Shree Vasavi Industries, Gulbarga V. CIT, Gulbarga

ITA 182/BANG/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0274 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 22-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 12-02-2016
• Court: TRIBUNAL
• Assessee Lawyers: SHREEHARI KUTSA

Judgement Text

ITA.182/BANG/2016 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'C', BANGALORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A NO.182/BANG/2016 (ASSESSMENT YEAR : 2010-11) M/S. SHREE VASAVI INDUSTRIES, SY.NO.169, KAPNOOR, 2 ND STAGE, INDUSTRIAL AREA, GULBARGA .. APPELLANT PAN : ABLFS1021K V. INCOME-TAX OFFICER, WARD 1, GULBARGA .. RESPONDENT ASSESSEE BY : SHRI. SHREEHARI KUTSA, CA REVENUE BY : SMT. SWAPNA DAS HEARD ON : 22.06.2016 PRONOUNCED ON : 15.07.2016 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY ASSESSEE, ITS GRIEVANCE IS THAT CIT (A) CONFIRMED AD HOC DISALLOWANCE OF RS.1,92,969/-, MAD E BY THE AO. 02. ASSESSEE, A MANUFACTURER OF DAL HAD FILED HIS R ETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR DECLARING INCOME OF RS.10, 49,790/-. DURING THE COURSE OF ASSESSMENT THE AO AFTER VERIFYING THE LED GERS AND BILLS PRODUCED ITA.182/BANG/2016 PAGE - 2 BY ASSESSEE CAME TO AN OPINION THAT SOME OF THE EXP ENSES WERE NOT SUPPORTED BY PROPER VOUCHERS. PLEADING OF THE ASSE SSEE WAS THAT IT WAS UNABLE TO UPDATE THE VOUCHERS AND THE BILLS DUE TO BUSY SCHEDULE OF HIS BUSINESS. AO THEREFORE MADE AN AD HOC DISALLOWANCE OF 10% OF EXPENDITURE CLAIMED FROM BARDAN PURCHASE, FIREWOOD PURCHASE, MACHINERY REPAIR AND MAINTENANCE, POLISH POWDER PURCHASE, SOR TING AND CLEANING, SWEET OIL AND LABOUR CHARGES. 03. AGGRIEVED ASSESSEE MOVED IN APPEAL BEFORE THE C IT (A). HOWEVER, CIT (A) CHOSE TO CONFIRM THE ORDER OF AO. AS PER T HE CIT (A), ASSESSEE COULD NOT PRODUCE ANY EVIDENCE FOR THE VOUCHERS IN SUPPORT OF ITS CASE. 04. NOW BEFORE US, LD. AR ASSAILING THE ORDERS OF L OWER AUTHORITIES SUBMITTED THAT THERE WAS NO SPECIFIC DEFECT POINTED OUT BY THE AO. ACCORDING TO HIM THE AO HAD GIVEN A CLEAR FINDING T HAT EXPENSES WERE SUPPORTED BY VOUCHERS. HIS ONLY NEGATIVE OBSERVATI ON WAS THAT THE ASSESSEE WAS NOT ABLE TO KEEP THE VOUCHERS UP TO DA TE. ACCORDING TO HIM ASSESSEE WAS MAINTAINING ALL THE VOUCHERS. IF GIVE N AN OPPORTUNITY ASSESSEE WOULD BE ABLE TO SATISFY THE AO. 05. PER CONTRA, LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ITA.182/BANG/2016 PAGE - 3 06. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THE REASON FOR AD HOC DISALLOWANCE OF 10% MADE BY THE A O IS THAT SOME OF THE EXPENSES WERE NOT SUPPORTED BY PROPER VOUCHERS WITH ADDRESS AND DATES. CIT (A) HAS MADE AN OBSERVATION THAT ASSESSEE HAD A CCEPTED THE AD HOC DISALLOWANCE. IN MY OPINION BEFORE MAKING THE DI SALLOWANCE THE AO SHOULD HAVE BROUGHT OUT SPECIFIC DEFECTS LISTING OU T THE PAYMENTS WHERE VOUCHERS WERE DEFECTIVE. ESPECIALLY SO SINCE ASSES SEE CLAIMED MAINTENANCE OF SUPPORTING VOUCHERS FOR ALL THE EXPE NDITURE. I AM OF THE OPINION THAT THE DISALLOWANCE MADE WAS PURELY ON SU RMISES. SUCH DISALLOWANCE STANDS DELETED. 07. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH DAY OF JULY, 2016. SD/- (ABRAHAM P GEORGE) ACCOUNTANT MEMBER MCN COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER