Smt. Asha Agarwal, Ghaziabad V. ITO, Ghaziabad

ITA 1038/DEL/2014

• Counselvise Citation: 103820114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 28-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 21-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA
• Assessee Lawyers: SANJEEV AGRAWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.1038/DEL/2014 ASSESSMENT YEAR : 2008-09 ASHA AGARWAL, 87, 1 ST FLOOR, NAI BASTI, GHAZIABAD. PAN : ABQPA7195M VS. ITO, WARD-1(1), GHAZIABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJEEV AGRAWAL, CA RESPONDENT BY: SHRI OM PRAKASH MEENA, SR.DR ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 22.10.2013 IN RELATION TO ASSESSMENT YEAR 2008-09. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAIN ST THE CONFIRMATION OF AD HOC ADDITION OF RS.1,50,000/- OUT OF EXPENSES INCUR RED BY THE ASSESSEE IN CASH AMOUNTING TO RS.2,10,834/-. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF WHOLESALE TRADING OF MEDICINES. DU RING THE YEAR, THE ITA NO.1038/DEL/2014 2 ASSESSEE ALSO TOOK C&F AGENCY. ON PERUSAL OF THE B OOKS OF ACCOUNT, IT WAS OBSERVED THAT THE ASSESSEE HAD DECLARED GP RATE OF 5.91% WHICH WAS BETTER THAN 5.9% OF THE PRECEDING YEAR. THE AO OBSERVED T HAT THE ASSESSEE HAD INCURRED EXPENSES IN CASH SUCH AS FREIGHT AND CARTA GE INWARD, CARTAGE OUTWARD, REPAIR AND MAINTENANCE, SALARY OF STAFF, S TAFF WELFARE, ETC., IN RESPECT OF WHICH PROPER SUPPORTING BILLS WERE NOT A VAILABLE. CONSIDERING THIS FACT, THE AO MADE AN AD HOC ADDITION OF RS.1,50,000/- WHICH CAME TO BE CONFIRMED IN THE FIRST APPEAL DESPITE THE ASSESS EES CATEGORICAL SUBMISSION THAT A SUM OF RS.1,80,000/- WAS PAID TOW ARDS SALARIES TO EMPLOYEES WHICH EXPENDITURE WAS PART OF TOTAL EXPEN SES OF RS.2.10 LAC. THE ASSESSEE IS AGGRIEVED AGAINST THIS ADDITION. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IT IS SEEN THAT THE ASSESSEE INCURRED EX PENSES IN CASH AMOUNTING TO RS.2.10 LAC OUT OF WHICH SALARY WAS PAID FOR RS. 1,80,000/- TO STAFF WHICH FACT IS NOT DISPUTED. IT IS FURTHER OBSERVED THAT T HE GP RATE OF THE ASSESSEE AT 5.91% IS SLIGHTLY BETTER THAN THE GP RATE OF 5.9% O F THE PRECEDING YEAR. IN SUCH CIRCUMSTANCES, AD HOC DISALLOWANCE OF RS.1.80 LAC OUT OF TOTAL EXPENSES OF RS.2.10 LAC IS NOT REASONABLE. CONSIDER ING THE ENTIRETY OF THE ITA NO.1038/DEL/2014 3 FACTS AND CIRCUMSTANCES PREVAILING IN THIS CASE, I AM OF THE CONSIDERED OPINION THAT THE ENDS OF JUSTICE WOULD MEET ADEQUAT ELY IF THE ADDITION ON ACCOUNT OF UNVOUCHED CASH EXPENSES IS SUSTAINED AT RS.20,000/-. I ORDER ACCORDINGLY. 5. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS PARTLY ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 8 TH JULY, 2015. SD/- (R.S. SYAL) ACCOUNTANT MEMBER DATED: 28 TH JULY, 2015. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI