officer by the assessee. We find that the lower authorities had given a categorical finding that certain expenses debited in the above two heads were found to be unverifiable. In that scenario, certainly some estimated disallowance of expenses is required to be made. In our considered opinion, disallowance of Rs.25,000/- towards miscellaneous expenses and Rs.50,000/- towards sales promotion expenses would meet the ends of justice. Accordingly, the grounds raised by the assessee are partly allowed.
In the result appeal of the assessee is partly allowed.