Vigilant Technologies , Hyderabad V. Income Tax Officer, Ward-10(5), Hyderabad

ITA 1138/Hyd/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7249 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 06-11-2019
• Assessment Year: 2016-2017
• Appeal Filed On: 15-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B - SMC , HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.1138 /HYD/20 19 ASSESSMENT YEAR: 20 16 - 17 M/S. VIGILANT TECHNOLOGIES, HYDERABAD. PAN: AAFV 7602 N VS. ITO, WARD - 10(5), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI A.V. RAGHURAM REVENUE BY: SMT. MATTA PADMA, DR DATE OF HEARING: 06/11/2019 DATE OF PRONOUNCEMENT: 30 / 01 /20 20 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A) - 6, HYDERABAD IN ITA NO.10430/2018 - 19/C/CIT(A) - 6, DATED 15/5/2019 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE AY 2016 - 17. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE, THE ORDER OF THE LD CIT (A) - 6, HYDERABAD, ALLOWING THE APPEAL ONLY IIN PART IS PREJUDICIAL TO THE APPELLANT. THE CIT (A) OUGHT TO HAVE ALLOWED THE APPEAL IN ENTIRETY. 2. THE CIT (A) OUGHT TO HAVE GIVEN SUFFICIENT OPPORTUNITY TO THE APPEL LANT TO PUT FORTH ITS CASE. 2 3. THE CIT (A) ERRED IN SUSTAINING THE ADDITION OF RS. 2,00,603 BEING THE ADHOC DISALLOWANCE IN RESPECT OF VARIOUS EXPENDITURES INCURRED BY THE APPELLANT. THE CIT (A) OUGHT TO HAVE APPRECIATED THAT MOST OF THE EXPENDITURE IS PAID BY CHEQUES AND THERE WAS NO SCOPE TO MAKE ANY ADHOC DISALLOWANCE. 3. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE US THAT THE AD - HOC DISALLOWANCE OF RS. 2,00,603/ - SUSTAINED IN THE HANDS OF THE ASSESSEE BY THE LD. CIT (A) IS UNJUSTIFIABLE BECAUSE MOST OF THE PAYMENTS WERE MADE BY CHEQUE. IT WAS THEREFORE PLEADED THAT SUITABL E RELIEF MAY BE GRANTED TO THE ASSESSEE . THE LD. DR ON THE OTHER HAND SUBMITTED THAT THE ASSESSEE HAD NOT FURNISHED THE BILLS AND VOUCHERS IN SUPPORT OF THE EXPENSES INCURRED AGGREGATING TO RS. 13,57,744/ - WITH RESPECT TO THE EXPENDITURE INCURRED SUCH AS S TAFF WELFARE, POSTAGE & COURIER, OFFICE MAINTENANCE, PRINTING & STATIONERY, REPAIRS AND MAINTENANCE, TELEPHONE & MOBILE, ACCOUNTING CHARGES ETC., BEFORE THE LD. AO. HENCE, T HE LD. AO MADE DISALLOWANCE O F 20% OF THE SAME AMOUNTING TO RS. 2,71,550/ - . THE L D. AR FURTHER SUBMITTED THAT ON APPEAL BY THE ASSESSEE , THE LD. CIT (A) AFTER EXAMINING THE ISSUE DIRECTED THE LD. AO TO DISALLOW 20% O F THE EXPENDITURE INCURRED FOR RS. 10,03,016/ - BECAUSE WITH RESPECT TO THE OTHER EXPENDITURE INCURRED THE LD. AO HAD NOT PROVIDED PROPER OPPORTUNITY TO THE ASSESSEE FOR FURNISH ING THE DOCUMENTARY EVIDENCE. IT 3 WAS THEREFORE PLEADED THE ORDER OF THE LD. CIT (A) MAY BE UPHELD AS IT IS QUITE REASONABLE. 4. I HAVE HEARD THE RIVAL SUBMISSION AND CAREFULLY EXAMINED THE MATERIALS ON RECORD. IT IS APPARENT FROM THE ORDERS OF THE LD. REVENUE AUTHORITIES THAT THE ENTIRE ADDITION MADE BY THE LD. AO WHICH IS PARTLY SUS TAINED BY THE LD. CIT(A) IS BASED ON ESTIMATION. CONSIDERING THE FACTS OF THE CASE AND THE NATURE OF BUSINESS CONDUCTED BY THE ASSESSEE AND THE NATURE OF EXPENSES INCURRED , I AM OF THE VIEW THAT 10% OF THE TOTAL EXPENDITURE INCURRED BY THE ASSESSEE O N RS. 10,03,016/ - WOULD BE REASONABLE FOR DISALLOWANCE . ACCORDINGLY, I HEREBY SUSTAIN THE DISALLOWANCE OF RS. 1 LAKH AS AGAINST THE TOTAL DISALLOWANCE OF RS. 2,00,603/ - SUSTAINED BY THE LD. CIT (A). IT IS ORDERED ACCORDINGLY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED I N THE OPEN COURT ON 30 TH JANUARY, 2020. SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER H YDERABAD, DATED: 30 TH JANUARY, 2020 OKK 4 COPY TO: - 1) M/S. VIGILANT TECHNOLOGIES, H.NO.10 - 3 - 189 & 190, FLAT NO.304, 3 RD FLOOR, SOUTH BLOCK, ARCHANA ARCADE, ST. JOHNS ROAD, BEHIND HOTEL RAMAKRISHNA, HYDERABAD - 500067. 2) INCOME TAX OFFICER, WARD - 10(5), HYDERABAD. 3) THE CIT(A) - 6 , HYDERABAD 4) THE PR. CIT - 6 , HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE