Hindustan Tin Works Ltd, New Delhi V. ACIT Circle-11(2), New Delhi

ITA 1638/DEL/2020

AI Insights

The case involves M/s. Hindustan Tin Works Ltd., the appellant, contesting the order of the Commissioner of Income Tax (Appeals), Delhi, which upheld the disallowance of certain expenses by the Assessing Officer under Section 143(3) of the Income Tax Act, 1961, for the Assessment Year 2017-18. The primary contention was regarding the disallowance of miscellaneous and pooja expenses claimed by the assessee. The Tribunal examined the submissions and evidence presented, including the volume of vouchers and bills for the claimed expenses, and the auditing of the company's accounts. The Tribunal's decision to modify the disallowances was based on the need for justice and the precedents set by similar cases.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121513 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 23-11-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 29-09-2020
• Other Referred Cases: Deputy Commissioner of Income Tax vs. M/s. Bhawani Portfolio Pvt. Ltd. in ITA No. 158/2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A No.1638/DEL/2020 Assessment Year 2017-18 M/s. Hindustan Tin Works Ltd., 426, DLF Tower-A, Jasola, New Delhi. v. Assistant Commissioner of Income Tax, Circle-11(2), New Delhi. TAN/PAN: AAACH2597Q (Appellant) (Respondent) Appellant by: Shri Madhur Aggarwal, Adv. Respondent by: Shri Kumar Pranav, Sr.DR Date of hearing: 24 11 2022 Date of pronouncement: 17 02 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he c a p t i o n e d a p p e a l h a s b ee n f i l e d by t h e A s se ss e e a g a i n st t he o rd e r o f t h e Co m m i s s i o n e r o f Inc o m e T a x ( A p pe a ls ) , D el h i (‘ C IT (A ) ’ in s h o rt ) d a t e d 1 8. 0 9 . 20 2 0 ar is i n g f ro m th e a ss e s s me n t or d e r d at e d 1 4. 1 2 . 201 9 p a ss e d b y th e A s se s s in g O f f ic e r un de r S ec t i on 1 4 3( 3 ) o f t he I nc o m e T a x A c t, 1 96 1 ( t he A c t) c on c e r n i n g A Y 201 7- 1 8. 2. T he s ub s ta nt i v e g ro un ds o f a p p ea l r a i s e d b y th e a sse ss ee re a ds a s u n d e r : “ 1 . Th at o n t h e f a c t s a n d i n t h e c i r c u m s ta n c e s of th e c a s e a nd i n l a w t h e L e ar ne d C o m m i s s i o n e r of I nc o m e Ta x ( A pp e a l ) e r r e d in d i s m i s s i n g t h e ap pe a l o f ap pe l l a nt c o m p an y a nd r e t ain i n g d i s a l l o w an c e o f R s . 6 , 1 2 , 40 9/ - in t he or de r p a s s e d by Ld . A s s i s t a nt C o m m i s s i o n e r o f In c om e T ax C i r c l e - 11 ( 2 ) N e w D e lh i u/ s . 1 4 3 ( 3 ) of I.T.A No.1638/Del/2020 2 t h e In c om e Ta x A c t , 1 9 61 . 2 . Th at Ld . C I T (A p p e a l )- 4 N e w D e l hi gr o s s l y e r r e d i n l a w a nd o n f a c t s w hi l e s u s t a i n i n g a dh o c d i s a l l o w an c e of R s .5 , 7 6 , 8 4 6/ - at t h e r at e o f 2 5 p e r c e nt of o t he r m i s c e l l a ne o u s e x p e ns e s of R s . 2 3 , 0 7 , 3 86 / -. 3 . Th at Ld . 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T he C I T ( A ) a l s o c o n fi r me d t h e a fo r e s a i d ac t i o n. 6. T o s u pp ort i t s c l a i m, t he l d. c ou n s e l f or t h e a ss es s ee su b m it s t ha t t he as s e ss e e i s e ng a g ed i n t h e ma nu fa c tu ri ng of Ti n /M e t al Co n t a i n e r s a n d s a l e o f t in pl at e s. T he as se ss e e as per th e r e t u rn o f i nc o m e d e c l a r e d ta x ab le i n c o me i n t h e v i c in it y o f Rs. 9. 9 cr or e. Wh il e la r g e i n c o m e o n a v er y l a r ge t u r no ve r, t h e a sse ss e e ha s i nc ur r e d e xp en se s o f m i sc e l l a n e o u s n at u r e on i t s u ni t a n d c or p o r a t e o f fi c e . T he l e dg er a c c o un t o f t h e e xp e n se s w e r e fu rn i sh ed be for e t he Re ve n u e A u th or i t i es bu t h o w ev er t he v ou c h e r s / bi l ls o f mi sc e ll a n e o u s n at u r e w a s no t fu r ni sh e d o n ac c o un t of s uc h v o uc he rs be i ng e x t r e m e l y v o l u m i n o us. T h e a c c o un ts a r e au di t ed an d n o di s c r e p a n c y ha s b e e n fo un d . T h e l d. co u ns e l fu r t h e r s u b m it s t h at si mi l ar e x pe ns e s h av e be en i n c u rr e d i n t he e a r l ie r ye ar s a n d n o di s a l l o w a n c e s h a v e be e n c a r r i e d o u t e x c ep t i n A sse ss m en t Y e a r I.T.A No.1638/Del/2020 3 20 1 6- 17. 7. W e h a v e h e a rd t h e r i v a l su b mi s si on s. In t h e ab sen c e o f su b st a n t i a t i o n, t he A ss es si ng O f fi c e r w a s j us t i fi e d i n m ak in g di s a l l o w a n c e o f e s ti m at e d e x p e n se s a s h e l d by t he Ho n ’b l e D e l h i H ig h C ou rt i n t he j u d g m e n t d a t e d 1 2 t h Ju l y 2 02 1 i n t he c as e o f D ep ut y C om m i s si on e r of In co m e T a x v s . M/ s. B ha wa n i P o r t f o l i o P vt . L t d. i n IT A N o . 158 /2 0 20 a n d C M A p p li c at i o n N o. 7 9 46 /2 02 0. A t t he sa me t i m e , w e ob ser ve t ha t t h e di s a l l o w an ce c ar r i e d ou t i n t h e i mm e d i a t e l y p r e c e di n g A ss e s s m e n t Y e a r 2 0 15 - 16 is a bo ut 3. 5 % o f t he e x p e n se s. We t he r e fo r e fe e l t h a t t h e e s t i ma t i ons ma d e to w ar ds di s a l l o w a n c e s i n A sse s s m e n t Y ea r 20 1 7- 1 8 i n q u e st i on i s h i g hl y e xc es si v e. W e t he r e f or e m od i f y t he es ti m a t i o n s a t 5% o f t h e e xp e n se s i nc ur re d i nst ea d o f 2 5 % t o me e t t h e e nd s of j us t i ce . H en c e, G ro u nd N o . 2 i s pa r t l y a l l o w ed . 8. G r ou n d N o . 3 c o n c e r ns ad h o c d i s a l l o w an ce o f R s. 3 5, 56 3/ - e st i m at e d a t 2 5 % o f P o o j a e x p e n se s o f Rs. 1 , 42, 2 49 / -. In t he l i g ht o f t he a d m i s si o n ma d e b y t h e a s s es se e b e fo r e t h e A O f or d i sa l lo w a n c e @ 20% o f s uc h e xp e n se s, t he d i sa ll o w an ce i s r e st r ict e d t o Rs. 2 8 , 450 / - @ 2 0 % ha v i n g re ga r d t o t he ove ra l l s u b m is s io ns ma de a nd t he p ro f i le o f t he c o mp a n y. H en ce , G rou nd N o. 3 i s pa rt l y a ll ow e d. 9. I n t h e re s ul t , th e a p p e a l o f th e a s se ss e e i s pa rtl y a l l ow e d. Order pronounced in the open Court on 17/02/2023. Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /02/2023 Prabhat