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Income Tax Appellate Tribunal, “SMC” BENCH : KOLKATA
Before: Hon’ble Shri J.Sudhakar Reddy, AM]
For the Appellant : Shri Subash Agarwal, Advocate For the Revenue : Shri Saurav Kumar, Addl. CIT Sr. DR Date of Hearing : 01.11.2018 Date of Pronouncement : 28.11.2018 ORDER
This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-14, Kolkata dated 16.01.2018 for the assessment year 2012-13, passed u/s 250 of the Income Tax Act, 1961 (in short the Act). There is a delay of 82 days in filing of the appeal. After perusing the petition for condonation, I am convinced that the assessee was prevented by sufficient cause from filing this appeal. Hence I condone the delay and admit the appeal.
The assessee is a company and is in the business of manufacturing and dealing in hosiery goods. The issues that arises from my consideration in this regard are, the disallowance of bad debts and ad hoc disallowance of various expenditures.
After hearing rival submissions and on a careful consideration of the facts and circumstances of the case, a perusal of papers on record and orders of the lower authorities below, as well as case law cited, I hold as follows.
Indiana Textiles Mill A.Yr.2012-13 4. The bad debts of Rs. 2,55,289/- has to be allowed as deduction as it is not disputed that the assessee has written off the same in its books of accounts. These issues covered in favour of the assessee by the decision of Hon’ble Supreme Court in the case of TRF reported in 323 ITR 397 (SC). Accordingly, ground no. 2 raised by the assessee is allowed.
Ground nos. 3, 4, 5 and 6 are in the issues of ad hoc disallowance of travelling expenses, telephone and conveyance expenses, general expenses and motor car expenses. The Assessing Officer disallowed 20% of these expenses, on the ground that they may have been some personal use. The learned counsel for the assessee relied on the decision of Hon’ble Gujrat High Court for the proposition that there cannot be any personal expenditure in the case of limited company registered under the Company’s Act. Even otherwise it was submitted that the assessing officer has, in an ad hoc manner, restricted the claim of the assessee. I agree with the contentions of the assessee that company cannot be said to have incurred expenses of personal nature. As the disallowance has been made on the ground that part of the expenditure incurred is of a personal nature, I delete the disallowance and allow this ground of the assessee.
In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on 28.11.2018