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Income Tax Appellate Tribunal, DELHI BENCH : SMC-II, NEW DELHI
Before: SHRI SUNIL KUMAR YADAV
Date of hearing : 14.09.2016 Date of Pronouncement : 16.09.2016 O R D E R This appeal is preferred by the assessee against the order dated 18.01.2016 of the CIT(Appeals)-20, New Delhi inter alia on the following grounds:-
“1. That on the facts and in the circumstances of the case and in law the Learned Commissioner of Income Tax (Appeal) erred in dismissing the appeal of appellant firm and retaining addition/disallowance of Rs.1,62,931/- in the order passed by Ld. Deputy Commissioner of Income Tax Circle- 63(1) New Delhi u/s 143(3) of the Income Tax Act, 1961.
That Ld. CIT (Appeal)-20 New Delhi grossly erred in law and on facts reducing Adhoc disallowance by applying mechanical rate of 10% out of "Car repair & maintenance, Advertisement & publicity, telephone and travelling expenses" amounting to Rs.1,22,967/ - (10% of 12,29,670/ -).
That Ld. CIT (Appeal)-20 New Delhi grossly erred in law and on facts reducing Adhoc disallowance by applying mechanical rate of 10% out of telephone expenses amounting to Rs.39,964/ - (10% of 3,99,646/ -).
That the order passed by the Ld. CIT (Appeal) New Delhi, being erroneous in law and on facts deserved to be deleted.
5. The appellant craves leave to add or amend any ground of appeal
.”
2. During the course of hearing, the ld. counsel for the assessee has opted not to press ground No.1. Accordingly the same is dismissed being not pressed.
3. With regard to ground Nos.2 & 3, the ld. Counsel for the assessee has contended that the AO has made adhoc additions without pointing out any defects in the claim of expenditure made by the assessee. Therefore, the adhoc additions deserve to be deleted.
4. The ld. DR has submitted that there is every possibility of personal use of vehicles and telephones, therefore the AO has made reasonable disallowance.
I have carefully examined the orders of lower authorities in the light of rival submissions and I find that the assessee is a firm engaged in business of processing, selling & trading of rice and has claimed the expenditure on car and telephones. Nothing has been placed on record to establish that it has never used telephone or the car for personal use.
Therefore, the element of personal use cannot be ruled out. In light of these facts, some disallowances are to be made. Since the CIT(Appeals) has restricted the disallowance from 20% made by the AO to 10% of total claim, having noted that there is possibility of personal use of vehicles and telephones. I find no infirmity therein. Accordingly, I confirm the order of CIT(Appeals).
In the result, the appeal of the assessee is dismissed.
Pronounced in the open court on this 16th day of September 2016.