RAM KUMAR SHIVHARE,SHIVPURI vs. DCIT ACIT 3(1) GWALIOR, GWALOR

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ITA 135/AGR/2023Status: DisposedITAT Agra03 February 2025AY 2015-16Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI M. BALAGANESH (Accountant Member)4 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The tribunal deleted the disallowance of Rs. 7,13,000/- as it pertained to a prior year and was not a statutory liability. The 20% disallowance on expenses was reduced to 5% in the interest of justice.

What were the facts?

The assessee appealed against the disallowance of Rs. 7,13,000/- as sundry creditors and a 20% disallowance on total expenses. The sundry creditor amount related to a prior year and was not a statutory liability. The 20% disallowance was made on an estimation basis without specific shortcomings being pointed out.

What were the issues?

Whether a sundry creditor amount from a prior year can be disallowed under Section 68 or 43B, and the validity of an estimated disallowance on expenses.

Which sections of the Income-tax Act were involved?

Section 68,Section 43B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA BENCH, “DB” AGRA

Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH

Hearing: 03.02.2025Pronounced: 03.02.2025
1.

This assessee’s appeal for assessment year 2015-16, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1055148029(1) dated 16.08.2023, involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

Heard both the parties. Case file perused.

This assessee’s appeal raises the following substantive grounds: “1. That Under the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of Rs. 7,13,000/- under the head of sundry creditor which is not pertaining to year under consideration but related to prior 2013-14 which is illegal, against Principle of natural justice and unjustified. Please be deleted.

2. That under the facts and circumstances of the case in law, that the order passed by the Commissioner of Income Tax (Appeals) has erred in disallowing the addition of Rs. 7,13,000/- without any basis, arbitrary, Capricious and without considering the ruling quoted by the appellant is unjustified, illegal and which against the principles of natural justice Please be deleted 3. That under the facts and circumstances of the case and in law, the learned CIT(Appeals) as well as Assessing Officer has erred disallowing under the various head @ 20% out of the total expenses of Rs. 16,20,305/- amounting to Rs. 3,24,061/- which is highly excessive, arbitrary, capricious and without any basis and also against principle of natural justice.

3.

We advert to the assessee’s former substantive grounds challenging section 68 addition of Rs.7,13,000/- representing sundry creditors amounting to Rs.16,07,527/-, including a sum of Rs.7,13,000/- in case of Ku. Vaishali disallowed under section 43B by the Assessing Officer in his assessment order dated 27.12.2017 and restricted to the extent of the foregoing latter figure only in the lower appellate discussion. Learned departmental representative could hardly dispute the clinching fact that the impugned sum has remained unpaid since AY: 2013-14, and therefore, neither the 2 | P a g e same could be disallowed under section 43B, since not representing any statutory liability on actual payment, nor under section 68/69 of the Act once not credited or invested in the relevant previous year. We thus see no merit in the impugned former additions of Rs.7,13,000/- which stands deleted in very terms. The assessee’s succeeds in his instant former twin substantive grounds.

4.

Next comes the estimated disallowance of assessee’s various heads of expenditure, totaling to Rs.16,20,305/- @ 20% coming to Rs.3,24,061/-, on estimation basis. Both the learned representatives could hardly dispute that neither the assessee has been able to specifically discharge his onus of proving the impugned expenditure, nor the department authorities could pinpoint any specific shortcoming(s) in the corresponding detailed files.

5.

Be that as it may, we are of the considered view that the impugned disallowance made by the learned lower authorities @ 20% deserves to be upheld only to that @ 5% in the larger interest of justice with a rider that the same shall be treated as a precedent. Necessary computation shall follow as per law.

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