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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: HON’BLE SHRI SANDEEP GOSAIN, JM &
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: HON’BLE SHRI SANDEEP GOSAIN, JM & HON’BLE SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 524/JP/2023 fu/kZkj.k o"kZ@Assessment Year : 2016-17. cuke Ashok Parnami, The ACIT, Vs. 314, Adarsh Nagar, Circle-5, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. ABPPP 0203 Q vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : None jktLo dh vksj ls@ Revenue by : Shri Anup Singh (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 17/10/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 30/10/2023 vkns'k@ ORDER PER: SANDEEP GOSAIN, J.M.
This appeal by the assessee is directed against the order dated 14.06.2023 of ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi passed under section 250 of the IT Act, 1961 for the assessment year 2016-17. The assessee has raised the following grounds :-
1. CIT (A) has erred in facts and law on upholding the addition made by ld. AO on account of disallowance of Electricity and Water, housekeeping and security expenses amounting to Rs. 3,95,882/- i.e. 5% of total expenses on arbitrary basis.
2. CIT (A) has erred in facts and law on upholding the adhoc addition made by ld. AO on account of sundry creditors amounting to Rs. 10,00,000/- on presumption basis.
3. Consequential levy of interest u/s 234A, 234B and 234D is bad in law.
4. Consequential initiation of penalty proceedings u/s 271(1)(c) of Income Tax Act, 1961 is bad in law.
The appellant craves to add/alter grounds of appeal before or at the time of hearing.
The assessee filed the return declaring total income of Rs. 6,08,60,400/- on 16.02.2017 which was processed under section 143(1) of the IT Act, 1961.
Subsequently, the case was selected for complete scrutiny under CASS and accordingly statutory notice under section 143(2) of the Act was issued on 18.09.2017 which was duly served on the assessee through ITBA portal. Notice under section 142(1) along with questionnaire dated 18.10.2018 was issued to the assessee electronically for filing the reply on or before 25.10.2018. In response, the assessee submitted reply on 25.10.2018, 11.11.2018, 02.12.2018, 09.12.2018, 10.12.2018 and 14.12.2018 on ITBA portal which were examined and placed on file.
The assessee is C & F Agent of various companies and also carrying on business in the names M/s. Adarsh Marketing, Jaipur and M/s. Adarsh Marketing, Ballabhgarh.
Besides, he had also carried out transport business in the name of M/s. Adarsh Transport Company and shown income from Salary, House property and other sources.
2.1 On examination of the details filed by the assessee during the assessment proceedings, the AO noted that business of the two proprietorship concerns of the assessee namely, M/s. Adarsh Marketing and M/s. Adarsh Transport Company is run from the residential premises of the assessee at 314, Adarsh Nagar, Jaipur-302004.
It was also revealed that some of the common expenses on account of Electricity and Water expenses, Repair and maintenance, House keeping, Internet and Broadband charges, News paper expenses and Security charges are claimed by both the above mentioned concerns in the Profit & Loss account for the year under consideration, whereas the business was run from same premises i.e. 314 Adarsh Nagar, Jaipur occupied by the assessee along with his family. The details of common expenses claimed by M/s. Adarsh Marketing and M/s. Adarsh Transport Company are as under:-
M/s. Adarsh Marketing M/s. Adarsh Transport Co. Total :
Electricity & Water Charges 64,41,881/- 4,620/- 64,46,501/-
2. Housekeeping 13,39,803/- 1,31,332/- 14,71,135/- --------------- Total : 79,17,636/- The assessee was asked to explain as to why the common expenses claimed on account of electricity, water, housekeeping and security maintenance claimed in business concerns M/s. Adarsh Marketing and M/s. Adarsh Transport Co. at 314 Adarsh Nagar, Jaipur should not be disallowed as these expenses are common and being incurred from the same premises. In response, the assessee submitted his explanation vide his letter dated 14.12.2018. The reply of the assessee has been considered but could not found it acceptable completely. Accordingly the AO considering the facts and in order to meet out the possible leakage of the revenue, disallowed 10% of the expenses on account of Electricity & Water expenses and Housekeeping of Rs. 79,17,636/- which comes to Rs. 7,91,763/-.
2.2 In respect of sundry creditors of Rs. 17,98,75,980/-, the assessee was asked vide notice under section 142(1) dated 18.10.2018 to furnish the complete details of sundry creditors. In compliance the assessee furnished list of sundry creditors vide letter dated 11.11.2018. On examining the list furnished by the assessee, the AO found it not acceptable as the list was incomplete without giving complete address, PAN and confirmation from the related sundry creditors. Again show cause notices were issued to the assessee on 11.12.2018 and 20.12.2018. In response the assessee explained that it is not possible for him to furnish the confirmation in this short time span. The AO accordingly considering the list furnished by the assessee as incorrect, made the addition of Rs. 10,00,000/- on account of sundry creditors.
The AO completed the assessment vide his order dated 24.12.2018 at a total income of Rs. 6,26,52,163/- by making disallowance / addition of Rs. 7,91,763/- and Rs. 10,00,000/- on account of Electricity & Water expenses and Housekeeping expenses and on account of unexplained sundry creditors respectively. Aggrieved by the order, the assessee preferred appeal before the ld. CIT (A). Before the ld. CIT (A) also no one attended in response to notices sent and served on the assessee. Thus, the ld. CIT (Appeals) decided the appeal of the assessee ex-parte after considering the material available on record.
Now the assessee is in appeal before us.
Before us, none appeared on behalf of the assessee when the case was called for hearing. We have heard the ld. D/R, perused the material on record and gone through the orders of the lower authorities. At the outset, on perusal of the records, we find that at the appellate proceedings, the ld. CIT (A) issued various notices under section 250 on 07.01.2021, 11.05.2023 and 29.05.2023 asking the assessee to file the submission on or before 22.01.2021, 18.05.2023 and 13.06.2023 respectively. In compliance, the assessee has not responded except seeking adjournment vide submission dated 22.01.2021 which was granted. Since the assessee has not responded to various notices issued by the ld. CIT (A), he disposed off the appeal of the assessee ex-parte, being an old appeal, on the basis of material available on record and thereby partly allowed the appeal of the assessee, by observing in para 5.3 and 6 as under :-
“5.3 From a perusal of the assessment order, I find that no instance of inflation of expenses has been pointed out by the AO. During assessment proceedings, the assessee has not denied personal element in the electricity and water expenses. Also, the AO has not been able to show any instance where the contention of the assessee that housekeeping and security expenses have been incurred with respect to various warehouses, godowns and offices of the assessee, is incorrect. Looking to the facts of the case that the two proprietorship concerns of the assessee is a C&F agent of various companies and has various warehouses, godowns and offices at various locations, the disallowance the made by the AO @ 10% of expenses of electricity and water and housekeeping and security is directed to be restricted to 5% of the total expenses and the balance 5% is directed to be deleted. Grounds 1 & 2 are partly allowed.”
“ 6. Grounds No.3 & 4 relate to disallowance of Rs. 10,00,000/- out of unexplained new sundry creditors of Rs.6,41,87,349/- added during the year. The AO gave the assessee several opportunities to furnish confirmations, names, addresses, PAN numbers of new sundry creditors added during the year exceeding Rs.1,00,000/- but the assessee merely submitted a list of sundry creditors without addresss, PAN numbers or confirmation on the ground that the said number of sundry creditors is very large. During appeal proceedings also, it is seen that the appellant has not submitted basic details about the sundry creditors in nature of addresses, PAN or any confirmation. In view of the above, the addition made by the AO of Rs.10,00,000/- on account of unexplained new sundry creditors is upheld. Grounds No. 3 & 4 are dismissed.”
On careful consideration of the facts and in the circumstances of the case and the fact that before us also neither anybody appeared on behalf of the assessee nor filed details/submission, we find no infirmity in the order of the ld. CIT (A), which we upheld. 4. In the result, this appeal of the assessee is dismissed.
Order pronounced in the open court on 30/10/2023.
Sd/- Sd/- ¼lanhi xkslkbZ½ ¼ jkBkSM+ deys'k t;arHkkbZ ½ (RATHOD KAMLESH JAYANTBHAI) (SANDEEP GOSAIN) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 30/10/2023. Das/ आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Ashok Parnami, Jaipur. 2. izR;FkhZ@ The Respondent- The ACIT, Circle-5, Jaipur. 3. vk;dj vk;qDr@ CIT