What did the Tribunal hold?

The Tribunal found that the assessee failed to prove the actual incurrence of expenses, especially with cash payments. However, the lower authorities also failed to provide comparative data from other assessment years. Therefore, the disallowance was restricted to 5% of the claimed expenses.

The assessee claimed expenses for transport, carriage, and wages amounting to ₹31,36,201. The lower authorities disallowed 20% of these expenses. The assessee appealed this disallowance.

What were the issues?

Whether the disallowance of claimed expenses was justified, and if so, to what extent, considering the lack of proof and comparative data.

Swapan Ghosh, Howrah vs ACIT | ITAT Kolkata 2018

Income Tax Appellate Tribunal, KOLKATA BENCH “SMC” KOLKATA

Before: Shri S.S, Godara

This assessee’s appeal for assessment year 2013-14, arises against the Commissioner of Income-tax (Appeals)-14, Kolkata’s order dated 26.04.2018 passed in case No.07/CIT(A)-14/Cir-47/2016-17 involving proceedings u/s. 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

The assessee’s only grievance raised in the instant appeal challenging correctness of both the lower authorities disallowing its transport, carriage outward, carriage inward, wages claimed of ₹18,73,088/-, ₹5,28,210/-, ₹4,33,945/- & ₹3,00,958/-; respectfully aggregating to ₹31,36,201/- @ 20% coming to ₹6,27,240/- during the course of assessment as affirmed in the lower appellate proceedings. I find that neither the assessee has been able to prove the impugned expenses to have been actually incurred for the purpose of its manufacturing business since involving cash

ITA No.1331/Kol/2018 A.Y. 2013-14 Swapan Ghosh Vs. ACIT, Cir-47, Kol. Page 2 payments nor the lower authorities have drawn any comparison chart vis-à-vis the corresponding claims in proceeding and succeeding assessment years. I therefore restrict the impugned disallowance @ 20% to @ 5% only with a rider same shall not be treated as a precedent in any other case. The assessee gets part relief therefore in above terms.

This assessee’s appeal is accepted partly. Order pronounced in open court on 10/10/2018 (S.S. Godara) Judicial Member Kolkata, *Dkp/Sr.PS "दनांकः- 10/10/2018 कोलकाता आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-Swapan Ghosh, C/o Sri S.L. Kochar, Advocate, 5, Ashutosh Chowdhury Avenue, Kolkata-19

""यथ"/Respondent-ACIT, Circle-47, 3 Govt. Place (West), Kolkata-001 3. संबं"धत आयकर आयु%त / Concerned CIT 4. आयकर आयु%त- अपील / CIT (A) 5. &वभागीय ")त)न"ध, आयकर अपील"य अ"धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड+ फाइल / Guard file. By order/आदेश से, // Sr. Private Secretary, Head of Office/DDO आयकर अपील"य अ"धकरण, कोलकाता ।

SWAPAN GHOSH,HOWRAH vs. ACIT, CIRCLE - 47, KOLKATA, KOLKATA

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