Bhikari Charan Meher, Sambalpur V. DCIT/ACIT.Circle-1(1), Sambalpur

ITA 111/CTK/2022

AI Insights

The case involves an appeal by Bhikari Charan Meher against the order of the CIT(A), National Faceless Appeal Centre (NFAC), Delhi, which confirmed an adhoc disallowance of Rs.3,54,390 on land development expenses incurred by the assessee during the assessment year 2017-18. The primary contention was whether the adhoc disallowance was justified when the books of account were not rejected. The assessee argued that the disallowance was made without proper basis despite providing necessary details and that it was contrary to the decision of the Supreme Court in Principal Commissioner of Income Tax vs R.G. Buildwell Engineers Ltd. The revenue contended that the necessary bills and vouchers were not produced to substantiate the expenses claimed.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 300253 (ITAT-CUTTACK)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-11-2022
• Assessment Year: misc
• Appeal Filed On: 12-01-2026
• Other Referred Cases: Principal Commissioner of Income Tax vs R.G. Buildwell Engineers Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE AND ARUN KHODPIA, ACCOUNTANT MEMBER Bhikari Charan Meher, Marwaripara, Sambalpur PAN/GIR No. (Appellant Per Bench This is an appeal filed by the assessee against the order of the ld CIT(A), National Faceless Appeal Centre (NFAC), Delhi Appeal No. ITBA/NFAC/S/250/2022 year 2017-18. 2. Shri P.K.Mishra, Ld AR appeared for the assessee and Shri S.C.Mohanty, ld Sr DR appeared for the revenue. 3. The only issue in assessee’s appeal is against the confirmation of adhoc disallowance of Rs.3,54,390/ being the land development expenses incurred by the assessee. IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.111/CTK/2022 Assessment Year : 2017-18 Bhikari Charan Meher, Marwaripara, Sambalpur Vs. DCIT/ACIT, Circle 1(1), Sambalpur PAN/GIR No.ACKPM 3263 D (Appellant) .. ( Respondent Assessee by : Shri P.K.Mishra, AR Revenue by : Shri S.C.Mohanty, Sr Date of Hearing : 17/11 Date of Pronouncement : 17/11 O R D E R This is an appeal filed by the assessee against the order of the ld , National Faceless Appeal Centre (NFAC), Delhi ITBA/NFAC/S/250/2022-23/1042823186(1) 18. Shri P.K.Mishra, Ld AR appeared for the assessee and Shri S.C.Mohanty, ld Sr DR appeared for the revenue. The only issue in assessee’s appeal is against the confirmation of disallowance of Rs.3,54,390/- representing 30% being the land development expenses incurred by the assessee. Page1 | 3 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER DCIT/ACIT, Circle 1(1), Sambalpur Respondent) P.K.Mishra, AR S.C.Mohanty, Sr DR 11/2022 11/2022 This is an appeal filed by the assessee against the order of the ld , National Faceless Appeal Centre (NFAC), Delhi dated 24.4.2022 in 23/1042823186(1) for the assessment Shri P.K.Mishra, Ld AR appeared for the assessee and Shri The only issue in assessee’s appeal is against the confirmation of representing 30% of Rs.11,81,300/- being the land development expenses incurred by the assessee. ITA No.111/CTK/2022 Assessment Year : 2017-18 Page2 | 3 4. It was submitted by ld AR that the disallowance was made on adhoc basis even though the assessee had provided the details of the persons, addresses and vehicle Nos. which had been used for the purpose of purchasing sand and leveling the same in respect of sale of land to 32 persons. It was the submission that the books of account have not been rejected and adhoc disallowance has been made. It was the submission that the disallowance is not called for and liable to be deleted in view of the decision of the Hon’ble Supreme Court in the case of Principal Commissioner of Income Tad vs R.G. Buildwell Engineers Ltd., (2018) 99 taxmann.com 284 (SC). 5. In reply, ld Sr DR submitted that the bills and vouchers in respect of the said expenses have not been produced. Ld Sr DR drew our attention to page 4 of the assessment order para 2, which was the extract of show cause notice issued by the AO to the assessee. It was the submission that the documents and evidence as called for by the AO was the bills and vouchers, which the assessee has not produced. He also submitted that the bills and vouchers were not produced before the ld CIT(A) even though the assessee has submitted that the documents in respect of the expenses were produced. It was submitted that the order of the ld CIT(A) is liable to be upheld. 6. We have considered the rival submissions. The fact in the present case clearly shows that the disallowance out of land development expenses ITA No.111/CTK/2022 Assessment Year : 2017-18 Page3 | 3 is clearly on adhoc basis. Admittedly, the books of account have not been rejected. Once this is so, adhoc disallowance is not permissible. If any disallowance is called for, specific identifiable disallowance could have been made. This has not been done in the present case. This being so, the addition made by the AO and confirmed by the ld CIT(A) stands deleted. 7. In the result, appeal of the assessee is stands allowed. Order dictated and pronounced in the open court on 17/11/2022. sd/- sd/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 17/11/2022 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Bhikari Charan Meher, Marwaripara, Sambalpur 2. The Respondent: DCIT/ACIT, Circle 1(1), Sambalpur 3. The CIT(A)-, NFAC, Delhi 4. Pr.CIT-, Sambalpur 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//