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Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK
Before: S/SHRI N.S SAINI & PAVAN KUMAR GADALE
IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK
BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER
ITA No. 164/CTK/2015 Assessment Year : 2010-2011
ACIT, Circle 1(1), Cuttack Vs. M/s. Dushasan Jena, At: Talasahi, Jobra, Cuttack
PAN/GIR No. AAAFD 9502 C (Appellant) .. ( Respondent)
ITA No. 182/CTK/2015 Assessment Year : 2010-2011
M/s. Dushasan Jena, At: Vs. ACIT, Circle 1(1), Cuttack Talasahi, Jobra, Cuttack
PAN/GIR No. AAAFD 9502 C (Appellant) .. ( Respondent)
Assessee by : None Revenue by : Shri D.K.Pradhan, DR
Date of Hearing : 03/07/ 2017 Date of Pronouncement : 03 /07/ 2017
O R D E R Per N.S.Saini, AM These are cross appeals filed by the Revenue and the Assessee
against the order of CIT(A)-Cuttack, dated 29.1.2015, for the assessment
year 2010-2011.
Notice of hearing sent to the assessee by Speed Post has not been
returned back unserved. However, when the case was called for hearing,
none appeared on behalf of the assessee nor any application was filed for
2 ITA No. 164/CT K/ 2015 ITA No. 182/CT K/ 2015 Asse ssment Year : 20 10- 201 1 adjournment. Therefore, we proceed to decide the cross appeals after
hearing ld D.R. and on the basis of materials available on record.
In Revenue’s appeal, the grievance of the revenue is that the
CIT(A) was not justified in restricting the disallowance of expenses
claimed under the heads, i) transportation & hire charges, (ii) Oil &
lubricants (iii) loading charges and (iv) shifting charges to Rs.5,00,000/-
as against Rs.42,12,029/- disallowed by the Assessing Officer.
The assessee is in appeal against the sustenance of disallowance of
Rs.5,00,000/- out of total disallowance of Rs.42,12,029/-.
Brief facts of the case are that the Assessing Officer during the
course of assessment proceedings found that the assessee is a transport
contractor and that has claimed expenditure on the bills and vouchers of
another firm namely M/s. Baba Lingaraj Enterprises, Bhubaneswar. The
expenditures as found to have been claimed were for i) transportation &
hire charges, (ii) Oil & lubricants (iii) loading charges and (iv) shifting
charges. The Assessing Officer then considering the bills and vouchers
which were not related to the assessee firm disallowed 35% of the
expenditures claimed by the assessee under the above heads and made
an addition of Rs.42,12,029/- to the income of the assessee.
On appeal, the CIT(A) restricted the disallowance to Rs.5,00,000/-
on the ground that the net profit shown by the assessee was more than
12% of the gross turnover.
3 ITA No. 164/CT K/ 2015 ITA No. 182/CT K/ 2015 Asse ssment Year : 20 10- 201 1 7. Ld D.R. relied on the order of the Assessing Officer and submitted
that the CIT(A) was not justified in restricting the disallowance of
expenditure of Rs.5,00,000/- and, therefore, the order of the CIT(A)
should be reversed and that of the Assessing Officer should be restored.
After hearing ld D.R. and perusing the materials on record, we find
that the Assessing Officer on examining the bills and vouchers for
expenses claimed under the heads i) transportation & hire charges, (ii)
Oil & lubricants (iii) loading charges and (iv) shifting charges found that
some of the vouchers were related to sister concern of the assessee i.e.
M/s. Baba Lingaraj Enterprises. Hence, he disallowed 35% of the
expenses out of the total expenses clamed under the above heads
amounting to Rs.1,20,34,377/-.
On appeal, the CIT(A) restricted the disallowance to Rs.5,00,000/-.
We find that while making the disallowance, the Assessing Officer
has not pointed out which of the specific bills and vouchers related to the
expenses of sister concern M/s. Baba Lingaraj Enterprises. In our
considered view, the disallowance should have been made by the
Assessing Officer only of those bills and vouchers which pertain to sister
concern M/s. Baba Lingaraj Enterprises and not on an estimated basis of
35% out of total expenses claimed by the assessee under the above four
heads of expenditures. We find that the CIT(A) has restricted the
disallowance of expenses to Rs.5 lakhs. Ld D.R. could not bring any
material on record to show that any amount more than Rs.5 lakhs was
4 ITA No. 164/CT K/ 2015 ITA No. 182/CT K/ 2015 Asse ssment Year : 20 10- 201 1 incurred by the assessee for expenses of the sister concern M/s. Baba
Lingaraj Enterprises. Similarly, the assessee has also not brought any
material on record to show that the disallowance sustained at Rs.5 lakhs
out of the total expenses by the CIT(A) was on higher side. Hence, we
find no good reason to interfere with the order of the CIT(A), which is
hereby confirmed and grounds of appeal of the revenue and assessee are
dismissed.
In the result, the appeal filed by the Revenue and the assessee are
dismissed.
Order pronounced in the open court on03 /07/2017 in the presence of parties.
Sd/- sd/- (Pavan Kumar Gadale) (N.S Saini) JUDICIALMEMBER ACCOUNTANT MEMBER Cuttack; Dated 03 /07/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant/Revenue : ACIT, Circle 191), Cuttack 2. The Respondent/Assessee: M/s. Dushasan Jena, At: Talasahi, Jobra, Cuttack 3. The CIT(A) Cuttack 4. Pr.CIT, Cuttack 5. DR, ITAT, Cuttack 6. Guard file. BY ORDER, //True Copy//
SR.PRIVATE SECRETARY ITAT, Cuttack