M/S SMPL MAHACOL JV,KOLKATA vs. I.T.O WD - 36(2),KOLKATA, KOLKATA

The assessee in the present case is a partnership firm, which filed its return of income for the year under consideration on 31.10.2006 declaring total income of Rs.6,04,790/-. During the course of assessment proceedings, it was noticed by the Assessing Officer that the expenses claimed by the assessee under the head “staff welfare”, “workshop” and “miscellaneous” amounting to Rs.4,52,466/-, Rs.2,64,055/- and Rs.1,96,629/- respectively were supported by only self-made vouchers ./2013 Assessment year: 2006-2007 Page 2 of 3 without any bills or other evidence. He, therefore, held that the expenses claimed by the assessee under these three heads were not fully verifiable and accordingly a disallowance of Rs.91,315/- being 10% of the total expenses claimed by the assessee under the said three heads was made by him. On appeal, the ld. CIT(Appeals) confirmed the said disallowance made by the Assessing Officer observing that the same was fair and reasonable in the facts and circumstances of the case. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.

We have heard the arguments of both the sides and also perused the relevant material available on record. Although the ld. counsel for the assessee has made an attempt to contend that all the expenses claimed by the assessee under the relevant three heads involved petty amounts spent at different sites for which no supporting documents except self-made vouchers were available, a perusal of the details of the said expenses as furnished on record shows that some major amounts were also claimed by the assessee under the relevant heads. For example, staff welfare expenses claimed by the assessee involved sums of Rs.13,334/-, Rs.10,250/- and Rs.13,475/- spent on 29.12.2005, 05.02.2006 and 09.02.2006 respectively, besides the various other amounts involving payments in the range of Rs.2,000/- to Rs.8,000/-. The amounts in the similar range were also claimed by the assessee under the heads ‘miscellaneous’ expenses and ‘workshop’ expenses. It, therefore, cannot be said that only the petty amounts were claimed by the assessee under the relevant heads for which no third party documentary evidence in the form of bills, etc. could be made available as sought to be contended by the ld. counsel for the assessee. Having regard to all these facts of the case, we are of the view that the disallowance of 10% made by the Assessing Officer on account of unverifiable element involved in the expenses claimed by the assessee under the head ‘staff welfare’, ‘workshop’ and ‘miscellaneous’ was quite fair and reasonable and the ld. ./2013 Assessment year: 2006-2007 Page 3 of 3 CIT(Appeals) is fully justified in confirming the same. We, therefore, uphold the impugned order of the ld CIT(Appeals) on this issue and dismiss this appeal filed by the assessee.

In the result, the appeal of the assessee is dismissed.