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Income Tax Appellate Tribunal, “D” BENCH : KOLKATA
Before: Hon’ble Shri M.Balaganesh, AM & Shri S.S.Viswanethra Ravi, JM]
ORDER Per M.Balaganesh, AM
This appeal by the Assessee arises out of the order of the Learned Commissioner of Income Tax(Appeals)-1, Kolkata [in short the ld CIT(A)] in Appeal No.966/CIT(A)- 1/Cir-3/2011-12 dated 04.05.2016 against the order passed by the ACIT, Circle-3, Kolkata [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short “the Act”) dated 23.12.2011 for the Assessment Year 2009-10.
The ground no. 1 raised by the assessee was stated to be not pressed by the Ld. AR at the time of hearing for which necessary endorsement has been made by him in our file. Accordingly, ground no.1 is dismissed as not pressed.
The only issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in upholding the estimated disallowances made by the Ld. AO towards general
2 Satvik Enterprises Ltd. A.Yr. 2009-10 charges (Rs. 112882/-) at 25% of total general charges; travelling and conveyance (Rs. 198876/-) at 10% of the total travelling and conveyance and miscellaneous items on export expenses (Rs. 311273/-) at 20% of total expenses thereon. This action of the Ld. AO was upheld by the Ld. CIT(A). Aggrieved the assessee is in appeal before us on the following grounds:
2. That on the facts and circumstances of the case Ld. CIT(A) is wrong and unjustified in confirming the action of Assessing Officer who disallowed Rs. 1,12,882/- out of general charges @ 25% without showing any basis and ignoring the fact that expenses claimed works to 0.02% of total turnover.
3. That on the facts and circumstances of the case Ld. CIT(A) is wrong and unjustified in upholding the action of Assessing Officer who disallowed Rs. 1,98,876/- out of Travelling & Conveyance @ 10% without showing any basis.
4. That on the facts and circumstances of the case Ld. CIT(A) is wrong and unjustified in confirming the action of Assessing Officer who disallowed Rs. 3,11,273/- out of miscellaneous items on Export expenses without marshalling the basis of disallowance @ 20% and ignoring the fact that such claim works to 0.1% of total export value.
5. That the appellant craves leave to add, alter, adduce or amend any ground or grounds on or before the date of hearing of the appeal.
We have heard the rival submissions. We find that the assessee is engaged in import, export and wholesale trading of metal such as manganese ore, ferro manganese, silicon manganese etc. The return of income for the assessment year 2009-10 was electronically filed by the assessee company on 24.09.2009 disclosing the total income of Rs. 1,25,41,170/-. The basis of disallowance of various expenses made by the Ld. AO which are in dispute before us are as under:
3 Satvik Enterprises Ltd. A.Yr. 2009-10 Nature of Expenses As per books of Amount of Remark accounts Disallowances 1.General Expenses 4,51,530 1,12,882 25% of total general expenses 2.Travelling 19,88,763 1,98,876 10% of total Conveyance travelling & Expenses Conveyance Expenses 3. Other Misc. 15,56,369 3,11,273 20% of the total expenses related to other misc. export expenses related to exports.
The Ld. AR stated that all the details and documents as requisitioned by the Ld. AO were duly filed before him at the time of assessment proceedings which were also examined by the Ld. AO. He further stated that this fact is also mentioned in page 1 of the assessment order. Having done so, he ought not to have stated the no details were filed by the assessee in respect of aforesaid expenditure warranting disallowances on the estimated basis. However, he fairly stated later all these issues be examined afresh and assessee would furnish all the details as required by the Ld. AO and prayed for de novo set aside of these issues. In response to this, the Ld. DR vehemently objected for the same and relied on the orders of the lower authorities. We find that the Ld. AO in paragraph no. 2 of the assessment order had stated that the assessee had furnished various details and documents as requisitioned by him and the same were duly examined by him. However, while making the disallowances of the aforesaid expenditures on an estimated basis, he had stated that no details were filed by the assessee. This proves that there is a contradictory statement made by the Ld. AO. Hence, we deem it fit and appropriate to remand these issues which are in dispute before 3
4 Satvik Enterprises Ltd. A.Yr. 2009-10 us to the file of the Ld. AO for de novo adjudication in accordance with law. Needless to mention that the assessee be given a reasonable opportunity of being heard. Accordingly, ground nos. 2 to 5 raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Court on 05.01.2018