What did the Tribunal hold?

The Tribunal, considering the nature of expenditure and the meager disallowance, reduced the disallowance to Rs. 50,000, acknowledging that some expenditures might not have specific bills.

The assessee claimed expenditure on property improvement, but the Assessing Officer disallowed Rs. 1,65,000 due to lack of verifiable vouchers. The CIT(A) restricted the disallowance to Rs. 1 lac.

What were the issues?

Whether the disallowance of expenditure on property improvement is justified when verifiable vouchers are not fully available, and if so, to what extent.

Inder Singla, Pehowa vs ITO | ITAT Chandigarh 2018

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 26.4.2018 of the Commissioner of Income Tax (Appeals)-2, Gurgaon [hereinafter referred to as ‘CIT(A)’].

The assessee has taken the three effective grounds of appeal. At the outset, Ld. Counsel for the assessee has stated at bar that as per the instructions of his client, he does not press ground Nos. 1 & 3 of the appeal. Ground Nos. 1 & 3 of the appeal are, therefore, dismissed as not pressed.

The only ground left for adjudication is ground No.2, wherein, the assessee has agitated the conformation of addition of Rs. 1 lac out of the expenditure, claimed to have been incurred on improvement of the

ITA No. 940/Chd/2018- Sh. Inder Singla, Pehowa 2 property. The Ld. CIT(A) restricted the disallowance to Rs. 1 lac out of the disallowance made by the Assessing officer of Rs. 1,65,000/- observing that the assessee could not produce the verifiable vouchers, rather, some of the vouchers in respect of the items of expenditure were self-made vouchers.

Before us, Ld. Counsel for the assessee has submitted that in the case of improvement of the building, there are certain items and nature of expenditure in respect of which no specific bills or invoices are available. However, whenever the expenditure is incurred, the same has to be recorded by way of self-made vouchers.

Considering the meager sum of disallowance of Rs. 1 lac and also considering the above submissions of the Ld. Counsel for the assessee, in our view, interest of justice will be served if the disallowance is restricted to Rs. 50,000/-. We order accordingly.

In the result, the appeal of the assessee is partly allowed. Order pronounced in the Open Court on 28.11.2018.

Sd/- Sd/- ( बी , आर . आर . कुमार / B.R.R. KUMAR) (संजय गग� / SANJAY GARG ) लेखा सद�य/ Accountant Member �या�यक सद�य /Judicial Member

Dated : 28.11 .2018 “आर.के.” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

ITA No. 940/Chd/2018- Sh. Inder Singla, Pehowa 3

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

INDER SINGLA,PEHOWA vs. ITO, W-1, KURUKSHETRA

What did the Tribunal hold?

What were the facts?

What were the issues?

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