KONNAGAR SAMABAYA BANK LIMITED,HOOGHLY vs. ACIT, CIRCLE - 23, HOOGHLY, HOOGHLY

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ITA 2108/KOL/2017Status: DisposedITAT Kolkata25 October 2018AY 2012-133 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed the donation of books expense of Rs. 6,000/- in full. For refreshment and entertainment expenses, it restricted the disallowance to 15% of the claimed amount, directing the AO to disallow Rs. 15,177/-.

What were the facts?

The Assessing Officer disallowed refreshment and entertainment expenses of Rs. 1,01,182/- and donation of books expenses of Rs. 6,000/- for lack of proper bills and satisfactory explanation. The CIT(A) confirmed these additions.

What were the issues?

Whether refreshment and entertainment expenses and donation of books are genuine business expenses and if disallowances made by the lower authorities were justified.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D”, BENCH KOLKATA

Before: SHRI S. S. GODARA, JM & DR. A.L.SAINI, AM

Hearing: 13/08/2018Pronounced: 25/10/2018

Appellant by : None Revenue by : Shri Robin Choudhury, Addl. CIT सुनवाई क� तार�ख / Date of Hearing : 13/08/2018 घोषणा क� तार�ख/Date of Pronouncement: 25/10/2018 आदेश / O R D E R

Per Dr. Arjun Lal Saini, AM:

1.

The captioned appeal filed by the assessee, pertaining to Assessment Year 2012-13, is directed against an order passed by the Ld. Commissioner of Income Tax (Appeals)-6, Kolkata in Appeal No.120/CIT(A)-6/Kol/2015-16 dated 22.06.2017, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), dated 11.03.2015.

2.

At the time of hearing none appeared on behalf of assessee in spite of issuance of notice for hearing more than one occasion and Ld. Departmental Representative(DR), was present for the appellant Revenue. In the absence of any appearance by the assessee, the appeal is being disposed of ex parte qua the assessee, after hearing Ld. DR for the Revenue on merits in terms of Rule 24 of the Income Tax Appellate, Tribunal, Rules, 1963.

3.

Grievances raised by the Assessee are as follows:

“1. The appellant being aggrieved with the appellate order by the Ld. CIT(A)-6 Kolkata without giving the opportunity of further hearing save and except the only date of hearing on 20.06.2017 preferred appeal before appellate tribunal for proper remedy and as per the said order of Ld. CIT(A)-6, nobody attended before Ld. CIT(A)-6 Kolkata.

2 Konnagar Samabaya Bank Ltd. Assessment Year: 2012-13 2. The LD. AO Circle 23, Hooghly was not meticulous in examining the documentary evidences produced at the time of hearing. The expenses which have been added back on account of refreshment & entertainment amounting to Rs. 1,01,182/- are genuine and incidental to business activities carried on by the assessee. Similarly the disallowance of expenses under the head donation of books awarded to the poor but meritorious students for Rs. 6000/- are not expedient since the documentary evidences in relation thereto were furnished at the time of hearing.

3. The appellant further prefers for withdrawal of dismissal by Ld. CIT(A)-6 Kolkata.

4. The appellant in view of the above fact preferred in quashing the said order & craves for more point at the time of hearing.”

4.

The brief facts qua the issue are that during the assessment proceedings the Assessing Officer noted that the assessee claimed an expenditure under the head refreshment & entertainment amounting to Rs. 1,01,182/- but no bills or vouchers were produced by the assessee in support of this expenditure. On scrutiny on books of account submitted by the assessee, the Assessing Officer noted that the expenses under the head refreshment and entertainment is not related to business activity of the bank therefore he disallowed the amount to the tune of Rs. 1,01,182/-.

5.

The Assessing Officer also noted that the assessee debited an amount of Rs. 6000/- under the head donation of books. The assessee could not furnish any satisfactory reply during the assessment proceedings therefore, the Assessing Officer made an addition of Rs. 6,000/-

6.

Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has confirmed the addition made by the Assessing Officer. Aggrieved, the assessee is in appeal before us.

7 After hearing the learned DR for the Revenue, we are of the view that the assessee is a bank and normally in case of a bank to entertain the customers and to maintain relationship with the customers, the assessee bank needs to incur refreshment and entertainment expenditure on account of tea, coffee, cold drinks

3 Konnagar Samabaya Bank Ltd. Assessment Year: 2012-13 etc.. The assessee submitted the books of account wherein the details of such expenditure are available. Therefore, it cannot be said that the entire expenditure is bogus hence to cover the misgivings as the assessee has not submitted vouchers bills etc., we restrict the addition @15% of Rs. 1,01,182/- and we direct the Assessing Officer to disallow the expenses to the tune of Rs. 15177/-. So far the expenses relating to donation of books etc. is concerned, we note that amount of donation of books is only at Rs.6,000/-, which is a very small amount. The said amount has been incurred by the assessee during the course of its business therefore, we allow Rs. 6000/- under section 37(1) of the Act.

8.

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

Order pronounced in the open court on this 25/10/2018. Sd/- Sd/- (S. S. Godara) (A. L. Saini) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER कोलकाता /Kolkata; Dated: 25/10/2018 RS, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant- Konnagar Samabaya Bank Ltd. 1. ��यथ� / The Respondent.- ACIT, Circle 23, Hooghly. 2. आयकर आयु�त(अपील) / The CIT(A), 3. 4. आयकर आयु�त / CIT �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, कोलकाता / DR, ITAT, Kolkata 5. गाड� फाईल / Guard file. 6.

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