Garve Motors Private Limited, Pune V. Deputy Commissioner of Income Tax, Circle-1(1), Pune

ITA 183/PUN/2023

AI Insights

The case involves Garve Motors Private Limited, an authorized dealer of Hyundai Cars, appealing against an order from the National Faceless Appeal Centre (NFAC), Delhi, which upheld an ad-hoc disallowance of expenses claimed under 'Other Expenses' for the assessment year 2015-16. The AO initially disallowed 10% of these expenses due to insufficient evidence, a decision partially upheld by the CIT(A) at NFAC, which reduced the disallowance to 8%. The Tribunal, after reviewing the submissions and the lack of adverse comments on the genuineness of the expenses, decided to further reduce the disallowance to 5%.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132960 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 23-05-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 13-02-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI G.D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.183/PUN/2023 धििधारण वर्ा / Assessment Year : 2015-16 Garve Motors Private Limited, S. No. 136/2A, 4/6 Mumbai Pune Bypass Highway, Wakad, Pune – 411027 PAN : AADCG4391A .......अपीलार्थी / Appellant बनाम / V/s. DCIT, Circle -1(1), Pune ......प्रत्यर्थी / Respondent Assessee by : Smt. Deepa Khare Revenue by : Shri Ramnath P. Murkunde सुनवाई की तारीख / Date of Hearing : 24-05-2023 घोषणा की तारीख / Date of Pronouncement : 30-05-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 10-01-2023 passed by the National Faceless Appeal Centre, Delhi (“NFAC”) for assessment year 2-15-16. 2. The sole ground raised by the assessee challenging the action of CIT(A) in restricting the addition to an extent of Rs.9,62,904/- as against 2 ITA No. 183/PUN/2023, A.Y. 2015-16 Rs.12,03,630/- disallowance made by the AO on account of other expenses in the facts and circumstances of the case. 3. At the outset, we note that the assessee is a private limited company which is authorized dealer of Hyundai Cars. The assessee claimed deduction of expenses under the head “Other Expenses”, the details of which reproduced by the AO in his order at page No. 2. On perusal of same, we note that the AO asked the assessee to furnish evidences in support of claim of the said expenses. The AO held that the explanation and documents filed by the assessee, on verification, that some of the vouchers are not supported by the evidences and are handmade. Accordingly, the AO disallowed 10% of such expenses. Having aggrieved with the order of AO, the assessee questioned the said ad-hoc disallowance before the CIT(A) in NFAC, Delhi. The CIT(A), NFAC, Delhi discussed the issue in para No. 5.1 of the impugned order and restricted the said addition to 8% to meet the ends of justice by holding the view of AO is correct. 4. The ld. AR, Smt. Deepa Khare before us vehemently argued that the AO did not comment about the genuineness of the expenditure but only doubted that some of the vouchers by holding they are handmade. She submits that the assessee cannot submit the supporting evidences for every expenditure incurred during the course of business for which the assessee made such vouchers on its own. She argued without there being any adverse reference by the AO with regard to genuineness of expenses, the addition made on ad-hoc basis is not maintainable and prayed to delete the same. 3 ITA No. 183/PUN/2023, A.Y. 2015-16 5. The ld. DR, Shri Ramnath P. Murkunde vehemently supported the order of both the authorities below and submits that the assessee failed to furnish evidences in support of expenditure incurred. 6. We note that, admittedly, the AO made no adverse reference to the expenditure incurred by the assessee and no comment stating that the said expenditure was not incurred for the assessee’s business. The only remark made by the AO is that no evidences were furnished by the assessee in respect of some of the vouchers which are handmade and doubting the same disallowed on ad-hoc basis. Even before us, the assessee could not submit any of the said vouchers which are doubted by the AO and the CIT(A), NFAC, Delhi for our examination. The ld. AR submitted her inability to produce the same as they were running into huge volumes of vouchers. Therefore, in the absence of such vouchers for our examination, we have no alternative except to concur with the finding of authorities below, but however, having not doubted about the genuineness of the expenditure by both the authorities below, in the interest of justice, we restrict the said disallowance to 5% of Rs.1,20,36,301/-. Therefore, the order of CIT(A), NFAC, Delhi is set aside. The AO is directed to restrict the disallowance to 5%. Thus, the sole ground raised by the assessee is partly allowed. 7. In the result, the appeal of assessee is partly allowed. Order pronounced in the open court on 30 th May, 2023. Sd/- Sd/- (G.D. Padmahshali) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ददनाांक / Dated : 30 th May, 2023. रवि 4 ITA No. 183/PUN/2023, A.Y. 2015-16 आदेश की प्रतततलतप अग्रेतषत / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The concerned CIT, Pune. 4. तवभागीय प्रतततनति, आयकर अपीलीय अतिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गार्ड फ़ाइल / Guard File. //सत्यातपत प्रतत// True Copy// आदेशानुसार / BY ORDER, िररष्ठ विजी सविि / Sr. Private Secretary आयकर अपीलीय अविकरण ,पुणे / ITAT, Pune