GUNATIT REALTY,VADODARA vs. THE ACIT, CIRCLE-3(1) PRESENT JURISDICTION CIRCLE-2(1)(1), VADODARA

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ITA 239/AHD/2024Status: DisposedITAT Ahmedabad07 October 2024AY 2017-18Bench: DR. BRR KUMAR (Accountant Member)2 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the AO's sole reason for disallowance was that expenses were made in cash, without any other supporting evidence. The statement recorded only confirmed cash payments, not their invalidity.

What were the facts?

The Assessing Officer (AO) made an ad-hoc disallowance of 20% of labour and site expenses, citing unreliability of vouchers and cash payments. The assessee's books of accounts were duly audited and accepted by the Revenue.

What were the issues?

Whether ad-hoc disallowance of expenses is justified solely on the basis of cash payments without further evidence of invalidity.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

For Appellant: Shri M.J. Shah, Advocate and Shri Rushin Patel, CA
Hearing: 07/10/2024Pronounced: 07/10/2024

Asstt.Year : 2017-18 Gunatit Reality ACIT Circle 3(1) FF/8, Narsinghdham Complex Vs Vadodara. Opp: Sangam Bus Stop, Harni Road Vadodara 390 022 PAN : AANFG 8015 A (Applicant) (Responent) Assessee by : Shri M.J. Shah, Advocate and Shri Rushin Patel, CA Revenue by : Shri Ravindra, Sr.DR सुनवाई क� तारीख/Date of Hearing : 07/10/2024 घोषणा क� तारीख /Date of Pronouncement: 07/10/2024 आदेश आदेश/O R D E R आदेश आदेश This is assessee’s appeal against the order of the ld.Commissioiner of Income Tax (Appeal)-12, Mumbai dated 13.12.2023 for the Asst.Year 2017-18 passed under section 250 of the Income Tax Act, 1961 (“the Act” for short).

2.

Adjournment sought by the ld.counsel for the assessee has been rejected. The ld.DR relied on the order of the ld.CIT(A).

3.

The records placed before me have been perused. The assessee has filed return of income declaring loss of (-)Rs.40,74,157/-. Disallowance of 20% of the expenses on account of labour and site expenses incurred by the assessee have been made by the AO on adhoc basis. The AO held that the vouchers submitted by the assessee was not reliable and defied logic.

4.

On going through the record before me, it is clear that the reasons for disallowing of the expenses was that the expenses were made on cash. The books of accounts have been duly audited and accepted by the Revenue. The statement of Shri Rahul Parikh recorded by the AO only proved that the expenses made in cash, and nothing beyond. No other reason given by the AO to disallow the expenses on adhoc basis. Keeping in view, the facts on record, the appeal of the assessee is hereby allowed.

Dictated on the Open Court, typed and pronounced on 7th October, 2024.

Copy of this order be given to the assessee. The Registry is directed to dispatch as per procedure.

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