AJAY VISHVANATH PATODIA, SURAT V. INCOME TAX OFFICER, WARD 1(2)(1)/SRT

ITA 244/SRT/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2328 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 28-03-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 20-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: KISHORE R. GHEEWALA
• Keywords: Depreciation; Corroborative evidences
• Section: 143(3); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A.L.SAINI, AM आयकरअपीलसं./ITA No.244/SRT/2021 (िनधाŊरणवषŊ / Assessment Year: (2014-15) (Virtual Court Hearing) Ajay Vishvanath Patodia E/1229-30, Millennium Textile Market, Ring Road, Surat-395002 Vs. Income Tax Officer, Ward No.1(2)(1), Majura Gate, Surat-395002 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.: ABJPP 3064 F (Appellant ) (Respondent) Assessee by : Shri Kishore R. Gheewala, C.A Respondent by : Ms. Anupama Singla, SR-DR सुनवाई की तारीख/ Date of Hearing : 29/03/2022 घोषणा की तारीख/Date of Pronouncement : 31/03/2022 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee, pertaining to assessment year 2014- 15, is directed against the order passed by the Learned National Faceless Appeal Centre [NFAC for short)/CIT(A)], dated 29.10.2021, which in turn arises out of an order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’), dated 23.11.2016. 2. The grounds of appeal raised by the assessee are as follows:- “1. The learned CIT(A), NFAC, Delhi has grossly erred in holding that interest expenses of Rs.3,70,854/- disallowed u/s 40(a)(ia) in A.Y 2014-15 shall be allowed in A.Y 2017-18 on account of submission of Form No. 26A on 18/12/2016. 2. The learned CIT(A), NFAC, Delhi, has also grossly erred in confirming the disallowance of 20% of shop expenses, staff welfare exps, telephone & mobile exps., vehicle exps. and depreciation on car on account of so called non- submission of supporting evidences.” Page | 2 ITA No.244/SRT/2021 A.Y. 14-15 Ajay V. Patodia. 3. Now we shall take up ground No.1 raised by the assessee. At the outset, Ld. Authorized Representative (AR) for the assessee submits before the Bench Form- 26A of Deepti Khandelia, Pawan Khandelia, Ratanlal Khandelia (HUF) and Ansuya Kandelia. The Ld. AR contended that these payees have included the interest income in their respective return of income, therefore, no disallowance is warranted. 4. On the other hand, Ld. Senior Departmental Representative (Sr.DR) for the Revenue submits that since the assessee has submitted the Form-26A for the first time before the Tribunal, therefore this issue should be remitted back to the file of the Assessing Officer to examine, whether payees have included the interest income in their respective return of income and paid taxes thereon. 5. We have heard both the parties and perused the materials available on record. We note that assessee has submitted Form-26A in respect of all the payees for the first time before Tribunal and Assessing Officer did not get opportunity to examine these Form-26A, and also not examined whether payee has included interest income in their return of income and offered for taxes. We are of the view that matter may be remitted back to the file of the Assessing Officer to examine Form No.26A and return of income of payees. We direct the Assessing Officer to examine Form-26A and return of income of payees to ascertain the fact whether these payees have included in their respective return of income the interest income and offered for taxes or not. If these payees had included interest income in their respective return of income and offered for taxes, then in that situation Assessing Officer should delete the addition. Therefore, this ground of assessee’s appeal is allowed for statistical purposes in above terms. 6. Ground No.2 raised by assessee relates to ad hoc disallowance of shop expenses, staff welfare expenses, telephone & mobile expenses and vehicle expenses. Page | 3 ITA No.244/SRT/2021 A.Y. 14-15 Ajay V. Patodia. 7. The Ld. Counsel submits that since the assessment order was framed u/s 143(3) of the Act and therefore ad hoc disallowance should not be made. 8. On the other hand, Ld. Sr.DR for the Revenue submits that assessee made the payment in cash by preparing self-made vouchers, therefore element of personal use is involved in these expenses and hence the Assessing Officer has rightly disallowed @ 20% of these expenses. 9. We have heard both the parties and perused the materials available on record. We note that during the course of assessment proceedings, assessee was asked to furnish the details of the respective expenses alongwith supporting proof and evidences. On verification of the details such as bills / vouchers produced, it was noticed that no complete record has been maintained by the assessee with regard to the above mentioned expenses. We note that the payments have been made in cash on self-made vouchers and element of personal use involved in the above expenses cannot be ruled out. We note that assessee has not maintained any long book / call register in respect of vehicle and telephone. In absence of complete details and supporting evidences with regard to the quantum and nature of claim it cannot be ascertained as to whether these expenses in totality have been incurred wholly and exclusively for the business purposes. Therefore, for want of proper check over the aforesaid expenses, 20% of such expenses which comes to Rs.93,121/- was disallowed by AO. We note that assessee had also claimed depreciation on car to the extent of Rs.65,740/- and since personal use involved in car expenses, therefore 20% of such expenses has been disallowed. We find that a corresponding disallowance out of depreciation claimed on motor car which comes to Rs.13,148/- was disallowed and added to the total income of assessee. Thus, expenses disallowed by AO relate to personal use. Therefore, we do not find any infirmity in the order of Ld. CIT(A), hence we dismiss the ground raised by the assessee. Page | 4 ITA No.244/SRT/2021 A.Y. 14-15 Ajay V. Patodia. 10. In the result, the appeal of the assessee is partly allowed for statistical purposes in above terms. Order pronounced in the open court on 31/03/2022 by placing the result on the Notice Board. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat/िदनांक/ Date: 31/03/2022 Dkp Outsourcing Sr.P.S. Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat