MR. NIKHIL VIJAY CHAUHAN, MUMBAI V. ITO 21(2)(4), MUMBAI

ITA 1702/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3744 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 22-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VARMA
• Keywords: Set aside
• Section: 201

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) I.T.A. NO. 1702/MUM/2019 (ASSESSMENT YEAR 2012-1 3) MR. NIKHIL VIJAY CHAUHAN 5, AMAR KUNJ, SHIVAJI PARK, CADELL WORD, DADAR WEST, MUMBAI-400 028. PAN : AFLPC2021D VS . ITO-21(2)(4) 109, 1 ST FLOOR PIRMAL CHAMBERS PAREL, LALGABUG MUMBAI-400 012. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY MS. SMITA VARMA DATE OF HEARING 11.01.2021 DATE OF PRONOUNCEMENT 01.03.2021 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [IN SHORT LEAR NED CIT(A)] DATED 31.01.2019 PERTAINING TO ASSESSMENT YEAR (A.Y.) 201 2-13. 2. THE GROUNDS OF APPEAL READ AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ADHOC DISALLOWANCE O F RS. 4,04,798/- BEING 10% OF THE EXPENSES OF RS. 40,47,980/- BEING SALARY AND INCENTIVES TO SALESMAN, DRIVERS, DELIVERY BOYS AND OFFICE STAFF IN THE COURSE OF BUSINESS AS DISTRIBUTOR AND SELLING AGENTS OF HINDUSTAN LEVER LI MITED - RS. 1,25,082/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT[A] ERRED IN CONFIRMING THE ADHOC DISALLOWANCE O F RS. 79,864/- BEING 15% OF GENERAL EXPENSES OF RS. 5,32,425/- ON ACCOUN T OF CONVEYANCE, TRAVELLING AND TELEPHONE EXPENSES RS. 24,678/- 3. IN THIS CASE THE ASSESSEE IS A PROPRIETOR OF M/S . PRASAD ENTERPRISES AND IS A DISTRIBUTOR AND SELLING AGENT OF HINDUSTAN UNI LEVER LIMITED. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER NOTED THAT T HERE WAS SOME REDUCTION IN GROSS PROFIT RATE. HE OBTAINED EXPLANATION FROM THE ASSESSEE. HE DID NOT 2 DISPUTE THE EXPLANATION. HOWEVER, WITHOUT GIVING AN Y SPECIFIC REASON HE MADE ADHOC DISALLOWANCE IN SALARY AND INCENTIVE TO SALES MEN @ 10% AND CONVEYANCE TRAVELLING AND TELEPHONE CHARGES @ 5%. 4. UPON ASSESSEES APPEAL LEARNED CIT(A) CONFIRMED THE SAME. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 5. I HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. IN MY CONSIDERED OPINION ADHOC DISALLOWANC E WITHOUT POINTING OUT ANY DEFECT IN THE VOUCHERS WHATSOEVER IS NOT SUSTAI NABLE IN LAW. THAT PERSONAL ELEMENT CAN BE RULED OUT IS NOT LEGALLY SUSTAINABL E GROUND WHATSOEVER. HENCE, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE DISALLOWANCE. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 1.3.2021. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI; DATED : 01/03/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI