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Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI
Before: SHRI R.C.SHARMA
This is an appeal filed by the assessee against the order of CIT(A), Mumbai, dated 31-3-2015, for the assessment year 2011-2012. 2. In this appeal the assessee is aggrieved for disallowance of Rs.2,01,161/- out of unsupported cash expenses.
Rival contentions have been heard and record perused. Facts in brief are that the assessee is in the business of transportation deriving income mainly from brokerage, shifting income and forklift hire charges. During the year, the assessee has shown gross receipts of Rs.10.30 crores on which net profit of Rs.56.24 lakhs is declared, the ratio of which works out to 5.46%. The assessee has also earned dividend income and claimed the same as exempt.
During the course of assessment the AO disallowed 25% of unsupported cash expenses which works out to be Rs.5,00,401/-. By the impugned order the CIT(A) restricted the disallowance to 10% of such expenses.
As per ld. AR as per nature of assessee’s business, similar expenses were required to be incurred in cash and there is no provision in Income Tax Act which prohibits even if similar payment to be made by cheques.
I have considered rival contentions and found that disallowance has been made by the AO by observing that in respect of some of the expenses third party evidence were not available. By the impugned order CIT(A) restricted the disallowance to 10%. Considering the nature of business vis-à-vis smallness of expenses incurred and keeping in view the totality of facts and circumstances of the case, I restrict the disallowance to the extent of 5%. I direct accordingly.
In the result, appeal of the assessee is allowed in part. Order pronounced in the open court on this 27/07/ 2016. (R.C.SHARMA) ऱेखा सदस्य / ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक Dated 27/07/2016 प्र.कु.मभ/pkm, नन.स/ PS आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A), Mumbai. 3. आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 5. आदेशाि सार/ BY ORDER, गार्ा पाईर / Guard file. 6. सत्मावऩत प्रनत //// उप/सहायक पुंजीकार (Asstt.