Sh. Harbans Singh, Ambala City V. DCIT, Ambala

ITA 200/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5493 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 24-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: A BENCH: CH ANDIGARH BEFORE SHRI D K SRIVASTAVA, AM AND MS. SUSHMA CHOWL A, JM ITA NO. 200/CHANDI/2011 ASSESSMENT YEAR: 2007-08 HARBANS SINGH V. D.C.I.T., AMBALA PROP. M/S BHASIN SILK & SAREES COLLECTION DSC ROAD, AMBALA CITY PAN: ADNPB 1553 B APPELLANT BY: SHRI TEJ MOHAN SINGH RESPONDENT BY: SHRI N.K. SAINI ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 7.1.2011, ON THE FOLLOW ING GROUNDS: 1 THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE DISALLOWANCE OF RS. 50,000/- OUT OF SALARY PAID WHI CH IS ARBITRARY AND UNJUSTIFIED. 2 THAT COMPLETE DETAILS OF SALARIES PAID AND SUPPO RTING VOUCHERS HAVE BEEN MAINTAINED AND AS SUCH THERE IS NO SUBSTANCE IN DIS ALLOWANCE OF THE SALARY. 3 THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDI NG THE ELECTRIC AND GENERATOR EXPENSES WHICH ARE EXCLUSIVELY FOR BUSINE SS PREMISES AND THERE IS NO ELEMENT OF PERSONAL NATURE IN THE SAME AND NO DISAL LOWANCE IS WARRANTED. 4 THAT THE LD. CIT(A) HAS RESTRICTED THE DISALLOWA NCE OF VARIOUS EXPENSES TO THE EXTENT OF 1/10 TH WHICH IS ARBITRARY AND UNJUSTIFIED WITHOUT THERE B EING ANY PERSONAL ELEMENT OF EXPENSES SUCH AS TOUR AND TRAVE LING EXPENSES DISALLOWED AT RS. 9857/- OUT OF THE TOTAL CLAIM OF RS. 49,285/- W HICH IS AGAIN ARBITRARY AND UNJUSTIFIED. 5 THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDI NG THE CHARGING OF INTEREST U/SS 234-B AND 234-D OF THE ACT AND ALSO THE WITHDR AWAL OF INTEREST U/S 244-A OF THE ACT WHICH IS ERRONEOUS. 2. AT THE TIME OF HEARING, GROUND NOS. 4 AND 5 WERE NOT PRESSED. THEY ARE THEREFORE DISMISSED AS NOT PRESSED. 3. APROPOS GROUND NOS. 1 AND 2, THE LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE WITH THE FOLLOWING OBSERVATIONS:- I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE B Y THE APPELLANT AND REASONING GIVEN BY THE AO FOR MAKING THE DISALLOWANCE. IT IS SEEN THAT THE AO AFTER OBSERVING THAT COMPLETE DETAILS OF SALARY HAVE NOT BEEN MAINTAINED, MADE A MEAGER DISALLOWANCE OF RS. 50,000/- OUT OF SALARY E XPENSES AT RS. 12,,36,600/-. THE APPELLANT HAS THOUGH CONTENDED THAT COMPLETE DE TAILS OF SALARY AND SUPPORTING VOUCHERS HAVE BEEN MAINTAINED, NO SUPPOR TING DETAILS WERE FILED BEFORE THE UNDERSIGNED DURING THE COURSE OF APPELLA TE PROCEEDINGS. THEREFORE, THE APPELLANTS CONTENTION REMAINS UNSUBSTANTIATED AND IS REJECTED. THE DISALLOWANCE MADE BY THE AO IS UPHELD. THIS GROUND OF APPEAL IS DISMISSED. HARBANS SINGH, AMBALA CITY 200/CHANDI/2011 2 2 4. PERUSAL OF THE AO PASSED BY THE LD. CIT(A) SHOWS THAT THE IMPUGNED DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) FOR WANT OF PROPER VOUCHERS. IT IS STATED IN THE ASSESSMENT ORDER THAT THE VOUCHERS MAINTAINED BY THE ASSESSEE DID NOT CONTAIN COMPLETE ADDRESS OF THE EM PLOYEES. BOTH THE DEPARTMENTAL AUTHORITIES HAVE CONCURRENTLY RECORDED THEIR FINDIN G THAT PROPER VOUCHERS WERE NOT MAINTAINED BY THE ASSESSEE. THERE IS NO MATERIAL PL ACED BEFORE US TO REBUT THE AFORESAID FINDING RECORDED BY THEM. WE HOWEVER FIND THAT DISA LLOWANCE OF RS. 50,000/- OUT OF TOTAL SALARY EXPENSES AT RS. 12,36,600/- IS EXCESSIVE AND IS ON HIGHER SIDE. WE, THEREFORE, RESTRICT THE DISALLOWANCE TO RS. 25,000/-. GROUND N O. 1 TAKEN BY THE ASSESSEE IS PARTLY ALLOWED WHILE GROUND NO. 2 IS DISMISSED. 5. APROPOS GROUND NO. 3, THE AO DISALLOWED 1/5 TH OF EXPENSES ON ELECTRICITY AND GENERATOR ON THE GROUND THAT THE EXPENSES WERE NOT PROPERLY VOUCHED AND WERE INCURRED IN CASH. THE AO ALSO FELT THAT USE OF ELECTRICITY A ND GENERATOR FOR RESIDENTIAL PURPOSES COULD NOT BE RULED OUT. HE, THEREFORE, DISALLOWED 1 /5 TH OF THE AFORESAID EXPENSES. ON APPEAL, THE LD. CIT(A) HAS RESTRICTED THE DISALLOWA NCE TO 1/10 TH ON ACCOUNT OF PERSONAL USER AND ALSO FOR WANT OF PROPER VOUCHERS. IF THE A FORESAID EXPENSES WERE PROPERLY VOUCHED AND NOT RELATED TO PERSONAL USER, IT WAS OP EN TO THE ASSESSEE TO FILE THOSE VOUCHERS BEFORE THE CIT(A). IN THE ABSENCE OF RELIA BLE BILLS AND VOUCHERS TO SUPPORT THE AFORESAID EXPENSES, THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE DISALLOWANCE. GROUND NO. 3 TAKEN BY THE ASSESSEE IS DISMISSED. 6. IN VIEW OF THE FOREGOING, APPEAL FILED BY THE AS SESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON APRIL 2011 (SUSHMA CHOWLA) (D K SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER CHANDIGARH: THE APRIL 2011 SURESH COPY TO: 1. THE APPELLANT, HARBANS SINGH, AMBALA CITY 2. THE RESPONDENT, D.C.I.T. AMBALA 3. THE CIT(A), PANCHKULA 4. THE LD. CIT, PANCHKULA 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH