FOODWORLD SUPERMARKETS PVT. LTD.,BANGALORE vs. DCIT, BANGALORE
What did the Tribunal hold?
The Tribunal upheld the disallowances made by the lower authorities. It found that the assessee had not furnished documentary evidence to substantiate the claimed expenses before any of the authorities.
What were the facts?
The assessee appealed against the disallowance of 10% of temporary outsource cost and 50% of stores closure expenses. The assessee claimed these expenses were incurred for business purposes and duly vouched.
What were the issues?
Whether the disallowances made by the Assessing Officer and confirmed by the CIT(A) for stores closure expenses and temporary outsource cost were justified, particularly in light of the lack of documentary evidence.
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, BANGALORE BENCH ‘C’, BANGALORE
Before: SHRI A. K. GARODIA & SHRI VIJAY PAL RAO
PER SHRI A.K.GARODIA, AM
Both these are assessee’s appeals which are directed against two separate orders of the ld.CIT(A)-3, Bangalore dated 28-01-2016 for assessment year 2011-12 & 2012-13.
The grounds raised by the assessee in for assessment year 2011-12 are as under;
“1. The learned Assessing Officer had erred in passing the order in the manner passed by him and the learned Commissioner of Income-tax has erred in confirming the same. The impugned order passed by Assessing Officer is to be quashed in toto.
2. In any case and without prejudice the learned Assessing Officer has erred in disallowing 10% of temporary outsource cost and 50% of the stores closure expenses and the learned Commissioner of Income-tax (Appeals) has confirmed the disallowances.
3. The facts and circumstances of the case have not been properly appreciated by the lower authorities and the disallowances are made purely on adhoc and estimated basis.
4. The lower authorities have also erred in holding that the appellant has not produced documentary evidence. All the expenses are duly vouched and supportingly evidenced.
5. On proper appreciation of facts and circumstances of the case and the evidence available, it is clear that the entire expenditure on store closure and temporary outsourcing was incurred / done for the purpose of and in the course of carrying on business and the same is to be allowed as such and the disallowance made is to be deleted.
6. In view of the above and on other grounds of the appeal to be adjusted at the time of hearing, it is requested that the impugned assessment order be quashed or at least the disallowances as made and sustained be deleted.
Grounds raised in for the AY: 2012-13 are as under;
“1. The learned Assessing Officer had erred in passing the order in the manner passed by him and the learned Commissioner of Income-tax has erred in confirming the same. The impugned order passed by Assessing Officer is to be quashed in toto.
2. In any case and without prejudice the learned Assessing Officer has erred in disallowing 10% of temporary outsource cost and 50% of the stores closure expenses and the learned Commissioner of Income-tax (Appeals) has confirmed the disallowances.
3. The facts and circumstances of the case have not been properly appreciated by the lower authorities and the disallowances are made purely on adhoc and estimated basis.
4. The lower authorities have also erred in holding that the appellant has not produced documentary evidence. All the expenses are duly vouched and supportingly evidenced.
5. On proper appreciation of facts and circumstances of the case and the evidence available, it is clear that the entire expenditure on store closure and temporary outsourcing was incurred / done for the purpose of and in the course of carrying on business and the same is to be allowed as such and the disallowance made is to be deleted.
6. In view of the above and on other grounds of the appeal to be adjusted at the time of hearing, it is requested that the impugned assessment order be quashed or at least the disallowances as made and sustained be deleted.
Notice of hearing was sent to the assesee by RPAD, as per the address given by the assessee in form no.36, but the notice has come back unserved with the remark of postal department. “left return to sender”. No new address has been furnished by the assessee. Under these facts, it is not possible to serve notice on the assessee and hence, we decide these appeals of the assessee ex parte qua-assessee.
The ld. DR of the assessee supported the order of the ld.
CIT(A).
We have considered the submissions of the ld. DR of the revenue and have gone through the orders of the ld. CT(A) in both these years.
We find that a categorical finding has been given by the ld.
CIT(A) that there is specific finding of the AO that assessee has not furnished the documentary evidence for substantiating the expenses claimed and therefore, the estimated disallowance of 50% of stores closure expenses claimed by the assessee is justified. Since no documentary evidence has been furnished before any of the authorities, we find no reason to interfere in these two orders of the ld. CIT(A).
In the result, both the appeals of the assessee are dismissed.
Order pronounced in the open court on the date mentioned on the caption page.
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