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Income Tax Appellate Tribunal, ‘A’ BENCH, KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Shri Sanjay Awasthi
Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 27th February, 2024 passed for Assessment Year 2014-15.
ITA No. 938/KOL/2024 (A.Y. 2014-2015) Uniworth Limited 2. The assessee has raised seven grounds of appeal. However, in brief, its grievances revolve around two issues, namely- (a) whether any disallowance deserves to be made out of travelling expenses? (b) whether the assessee is eligible to claim the benefit of set off or brought forward losses?
With the assistance of ld. Representatives, we have gone through the record carefully. It emerges out from the record that the assessee has filed its return of income on 23.09.2014 declaring ‘NIL’ income. The ld. Assessing Officer has passed an assessment order under section 143(3) on 31.12.2016, whereby he has determined the taxable income of the assessee at Rs.76,75,997/-. One of the additions made by the ld. Assessing Officer is disallowance out of travelling expenses. The finding recorded by the ld. Assessing Officer reads as under:- “Disallowance of Travelling expenses : It is noticed that the Profit & Loss Account of the assessee that the assessee has debited an amount of Rs.76,78,000/- regarding travelling expenses. The A/R of the assessee was asked to produce the proper bills/vouchers to substantiate its claim but he has failed to produce all the bills/vouchers and some expenses are internally vouched. Use of these expenses for personal purposes may not be ruled out. In absence of full supporting bills/vouchers, and for the reason discussed above 10% of total claim of Rs.7,67,800/- is disallowed and added back to the total income of the assessee. [Addition: Rs.7,67,800/-]”.
Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee.
ITA No. 938/KOL/2024 (A.Y. 2014-2015) Uniworth Limited 5. The ld. Counsel for the assessee submitted that the assessee is a Public Limited Company. The ld. Assessing Officer has not recorded anything as to how 10% of the expenses deserves to be disallowed. He made reference to a large number of decisions, whose copies have been placed on record. His main emphasis is on the decision of the Hon’ble Gujrat High Court in the case of Sayaji Iron & Engineering Co. -vs.- CIT reported in 253 ITR page 749. According to the ld. Counsel for the assessee, this decision contemplates that there is no personal element of expenditure involved in a case of a Company.
The ld. D.R., on the other hand, relied upon the orders of revenue authorities.
On due consideration of the facts and circumstances, we are of the view that ld. Assessing Officer has nowhere pointed out the defects in the bills and vouchers. His findings are general in nature without pointing out any specific default at the end of the assessee and, therefore, in this adhoc manner, disallowance ought to have not been done. We allow this fold of grievance and delete the disallowance of Rs.7,67,800/-.
As far as the second fold of grievance is concerned, ld. Counsel for the assessee took us through page no. 26 of the paper book. He submitted that this is the copy of the return filed by the assessee and under Schedule CFL, it has shown carry forward of losses. This aspect has not been gone into by the authorities below.
ITA No. 938/KOL/2024 (A.Y. 2014-2015) Uniworth Limited 9. With the assistance of ld. Representatives, we have gone through the record carefully. It emerges out that the assessee has claimed brought forward of losses on year-to-year basis. The ld. Assessing Officer ought to have considered this aspect whether brought forward of losses is available to the assessee or not and if available, then, set off should have been granted. Therefore, we remit this issue to the file of ld. Assessing Officer with a direction that ld. Assessing Officer shall determine the issue whether assessee has brought forward losses of earlier year or not. If such losses are available, then set off be granted.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 09/09/2024.
Sd/- Sd/- (Sanjay Awasthi) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 9th day of September, 2024
Copies to :(1) Uniworth Limited, 11A, Sarojini Naidu Sarani, 4th Floor, Shakespeare Sarani, Kolkata-700017 (2) Deputy Commissioner of Income Tax, Circle-11(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (3) Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi;
ITA No. 938/KOL/2024 (A.Y. 2014-2015) Uniworth Limited (4) CIT - , Kolkata; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.