SHRI NEELESH H. AGRAWAL,,AHMEDABAD vs. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-12,, AHMEDABAD

It emerges out from the record that the assessee has paid interest to ABN Amro, Bajaj Capital and Reliance Capital, totaling to Rs.3,40,746/-. He failed to deduct TDS and therefore, with the help of Section 40(a)(ia), the ld. Assessing Officer has disallowed the expenditure. On appeal, ld. CIT(A) has confirmed the disallowance.

Before me, learned Counsel for the assessee, on the strength of the Hon’ble Gujarat High Court’s decision in Tax Appeal No.626 of 2017 in the case of Principal Commissioner of Income-tax Vs. ASE Capital Markets Ltd,

On due consideration of the above, I am of the view that now it has been settled that if the recipients have accounted the receipts, which have been disallowed in the hands of the payer on account of non-deduction of tax, and the same has been included in their taxable income, then no disallowance is to be made in the hands of the payer. Considering this aspect, I set aside this issue to the file of the Assessing Officer for verification. The assessee shall provide the complete details of recipients and the ld. Assessing Officer shall call for information from the recipients, i.e. ABN Amro, Bajaj Capital and Reliance Capital as to whether they have included this amount in their taxable income or not. If the receipts are accounted in their taxable income, then no disallowance is to be made in the hands of the assessee. This ground of appeal is allowed for statistical purposes.

In the next ground of appeal, the grievance of the assessee is that the ld. CIT(A) has erred in confirming the addition of Rs.1,23,300/- out of travelling expenses.

The brief facts of the case are that the assessee has debited a sum of Rs.1,23,300/- to the P&L account towards travelling expenses. The ld. Assessing Officer made an inquiry and recorded a finding that this expenditure was incurred by the assessee for his honeymoon; therefore, ld.

Appeal to the CIT(A) did not bring any relief to the assessee.

With the assistance of the learned representatives, I have gone through the record carefully. The assessee has submitted that he took a honeymoon package from PCFL Travel House. According to the assessee, it was only for the namesake “Honeymoon Package”, but he did not go for honeymoon, because his marriage was taken place long back. However, after considering the record, I find that the assessee failed to bring any evidence on record demonstrating that the expenditure was incurred wholly and exclusively for the purpose of business. Learned CIT(A) has rightly confirmed the disallowance. I do not find any error in the order of the ld. CIT(A) and accordingly, this ground of appeal is rejected.

In the next ground of appeal, the grievance of the assessee is that the ld. CIT(A) has erred in confirming the addition of Rs.1,80,000/- which was added by the Assessing Officer on account of low household withdrawal shown by the assessee.

The brief facts of the case are that the assessee has shown household withdrawal of Rs.5,000/- per month only. His father has shown Rs.15,000/ per month. The ld. Assessing Officer has estimated the household withdrawal at Rs.20,000/- per month and made an addition of Rs.1,80,000/-.

Appeal to the CIT(A) did not bring any relief to the assessee.

On due consideration of the facts and circumstances, I do not find any error in the order of the ld. CIT(A). A person who can afford a foreign trip for honeymoon, it is highly improbable that his household expenditure

Ground Nos. 4 and 5 are interconnected with each other; therefore, I take both the grounds together. In ground no.4, the assessee has pleaded that ld. CIT(A) has erred in confirming the addition of Rs.3,12,049/-, which was made by the Assessing Officer u/s 37 of the Act; and, in ground no.5, the assessee is challenging the disallowance of Rs.6,00,000/-, which was made by the Assessing Officer on account of discrepancy in the books of accounts.

The brief facts of the case are that the assessee has made payments towards credit card purchases. He has paid a sum of Rs.1,91,800/- to Citi Bank and Rs.1,20,249/- to Standard Chartered Bank. According to the assessee, these expenditures were incurred for the purpose of business. He contended that he has to employ a salesman for day-to-day business, and, in order to reimburse the petrol expenses to his staff, these two credit cards were used. The ld. Assessing Officer has observed that the assessee failed to submit any vouchers, bills, statement of the credit card for showing the nature of expenditure and how they have nexus with the business of the assessee. Thus he disallowed the claim of the assessee. Similarly, the ld. Assessing Officer has disallowed half percentage of the total turnover towards different expenditures and leakage.

With the assistance of the learned representatives, I have gone through the record carefully. The assessee is a distributor of Videocon and Hutch. The Assessing Officer has called for the purchase/sales register, bills and vouchers for verification. He found that complete details were not SMC-ITA No. 1436/Ahd /2016 For AY: 2011-12 5

In the result, appeal of the assessee is partly allowed. Order pronounced in the Court on 4th December 2017 at Ahmedabad. (RAJPAL YADAV) JUDICIAL MEMBER Ahmedabad; Dated 04/12/2017 Biju T., Sr.PS

""यथ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned CIT आयकर आयु"(अपील) / The CIT(A) 4. 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड" फाईल / Guard file. देशानुसार/BY ORDER, आदेशानुसार देशानुसार देशानुसारपंजीकार (Dy./Asstt.