KALINGA JUTE PRODUCTS PVT. LTD.,DHENKANAL vs. ITO, WARD-1(3), BHUBANESWAR

This is an appeal filed by the assessee against the order of CIT(A)-1,

Bhubaneswar, dated 4.7.2016, for the assessment year 2012-13.

CIT(A) is wholly unjustified to confirm the disallowance of 10% of expenses

under seven different heads.

authorities and materials available on record. In the instant case, the

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Assessing Officer observed that during the year under consideration, the

assessee company has debited an amount of Rs.90,111/- under the head

“general expenses” in the profit and loss account under the major head

“administrative expenses”. The assessee could not produce bills and

vouchers and also could not furnish details of the expenses. He observed that

some of the expenses are not properly vouched and some of the vouchers are

self-made, for which, there was no satisfactory explanation by the assessee.

Therefore, the Assessing Officer disallowed 10% out of total expenses of

Rs.90,911/- and added Rs.9091/- to the income of the assessee.

observing that no material evidence was filed before him in support of the

contention that the entire amount of expenses claimed as general expenses

under the major head “administrate expenses” should have been allowed in

full as the entire amount of expenses were properly vouched and verifiable,

duly supported by bills and vouchers and incurred wholly and exclusively for

the purpose of business only and not for any other purposes.

out of general expenses is excessive.

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Rs.90,911/- has been made by the Assessing Officer @ 10% on the ground

that supporting bills and vouchers were not produced by the assessee. Before

me, though ld A.R. of the assessee reiterated the submissions made before

the Assessing Officer and ld CIT(A) but has not denied that in some of the

cases, bills and vouchers are not available for the expenses claimed under the

head “general expenses” of Rs.90,911/-. I find that it would meet the ends

of justice if the disallowance is sustained at 5% out of the total expenses

claimed by the assessee. I, therefore, modify the order of ld CIT(A) and

restrict the disallowance to 5% out of total expenses claimed by the assessee

and the assessee gets relief of Rs.4545/-. Thus, this ground of apepal is partly

allowed.

ld CIT(A) was wholly unjustified to confirm partial disallowance of Rs.26,872/-

on adhoc basis being 1% of total expenses of Rs.26,87,126/- claimed under

the head “packing material expenses”.

authorities and materials available on record. In the instant case, the

Assessing Officer observed that in the profit and loss account, the assessee

has debited Rs.26,87,126/- under the head “packing material expenses”.

During the course of assessment proceedings, ld A.R. of the assessee was

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asked to produce the ledger copies and bills/vouchers in support of the

expenses. Ld A.R. of the assessee could not produce the bills and vouchers

nor could he furnish details for such expenses. Therefore, the Assessing

Officer made an estimated disallowance of 2% out of the total expenses of

Rs.26,87,126/- and added Rs.53,743/- to the income of the assessee.

expenses of Rs.26,87,126/- claimed by the assessee.

expenses under the head “packing materials” claimed by the assessee is

excessive.

of lower authorities that some of the bills are not produced by the assessee

for verification. However, I also find that there is no mention in the orders of

lower authorities that which of the bills and vouchers are not produced.

Hence, to meet the ends of justice, I set aside the order of ld CIT(A) and

restrict the disallowance under the head “packing expenses” to 0.5% of the

total expenses of Rs.26,87,126/- claimed by the assessee. The order of ld

CIT(A) is modified accordingly. Thus, this ground of appeal is partly allowed.

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ASST.REGISTRAR, ITAT, Cuttack