RAJENDRA PRASAD BOTHRA,KOLKATA vs. ACIT, CIRCLE - 43, KOLKATA, KOLKATA

This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax-(A)-13, Kolkata relating to A.Y. 2011-12.

There are two issues that arise before me in this appeal. The first issue is disallowance u/s 40A(3) of the Income Tax Act, 1961 (Act) and the second issue is disallowance of various expenses claimed. 3. After hearing the rival contentions I find that the amounts in question paid in cash was nothing but reimbursement of expenses incurred by the employees of the assessee towards travelling, boarding and lodging expenses. The AO has not doubted the genuineness of this expenditure. Each single expenses is not more than Rs.20,000/- in cash. The employees of the assessee were reimbursed in cash for the expenditure incurred by them on tour towards travelling, boarding and lodging. 4. The ld. CIT(A) upheld the disallowance on the ground that the employees were not able to demonstrate that they had exceptional circumstances which led to their being reimbursed by the company in cash. He also held that genuineness of the transactions is not the criteria for disallowance u/s 40A(3) of the Act.. 5. In my view, the grounds on which disallowance is made is misconceived. The expenditure in question is that of the assessee company. Each item of expenditure was Rajendra Prasad Bothra A.Y. 2011-12 2 not more than Rs.20,000/- in cash and such individual item of expenditure was incurred by the company thorugh its employees. The employee of the assessee are only agents of the company. It is not the payment made to the employees for their benefit. Hence section 40A(3) of the Act does not apply in the facts and circumstances of the case. Hence this addition is deleted.

Ground No.2 is disallowance for various expenditures claimed. The ld. CIT(A) has recorded that the expenditure was self made vouchers under various heads. The assessee submits that no particular defect has been pointed out and there is no reason to interfere in the finding of the first appellate authority as self made vouchers could not be fully supported by evidence. We hold the same and dismiss ground no.2 raised by the assessee.

In the result the appeal of the assessee is allowed in part.