Rohit Ramesh Adke, Nashik V. Income-tax Officer,

ITA 109/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1707 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 22-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 109 /PN/201 5 / ASSESSME NT YEAR : 20 1 0 - 11 ROHIT RAMESH ADKE, NEAR SRP OFFICE, CAMP ROAD, MALEGAON, DIST. NASHIK . / APPELLANT PAN: AFCPA6967M VS. THE INCOME TAX OFFICER, WARD 3(4), MALEGAON . / RESPONDENT / APPELLANT BY : NONE (WRITTEN SUBMISSIONS) / APPELLANT BY : NONE (WRITTEN SUBMISSIONS) / RESPONDENT BY : SHRI SUDHANSU SHEKHAR, JCIT / DATE OF HEARING : 15 . 0 6 .201 6 / DATE OF PRONOUNCEMENT: 17 . 0 6 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - I , NASHIK , DATED 18 . 11 .20 1 4 RELATING TO ASSESSMENT YEAR 20 1 0 - 11 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE APPEAL WAS FIXED FOR HEARING AND THE AS SESSEE HAS FILED WRITTEN SUBMISSIONS WHICH ARE TAKEN ON RECORD . ITA NO. 109 /PN/20 1 5 ROHIT RAMESH ADKE 2 3. THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEAL IN THE PRESENT APPEAL AND ALL ARE AGAINST DISALLOWANCE OF EXPENSES UNDER DIFFERENT HEADS. THE ASSESSING OFFICER HAD MADE TOTAL DISALLOWAN CE OF RS. 8,23,722/ - ON ACCOUNT OF NON - MAINTENANCE OF PROPER VOUCHERS FOR CLAIMING EXPENDITURE UNDER DIFFERENT HEADS. THE APPEAL OF THE ASSESSEE WAS DECIDED EX - PARTE BY THE CIT(A) AND THE DISALLOWANCE OF EXPENSES WERE RESTRICTED TO 50% OF THE TOTAL DISALLO WANCE MADE BY THE ASSESSING OFFICER, IN TURN, GRANTING RELIEF OF RS. 4,26,806/ - . 4. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 5. IN THE WRITTEN SUBMISSIONS, THE CLAIM OF ASSESSEE WAS THAT HIS BOOKS OF ACCOUNT WERE AUDITED AND THE AUDITOR HA D NOT POINTED OUT ANY DEFECT IN THE BOOKS OF ACCOUNT. FURTHER, HE CLAIMS TO HAVE PRODUCED BOOKS OF ACCOUNT WITH VOUCHERS FOR VERIFICATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER HAD NOT REJECTED THE SAID BOOKS OF ACCOUNT. AN OTHER PLEA RAISED BY THE ASSESSEE IS THAT WHERE THE REASONABLENESS OF EXPENSES IS NOT DOUBTED BY EITHER THE ASSESSING OFFICER OR CIT(A), THE IMPUGNED DISALLOWANCE SHOULD NOT BE MADE ESPECIALLY, WHERE THE ASSESSING OFFICER HAS FAILED TO BRING ON RECORD ANY PARTICULAR INSTANCE OF EXPENSES BEING NOT VOUCHED. 6. ON PERUSAL OF RECORD, IT IS APPARENT THAT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE WAS A CONTRACTOR AND HAD DECLARED TOTAL CONTRACT RECEIPTS OF RS. 2,27,46,682/ - . THE ASSESSEE IN TURN, HAD FILE D THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 10,01,930/ - . THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD DEBITED SEVERAL EXPENSES UNDER DIFFERENT HEADS AND FROM THE VERIFICATION OF THE SAME, THE ASSESSING OFFICER NOTED THAT EXPENSES CLAIMED BY T HE ASSESSEE WERE NOT PROPERLY VOUCHED AND SOME OF THEM WERE SUPPORTED BY SELF - MADE VOUCHERS. THE ASSESSING OFFICER ALSO NOTES THAT THE ISSUE / DEFECT WAS DISCUSSED WITH THE PARTY PRESENT DURING THE COURSE OF ASSESSMENT ITA NO. 109 /PN/20 1 5 ROHIT RAMESH ADKE 3 PROCEEDINGS AND PART OF THE EXPENSES WERE DISALLOWED BEING 10% / 15%. THE DETAILS OF EXPENSES AND THE DISALLOWANCE WORKED OUT BY THE ASSESSING OFFICER ARE TABULATED HEREUNDER: - NATURE OF EXPENDITURE AMOUNT OF EXPENSES CLAIMED % OF DISALLOWANCE TOTAL AMOUNT DISALLOWED IN RS. SAND & BRIC KS 1100585 10% 110058 PLUMBING MATERIAL 384752 10% 38475 CAR EXPENSES 34226 15% 5134 DIESEL 954316 10% 95432 MEMBERSHIP FEES (NOT VOUCHED) 4200 100% 4200 OFFICE EXPENSES 55525 10% 5552 REPAIRS AND MAINTENANCE 436860 10% 43686 TRAVELLING 43234 15% 64 85 WAGES 8578340 6% 514700 TOTAL 823722 7. THE PERUSAL OF THE ABOVE SAID DETAILS REFLECTS THAT THOUGH PARTICULAR PERCENTAGE DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER, HOWEVER, THE PERCENTAGE IN RESPECT OF EACH OF THE EXPENDITURE IS NOT CONSTANT BUT VARIES I.E. IN RESPECT OF SAND & BRICKS, PLUMBING MATERIAL, DIESEL, OFFICE EXPENSES AND REPAIR & MAINTENANCE, THE DISALLOWANCE WAS 10% OF THE TOTAL EXPENDITURE AND OUT OF TRAVELLING AND CAR EXPENSES, DISALLOWANCE @ 15% WAS MADE . FURTHER, OUT OF WAGES, DISALLOWANCE @ 6% WAS ONLY MADE. THE MEMBERSHIP FEES OF RS. 4200/ - WAS DISALLOWED IN ENTIRETY AS THE ASSESSEE HAD NOT PRODUCED ANY VOUCHERS IN THIS REGARD. THE ASSESSING OFFICER THUS, HAD APPLIED HIS MIND TO THE DISALLOWANCE WORKED OUT AND THE SAME WAS N OT ADHOC DISALLOWANCE. 8. BEFORE THE CIT(A), THOUGH THE ASSESSEE FAILED TO FURNISH COMPLETE EVIDENCE AND ALSO FAILED TO APPEAR, HOWEVER, THE CIT(A) RESTRICTED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER TO 50% OF THE TOTAL DISALLOWANCE I.E. TO THE EXT ENT OF RS.4,11,862/ - . 9. THE ASSESSEE IN THE WRITTEN SUBMISSIONS HAS ONLY OBJECTED TO THE AFORESAID DISALLOWANCE MADE BY THE ASSESSING OFFICER, BUT HAS FAILED TO M EET THE OBJECTIONS OF ASSESSING OFFICER THAT THE EXPENSES INCURRED BY IT WERE NOT ITA NO. 109 /PN/20 1 5 ROHIT RAMESH ADKE 4 FULLY VOUC HED. FURTHER, THE ASSESSING OFFICER ALSO NOTES THAT THE DISALLOWANCE WAS DISCUSSED WITH THE ASSESSEE. IN VIEW THEREOF, I AM OF THE VIEW THAT CERTAIN DISALLOWANCE MERITS TO BE UPHELD IN THE HANDS OF ASSESSEE. HOWEVER, IN FAIRNESS OF JUSTICE, THE DISALLOW ANCE IS RESTRICTED TO 25% OF TOTAL DISALLOWANCE WORKED OUT BY THE ASSESSING OFFICER. FURTHER, THERE IS NO MERIT IN THE PLEA OF ASSESSEE THAT WHERE THE INCOME AND EXPENDITURE ACCOUNT IS AUDITED, NO FURTHER DISALLOWANCE CAN BE MADE BY THE AUTHORITIES BELOW. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO RE - COMPUTE THE INCOME IN THE HANDS OF ASSESSEE. THE VARIOUS GROUNDS OF APPEAL RAISED BY THE ASSESSEE AGAINST INDIVIDUAL DISALLOWANCES MADE UNDER DIFFERENT HEADS ARE PARTLY ALLOWED. 1 0 . IN THE RESULT, TH E APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 17 TH DAY OF JUNE , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 17 TH JUNE , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPO NDENT; 3. ( ) / THE CIT(A) - I , NASHIK ; 4. / THE CIT - I , NASHIK ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COP Y // / SR. PRIVATE SECRETARY , / ITAT, PUNE