SREE AKSHAYAM , CHENNAI V. ITO , NON CORP. WARD 7 (5), CHENNAI

ITA 1064/CHNY/2022

AI Insights

The case involves M/s. Shree Akshyam, a hotel business, which appealed against the order of the Commissioner of Income Tax (Appeals) 18, Chennai, concerning the assessment year 2017-18. The primary contention was the confirmation of a disallowance of \\u20b9.5,35,500 by the CIT(A), which was initially disallowed by the Assessing Officer due to the absence of proper bills/vouchers. The Tribunal noted that all transactions were conducted through banking channels and acknowledged the nature of transactions in the hotel business, where not all purchases could be substantiated with 'puccka' bills/vouchers. The Tribunal decided to remit the matter back to the CIT(A) for a fresh decision, emphasizing the need to consider the commercial expediency and the specific nature of transactions in the hotel industry.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134968 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 22-01-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 07-12-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 143(3); 143(2)

Judgement Text

आयकर अपीलीय अिधकरण, ‘बी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ŵी वी. दुगाŊ राव, Ɋाियक सद˟ एवं ŵी मनोज कु मार अŤवाल, लेखा सद˟ के समƗ । Before Shri V. Durga Rao, Judicial Member & Shri Manoj Kumar Aggarwal, Accountant Member आयकर अपील सं./I.T.A. No.1064/Chny/2022 िनधाŊरण वषŊ/Assessment Year: 2017-18 M/s. Shree Akshyam, AJ6, Santhi Colony, Anna Nagar, Chennai 600 040. [PAN:ACLFS9191H] Vs. The Income Tax Officer, Non Corporate Ward 7(5), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : None ŮȑथŎ की ओर से/Respondent by : Shri D. Hema Bhupal, JCIT सुनवाई की तारीख/ Date of hearing : 23.01.2023 घोषणा की तारीख /Date of Pronouncement : 31.01.2023 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 18, Chennai dated 27.07.2022 relevant to the assessment year 2017-18. 2. The appeal filed by the assessee is delayed by 74 days in filing the appeal, for which, the assessee has filed a petition for condonation of the delay, to which; the ld. DR has not raised any serious objection. I.T.A. No.1064/Chny/22 2 Consequently, since the assessee was prevented by sufficient cause, the delay in filing of the appeal stands condoned and the appeal is admitted for adjudication. 3. Brief facts of the case are that the assessee has filed his return of income on 31.10.2017 for the assessment year 2017-18 admitting its total income at NIL. The case was selected for scrutiny under CASS and notice under section 143(2) of the Income Tax Act, 1961 [“Act” in short] was generated and issued on 24.09.2018. Notice under section 142(1) of the Act was also issued to the assessee on 26.03.2019. After considering the details furnished by the assessee, the Assessing Officer has completed the assessment under section 143(3) of the Act dated 16.12.2019 assessing total income of the assessee at ₹.11,55,259/- by making disallowance of ₹.22,104/- being expenses are penal in nature and also ₹.5,35,500/- for want of proper bills/ vouchers. On appeal, the ld. CIT(A) partly allowed the appeal of the assessee. 4. On being aggrieved on the confirmation of disallowance of ₹.5,35,500/-, the assessee carried the matter in appeal before the Tribunal and contended in the grounds of appeal that the ld. CIT(A) I.T.A. No.1064/Chny/22 3 has confirmed the disallowance without application of commercial expediency and nature of transactions in hotel business. Despite notice of hearing issued on the assessee, none appeared on behalf of the assessee when the appeal was taken up for hearing or any adjournment application filed. Hence, we proceed to decide the appeal on merits after hearing the ld. DR. 5. We have heard the ld. DR, perused the materials available on record and gone through the orders of authorities below. In the profit and loss account, the assessee has debited an amount of ₹.4,11,13,052/- under the head “Provisions/Raw Materials”. On verification of Bills/vouchers, the Assessing Officer noticed that some of the bills/vouchers are not puccka and do not contain the signatures of persons raising the bills to the extent of ₹.5,35,500/-. Accordingly, the Assessing Officer disallowed the said amount and brought to tax. On appeal, the ld. CIT(A) confirmed the disallowance. The contention of the assessee before the ld. CIT(A) was that all the payments were made through banking channel. The contention of the assessee in the grounds of appeal filed before the Tribunal was that the ld. CIT(A) has confirmed the disallowance without application of commercial expediency and nature of transactions in hotel business. It is an I.T.A. No.1064/Chny/22 4 admitted fact that the assessee is running hotel, for which all the raw materials required for the hotel business cannot be purchased with puccka bills/vouchers. To meet the ends of natural justice, we remit the matter back to the file of the ld. CIT(A) to decide the issue afresh after considering the explanations as may be offered by the assessee. The assessee is also directed to furnish suitable explanation before the ld. CIT(A). 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 31 st January, 2023 at Chennai. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, 31.01.2023 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ (अपील)/CIT(A), 4. आयकर आयुƅ/CIT, 5. िवभागीय Ůितिनिध/DR & 6. गाडŊ फाईल/GF.