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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI MANOJ KUMAR AGGARWAL
Aforesaid appeal by the assessee is directed against the order dated 27th December 2013, passed by the learned Commissioner (Appeals)–33, Mumbai, for the assessment year 2009–10.
Brief facts are, the assessee an individual is a franchise of Amway India Enterprise. For the assessment year under consideration,
2 Shri Narendra Pratap S. Singh assessee filed his return of income on 30th September 2009, declaring total income of ` 12,10,150. In the course of assessment proceedings, the Assessing Officer while verifying the genuineness of various expenses claimed by the assessee found that out of expenditure claimed on account of conference and meeting made in cash the assessee could not furnish supporting bills and vouchers. Therefore, in absence of proper evidence, the Assessing Officer disallowed amount of ` 4,79,780 being 50% of the total expenditure claimed. Further, he found that the assessee has claimed business promotion expenses of ` 5,63,198. Alleging that the entire expenditure was made by cash and not supported by bills and vouchers, he disallowed 70% of the expenditure claimed, which worked out to ` 3,94,234. He also noticed, assessee had claimed expenditure towards bank charges and interest amounting to ` 3,33,369. From the ledger account, he found that such expenditures incurred are towards late fee for credit card payment, closure charges for credit card, over limit fee, personal draft credit charges, over time fee, etc. Looking at the nature of expenditure, the Assessing Officer held that they are not allowable. As far as interest on loan is concerned, he observed either it relates to personal loan or towards pre–closure interest. He also observed, the assessee was not able to establish that the interest expenditure was with reference to commission income earned by him. Accordingly, he disallowed the 3 Shri Narendra Pratap S. Singh amount of ` 3,33,369. Of–course, the Assessing Officer also made part disallowance out of telephone charges and vehicle expenditure and full disallowance of electricity charges. However, since the assessee had accepted such disallowances by not raising any ground before us, we are not concerned with these disallowances. Being aggrieved of the disallowance referred to above, the assessee preferred appeal before the learned Commissioner (Appeals), who also confirmed the disallowance.
Learned Authorised Representative submitted, all the expenditures incurred by the assessee are supported by genuine bills and vouchers and allegation of the Assessing Officer that assessee failed to furnish bills and vouchers before him is not correct. He submitted, learned Commissioner (Appeals) also decided the appeal ex–parte as a result of which assessee did not get the opportunity to produce the evidences before the learned Commissioner (Appeals). He, therefore submitted, given an opportunity, assessee would be able to prove the expenditure incurred by producing necessary evidence before the Assessing Officer.
Learned Departmental Representative has no serious objection if one more opportunity is given to the assessee to prove the expenditures claimed.
4 Shri Narendra Pratap S. Singh
We have considered the submissions of the parties and perused the material available on record. The part disallowance of expenditure which are subject matter of appeal before us are the following:–
i) Meeting and conference ` 4,79,780 ii) Business promotion expenses ` 3,94,234 iii) Bank charges and interest ` 3,33,369
The Assessing Officer has disallowed a part of the expenditure claimed under the aforesaid heads alleging non–furnishing of supporting bills and vouchers. However, it is the claim of the assessee that all expenditures claimed are supported by genuine bills and vouchers and which the assessee claimed to have produced before the Assessing Officer. Considering the fact assessee’s appeal before the learned Commissioner (Appeals) was decided ex–parte, for whatever may be the reason, without entering into the controversy as to whether the assessee has produced supporting bills and vouchers against the expenditure claimed before the Assessing Officer against the expenditure claimed, we are inclined to afford one more opportunity to the assessee to prove its claim by producing corroborating evidence. We make it clear, our aforesaid direction is only confined to the expenditures incurred towards meeting and conference, business promotion and bank charges and interest. The 5 Shri Narendra Pratap S. Singh Assessing Officer is directed to decide the issue after affording reasonable opportunity of being heard to the assessee.
In the result, appeal is allowed for statistical purposes. Order pronounced in the open Court on 30.11.2016