M/S M/S EICS CONSULTANCY PVT LTD.,,BILASPUR(CG) vs. THE DY. COMMISSIONER OF INCOME TAX,, BILASPUR(CG)

Brief facts of the case are that the assessee company filed its return of income for the assessment year under consideration declaring the total income of Rs. 83,80,600/-. Since the case was selected for scrutiny, the AO issued notice u/s 143 (2) and 142 (1) of the Act. In response thereof the authorized representative of the assessee appeared before the 2 Assessment Year: 2011-12

Apart from the aforesaid additions the AO made other disallowances and determined the total income of the assessee at Rs. 1,91,22,636/-. The assessee challenged the assessment order before the Ld. CIT (A). The Ld. CIT (A) confirmed both the additions. The assessee is in appeal against the said order passed by the Ld. CIT(A).

The assessee has preferred this appeal before the Tribunal on the following grounds:-

That under the facts and the law, the learned CIT (A) further erred in not accepting the additional evidences filed U/R 46A viz. Bank Statements, ITR, audited Balance Sheet, ledger account and confirmation etc. of above creditor i.e. M/s Delta Ventures Pvt. Ltd. and others, though specific prayer U/R 46A to admit the same, was made before him.

The Ld. CIT (A) further erred in observing that prayer U/R 46A to admit additional evidences was not made.

That under the facts and the law, the learned CIT (A) further erred in confirming the disallowance of Rs. 6,00,000/- out of Rs. 62,94,363/- made by the Ld. AO under the head travelling expense on adhoc basis.

At the outset, the Ld. counsel for the assessee submitted that the impugned order passed by the Ld. CIT (A) is erroneous and bad in law as the Ld. CIT (A) has erred in not allowing the additional evidence filed under rule 46A of the Income Tax Rules, 1962 (Rules) i.e., ITR audited balance sheet, ledger account and confirmation of the creditor M/s Delta Ventrade Pvt. Ltd. The Ld. counsel further submitted that since

Regarding disallowance of 6,00,000/- out of Rs. 62,94,363/- made by the Ld. AO under the head travelling expense on adhoc basis, the Ld. counsel submitted that since all the relevant details were submitted before the AO the Ld. CIT(A) ought to have deleted the disallowance made by the AO. The Ld. counsel further submitted that since, the Ld. CIT(A) has confirmed the addition without giving any valid reason, the findings of the Ld. CIT(A) is liable to be set aside.

On the other hand, the Ld. Departmental Representative (DR) relying on the concurrent findings of the authorities below submitted that since the assessee has failed to substantiate its contention before the authorities below, there is no infirmity in the impugned order. Hence, there is no merit in the appeal of the assessee.

We have heard the rival submissions and perused the material on record. So for as the first ground of appeal is concerned, we notice that the assessee had made a request vide application dated 22.07.2015 to the Ld. Commissioner of Income Tax for admitting the additional evidence submitted before him. The Ld. counsel further submitted that the assessee could not file the aforesaid documents before the AO as the 5 Assessment Year: 2011-12

We notice that the Ld. CIT(A) has rejected the additional evidence for the reason that the assessee had submitted the documents without any application under Rule 46A of the Rules. However, perusal of the copy of application for additional evidence, which is at page 37&38 of the paper book, it cannot be said that the assessee has not made any request for admission of additional ground. Under these circumstances, we are of the considered view that the assessee should get an opportunity to present its case in the light of the additional evidence produced before the Ld. CIT (A). We accordingly set aside this ground of appeal to the file of AO with the direction to decide this ground of appeal afresh in the light of the additional evidence produced before the Ld. CIT (A) after hearing the assessee.

The second ground of appeal pertains to disallowance of Rs. 6,00,000/- out of the total amount of Rs. 62,94,363/- claimed as expenses on travelling. We notice that the Ld. CIT (A) has confirmed the addition holding that the expenses on personal visit of Director are also included in these expenses claimed by the assessee and the assessee has not maintained the proper record to establish the business necessity of such tours. The Ld. counsel for the assessee before us contended that all the relevant records were produced before the authorities below to substantiate the claim of expenses on travelling. However, no documentary evidence was shown by the Ld. counsel to rebut the findings of the authorities below. In our considered opinion, the disallowance confirmed by the Ld. CIT (A) is below 10% of the total expenditure claimed, which in our considered view is just and reasonable in the light of the facts of the case and the evidence available on record. Therefore, we do not find any merit in the contention of the Ld. counsel for the assessee. Accordingly, we sustain the addition confirmed by the Ld. CIT(A) and dismiss this ground of appeal of the assessee. In the result, appeal filed by the assessee for assessment year 2011- 2012 is partly allowed for statistical purposes.