BABITA BALUMAL DHINGREJA, MUMBAI V. ITO 19(1)(3), MUMBAI

ITA 2434/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93017 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 10-04-2014
• Court: TRIBUNAL
• Department Lawyers: MRS N V NADKARNI
• Assessee Lawyers: ASHOK D DHINGREJA S BROTHER

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO. 2434/M/2014 ( AY: 2009 - 2010 ) BABITA BALUMAL DHINGREJA, 5, DAN KUTIR, 12 TH ROAD, KHAR, MUMBAI 400 052. / VS. THE INCOME TAX OFFICER, WARD 19(1)(3), MUMBAI. ./ PAN : AADPD8610Q ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MR. ASHOK D. DHINGREJA (ASSESSEES BROTHER) / RESPONDENT BY : MRS. N.V. NADKARNI / DATE OF HEARING : 23.6.2015 / DATE OF PRONOUNCEMENT :23.6.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 10.4.2014 IS AGAINST THE ORDER OF THE CIT (A) - 30, MUMBAI DATED 5.2.2014 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, ASSESSEE RAISED THE ISSUE RELATING TO THE AD - HOC DISALLOWANCES OF RS. 4,99,193/ - APPLYING THE FLAT RATE OF 30% OF RS. 14,97,578/ - . T HE SE EXPENSES WERE CLAIMED BY THE ASSESSEE UNDER VARIOUS HEADS NAMELY; WAGES, CONVEYANCE, ELECTRICITY CHARGES PRINTING & STATIONERY, REPAIRS & MAINTENANCE, SALARY, TELEPHONE CHARGES AND TRAVELLING EXPENSES. IN THE ASSESSMENT, AO OBSERVED VIDE PARA 4 OF HIS ORDER THAT A SSESSEE FAILED TO FURNISH THE RELEVANT BILLS AND VOUCHERS FOR VERIFICATION. HE DID NOT APPRECIATED THE FACT THAT MOST OF THE EXPENSES WERE INCURRED THROUGH BANKING CHANNELS AND , HOWEVER, PROCEEDED TO MAKE THE AFORESAID DISALLOWANCES. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. ON APPEAL, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) PASSED A NON - SPEAKING ORDER RESTRICTING THE DISALLOWANCE TO 20% OF THE SAID AMOUNT OF RS. 2 14,97,578/ - . PARA 2.5 OF T HE IMPUGNED ORDER IS RELEVANT IN THIS REGARD. AGAIN AGGRIEVED AND NOT SATISFIED WITH THE SAID ORDER OF THE CIT (A), ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 3. DURING THE PROCEEDINGS BEFORE THE TRIBUNAL, ASSESSEE SOUGHT ADJOURNMENT OF THE HEARING ON THE GROUND OF APPOINTING AN ADVOCATE FOR PLEADING HIS CASE. BEFORE US, MR. ASHOK B DHI NGREJA, ASSESSEES BROTHER APPEARED AND , HOWEVER, MENTIONED THAT THE ADDITION MADE BY THE AO ON AD - HOC BASIS I.E., 30% OF RS. 14,97,578/ - IS A COMPLETELY ARBI TRARY ADDITION. HE FURTHER MENTIONED THAT THE CIT (A) RESTRICTED THE DISALLOWANCE TO 20% OF THE AFORESAID EXPENDITURE. CONSIDERING THE SMALLNESS OF THE DISALLOWANCE AS WELL AS THE AD - HOCISM ADOPTED BY THE REVENUE AUTHORITIES, I FIND THAT THE ADJOURNMENT S HOULD BE REJECTED AND THE APPEAL SHOULD BE ADJUDICATED WITH THE ASSISTANCE OF THE ASSESSEES BROTHER BY ONE SIDE AND THE LD DR FOR THE REVENUE ON THE OTHER. 4. BEFORE ME, MR. ASHOK B DHINGREJA, ASSESSEES BROTHER SUBMITTED THAT MOST OF THE EXPENDITURE ARE INCURRED BY WAY OF CHEQUE S AND SUCH EXPENDITURE INCLUDE WAGES, ELECTRICITY CHARGES PAID TO RELIANCE ENERGY; MAINTENANCE CHARGES PAID TO THE SOCIETY; SALARY PAID TO THE EMPLOYEES; TELEPHONE BILLS PAID TO MTNL; TRAVELLING EXPENSES PAID TO THE TRAVEL AGENT. OTHERWISE, THE EXPENSES OF CONVEYANCE, PRINTING & STATIONARY AND PARTLY TRAVELLING EXPENSES WERE INCURRED IN CASH. GROSS EXPENDITURE OF THE CASH EXPENSES WILL NOT EXCEED SUM OF RS. 1 LAKH. HE FAIRLY MENTIONED THAT THE DISALLOWANCE MADE BY THE REVENUE AUT HORITIES IS ON HIGHER SIDE AND THEREFORE, CONSIDERING THE NATURE OF THE EXPENSES, A PART OF THIS EXPENDITURE MAY BE DISALLOWED. 5. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE AO AND THE CIT (A). 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED ON TO THE RECORD. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES, I AM OF THE OPINION THAT IT IS NO T THE CASE OF THE REVENUE THAT THEY HAVE ANY INCRIMINATING EVIDENCE AGAINST THE CLAIM OF THE ASSESSEE. IT IS MERELY A CASE OF SUSPICION AND AD - HOCISM THAT LED TO THE ADDITION OF RS. 4,99,193/ - BY THE AO. THE CIT (A) ALSO NEVER 3 BROUGHT ANY COMPARABLE CASE S FOR RESTRICTING THE DISALLOWANCE TO 20%. CONSIDERING THE FACTUAL MATRIX OF THIS CASE, IN MY OPINION, SOME ROUND SUM DISALLOWANCE AMOUNTING TO RS. 25,000/ - SHOULD MEET THE E NDS OF JUSTICE. ACCORDINGLY, ASSESSEE GETS PART RELIEF. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JUNE, 2015. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 23.6 .201 5 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT - 4. / 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI