Shri.B.L.Thimmegowda, Bangalore V. Income Tax Officer, Bangalore

ITA 209/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5289 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 31-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S SRIKANT
• Assessee Lawyers: H L SOUMYA ACHAR
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH - SMC C BEFORE SHRI VIJAY PAL RAO , JUDICIAL MEMBER I.T.A. NO. 209 /BANG/201 7 (ASSESSMENT YEAR : 20 12 - 13 ) SHRI B.L. THIMMEGOWDA, NO.8/13, 1 ST MAIN, 2 ND CROSS, 1 ST STAGE, KHB COLONY, BANGALORE - 560 0 79 PAN AHNPB 3345D VS. INCOME TAX OFFICER, WARD 6(2)(3), BANGALORE. APPELLANT RESPONDENT. APPELLANT BY : SHRI H . L. SOUMYA ACHAR, ADDL. CIT (D.R) RESPONDENT BY : SHRI S. SRIKANT, CA DATE OF H EARING : 12.04.2017. DATE OF P RONOUNCEMENT : 31 .05 . 201 7 . O R D E R PER SHRI VIJAY P AL RAO, J. M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DT.23.11.2015 OF COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2012 - 13. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 2 ITA NO. 209 /BANG/ 2017 3. THE ONLY ISSUE ARISES IN THIS APPEAL OF THE ASSESSEE IS REGARDING DISALLOWANCE MADE BY THE ASSESSING OFF ICER AND CONFIRMED BY THE CIT (APPEALS) ON ACCOUNT OF EXPENDITURE INCURRED IN RESPECT OF THE BROKERAGE AND COMMISSION BUSINESS. THE ASSESSEE IS AN INDIVIDUAL AND DOING BUSINESS OF BROKERAGE AND COMMISSION. THE ASSESSEE DECLARED GROSS REVENUE FROM SUCH ACT IVITY OF RS.13,15,000 AND ALSO CLAIMED AN EXPENDITURE OF RS.10,61,750. THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT EX - PARTE DISALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 57 OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). ON APPEAL, THE ASSE SSEE CLAIMED THAT THE ASSESSEE IS IN THE BUSINESS OF BROKERAGE AND COMMISSION 3 ITA NO. 209 /BANG/ 2017 THEREFORE , THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 57 IS NOT JUSTIFIED. THE CIT (APPEALS) THOUGH ACCEPTED THAT THE ASSESSEE DERIVING INCOME FROM BROKERAGE AND COMMISSION HOWEVER IT WAS FOUND THAT THE CLAIM OF EXPENDITURE OF RS.10,61,750 AGAINST THE TOTAL RECEIPTS OF RS.13,50,000 TOWARDS TRAVELLING AND CONVEYANCE, OFFICE EXPENSES ETC IS HIGHLY EXCESSIVE. ACCORDINGLY, THE CIT (APPEALS) HAS ESTIMATED THE ALL OWABLE EXPENSES AT RS.1,20,000. THUS THE CIT (APPEALS) HAS SUSTAINED THE ADDITION TO THE EXTENT OF RS.9,41,750. 4. BEFORE THE TRIBUNAL, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED THAT THE CIT (APPEALS) HAS ESTIMATED THE EXPEND ITURE WITHOUT GIVING ANY BASIS AND THEREFORE MADE AN ADHOC DISALLOWANCE OF RS.9,41,750. HE HAS FURTHER CONTENDED THAT ONCE THE CIT (APPEALS) HAS ACCEPTED THAT THE EXPENDITURE IS REGARDING BUSINESS ACTIVITY THEN THE CLAIM OF EXPENDITURE IN QUESTION CANNOT BE DISALLOWED AS THE ASSESSEE HAS OFFERED THE INCOME AT 21% OF THE GROSS RECEIPTS. THUS THE LEARNED AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT THE NEITHER THE ASSESSING OFFICER NOR THE CIT (APPEALS) HAS GIVEN OPPORTUNITY TO THE ASSESSEE TO FURNISH THE EVIDENCE AND SUBSTANTIATE THE CLAIM OF THE ASSESSEE. HE HAS PLEADED THAT THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY FOR FILING THE RELEVANT EVIDENCE IN SUPPORT OF THE CLAIM OF 4 ITA NO. 209 /BANG/ 2017 EXPENSES AND THEREFORE THE MATTER MAY BE REMITTED TO THE RECORD OF THE ASS ESSING OFFICER. 5. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS FORCEFULLY CONTENDED THAT THE ASSESSEE DID NOT FILE ANY EVIDENCE IN SUPPORT OF THE CLAIM OF EXPENDITURE BEFORE THE ASSESSING OFFICER. FURTHER THOUGH THE ASSESSEE CHALLE NGED THE ACTION OF THE ASSESSING OFFICER BEFORE THE CIT (APPEALS) BUT AGAIN HAS NOT FURNISHED ANY EVIDENCE TO SUBSTANTIATE THE EXPENSES INCURRED BY THE ASSESSEE IN CONNECTION WITH THE BUSINESS ACTIVITY. THUS DESPITE SUFFICIENT OPPORTUNITY GIVEN BY THE ASS ESSING OFFICER AS WELL AS BY THE CIT (APPEALS), THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE IN SUPPORT OF THE CLAIM. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD, IT IS NOTED THAT THE ASSESSEE HAS NOT FILE D ANY EVIDENCE TO SUBSTANTIATE THE CLAIM OF EXPENDITURE OF RS.10,61,750 IN RESPECT OF THE BROKERAGE AND COMMISSION RECEIPTS OF RS.13,50,000. THE CIT (APPEALS) OBSERVED THAT THE CLAIM OF THE ASSESSEE IS HIGHLY EXCESSIVE AND ESTIMATED THE EXPENDITURE OF ASS ESSEE AT RS.10,000 PER MONTH HOWEVER , THE CIT (APPEALS) HAS NOT DISCUSSED THE BASIS OF ESTIMATION OF EXPENSES AND HAS MADE AN ADHOC DISALLOWANCE AS WELL AS ALLOWANCE OF THE CLAIM OF THE EXPENDITURE. SINCE THE ASSESSEE HAS NOW PLEADED FOR ONE MORE OPPORTUN ITY TO FILE THE RELEVANT EVIDENCE IN SUPPORT OF THE CLAIM 5 ITA NO. 209 /BANG/ 2017 THEREFORE , IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE THE MATTER IS REMITTED TO THE RECORD OF THE ASSESSING OFFICER FOR VERIFICATION AND EXAMINATION OF THE EVIDENCE TO BE FILED BY THE ASSESSEE TO SUBSTANTIATE THE CLAIM OF EXPENDITURE . IN CASE THE ASSESSEE FAILED TO FILE THE EVIDENCE THEN THE DISALLOWANCE MADE BY THE CIT (APPEALS) WOULD SURVIVE AND SUSTAIN. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 31ST MAY, 201 7 . SD/ - (VIJAY PAL RAO) JUDICIAL MEMBER BANGALORE, DT. 31 .05 .2017. *REDDY GP COPY TO : 1 . APPELLANT 2 . RESPONDENT 3 . C.I.T. 4 . CIT(A) 5 . DR, ITAT, BANGALORE. 6 . GUA RD FILE. ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL BANGALORE.