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Income Tax Appellate Tribunal, KOLKATA BENCH “C” KOLKATA
Before: Shri Mahavir Singh & Shri Waseem Ahmed
आदेश /O R D E R
PER Waseem Ahmed, Accountant Member:-
This appeal by the assessee is arising out of order of Commissioner of Income Tax (Appeals)-VIII, Kolkata in appeal No.266/CIT(A)-VIII/Kol/11-12 dated 25.02.2013. Assessment was framed by ACIT,Range-9, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 20.12.2011 for assessment year 2009-10 and assessee has raised following grounds:- “1. On the facts and circumstances of the case, the scrutiny assessment order was not complied with provision of IT Act and guideline of scrutiny Arvind Kr. Nand Kr. Ltd. v. DCIT, Cir-9 Kol. Page 2 assessment in respect of disallowance of expenditure Rs.3,00Lac to this extent is bad in law.
2. On the facts and in the circumstances of the case the Ld. C.I.T (Appeal) wrongly confirmed alleging the disallowance made on an agreed lump sum amount of Rs. 3.00 Lacs to assess taxable income u/s 143(3) of IT Act in spite of no consent was furnished by the appellant to agree for lump sum disallowance amount of Rs.3,.00 Lac knowingly attraction of penalties & prosecution which is excessive, unjustified, unwarranted. Our authorized representative agreed in pursuance of query by ld assessing officer for certain defective bill and some expenses supported by self made voucher in the scrutiny may be found. This consent can never be considered authorization of lump sum disallowance Rs.3.00 Lac but disallowance should be determined on merits.”
2. It was observed at the time of hearing that ground No.1 and 2 are common therefore they are clubbed together to pass a consolidated order for the sake of convenience.
The common issues raised by assessee are that Ld. CIT(A) erred in confirming the order of Assessing Officer for disallowing the expenses for an amount of Rs.3 lacs on account of self-made voucher and defective bills.
The facts of the case are that the assessee in the present case is a private limited company and running a husking mill. It buys paddy, processes it into rice and sale it into the market. It is also engaged into direct trading of rice. During the financial year 2008-09 the assessee has also started a new venture of manufacturing and supply of electric pole. During the assessment proceedings assessee was asked by A.O. to furnish the details of various bills for the expenses claimed by it. Assessee furnished the same but on verification of the same it was revealed that the some of the bills were defective and some of the expenses were incurred with self made vouchers. Hence the A.O. disallowed the expenses to the tune of Rs. 3.00 lacs with the consent of Arvind Kr. Nand Kr. Ltd. v. DCIT, Cir-9 Kol. Page 3 the representative of the assessee vide order sheet noting dated 13.12.2011. Hence this amount of Rs. 3.00 lacs was added back to the income of the assessee on account of defective or insufficient supporting vouchers.
Aggrieved, assessee preferred an appeal before Ld. CIT(A) and objected to the stern action of the A.O. for disallowing the sum of Rs. 3.00 lacs on account of defective and insufficient supporting vouchers. However the CIT (A) out rightly rejected the plea of the assessee and upheld the order of the AO by observing as under: “Considering the entire facts of the case, this sub- ground 1 (ii) of the appeal regarding disallowance on account of the defective bills of Rs. 3,00,000/- is confirmed as because this disallowance is an agreed disallowance and no appeal should have been filed by the appellant on this issue. Thus, this ground of appeal is dismissed.”
Being aggrieved by this order of CIT (Appeal) assessee came in second appeal before us.
We have heard the contentions of the rival parties and perused the material available on record. Before us the ld. AR submitted that all the bills were duly submitted before the AO at the time of assessment. The AR further submitted that the assessee never agreed for the addition made by the AO. On the other hand the ld. DR relied on the order of authorities below. From the aforesaid discussion we find that the AO has made the addition because the assessee failed to submit the bill in support of the expenses claimed by the assessee. On the specific query from the bench to the AR regarding the production of the bill which was disallowed by the AO, the assessee failed to produce the same. In view of above we find no substance in the case of the assessee and the ld. AR also failed to produce the bill which was the subject matter of the Arvind Kr. Nand Kr. Ltd. v. DCIT, Cir-9 Kol. Page 4 disallowance. Therefore we are inclined not to interfere in the order of the authorities below.