L. Rajasekhar, Visakhapatnam V. The ACIT, Visakhapatnam

ITA 245/VIZ/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3892 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 28-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SRINIVASA RAO
• Keywords: Set aside
• Section: 143(3)

Judgement Text

ITA NO.245 /VIZAG/2017 L. RAJASEKHAR, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . .. . . . . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.245/VIZAG/2017 ( / ASSESSMENT YEAR: 2010-11) L. RAJASEKHAR VISAKHAPATNAM (PAN NO.ABAPL5110F) ACIT, CIRCLE - 4(1) VISAKHAPATNAM ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI C. SUBRAHMANYAM, AR / RESPONDENT BY : SHRI V. SRINIVASA RAO, DR / DATE OF HEARING : 13.03.2018 / DATE OF PRONOUNCEMENT : 0 6.04.2018 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF THE CIT(A)-1, GUNTUR VIDE ITA NO.0111/2012-13/CIT(A-1)/ GNT DATED 24.10.2016 FOR THE ASSESSMENT YEAR 2010-11. 2. THERE IS A DELAY OF 17 DAYS IN FILING THE APPEAL . THE ASSESSEE HAS FILED AN AFFIDAVIT, WHEREIN HE EXPLAINED REASONS FO R NON-FILING OF THE ITA NO.245 /VIZAG/2017 L. RAJASEKHAR, VISAKHAPATNAM 2 APPEAL IN TIME. WE FIND THAT THERE IS A SUFFICIENT CAUSE FOR THE ASSESSEE FOR NOT FILING THE APPEAL IN TIME, THEREFORE, THE D ELAY HAS TO BE CONDONED, ACCORDINGLY DELAY OF 17 DAYS IS CONDONED. 3. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIV IDUAL DERIVING INCOME FROM BUSINESS OR PROFESSION OF ENGINEERING CONSULTA NCY FILED RETURN OF INCOME BY DECLARING TOTAL INCOME OF ` 17,18,290/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT O RDER IS PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CAL LED AS 'THE ACT'). IN THE ASSESSMENT ORDER, THE A.O. HAS OBSERVED THAT TH E ASSESSEE HAS SHOWN GROSS CONSULTANCY RECEIPTS OF ` 36 LAKHS FROM MARG LTD. AND CLAIMED EXPENDITURE OF 505 OF THE SAME TOWARDS TRAV ELLING CHARGES, LOCAL CONVEYANCE, SALARIES TO STAFF, TELEPHONE BILLS, ETC . THE A.O. HAS ASKED THE ASSESSEE TO PRODUCE THE DETAILS OF THE EXPENDIT URE. IN RESPONSE TO THAT, THE ASSESSEE HAS FILED SOME DETAILS AND VOUCH ERS FOR VERIFICATION. ON VERIFICATION IT IS FOUND THAT MOST OF THE VOUCHE RS ARE SELF MADE AND NOT SUPPORTED WITH ANY PROPER EVIDENCE AND THE EXPE NDITURE IS ALSO PERSONAL IN NATURE. ACCORDINGLY, THE A.O. HAS ALLO WED 1 4. ON APPEAL, THE CIT(A) CONFIRMED THE ORDER OF THE A.O. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE A.O. HAS ONLY ALLOWED 10% OF THE EXPENDITURE. IT IS HIGHLY ARBIT RARY AND ITA NO.245 /VIZAG/2017 L. RAJASEKHAR, VISAKHAPATNAM 3 DISPROPORTIONATE AND THEREFORE, PRAYED THAT 50% OF THE EXPENDITURE CLAIMED BY THE ASSESSEE MAY BE ALLOWED. 5. THE LD. D.R. STRONGLY SUPPORTED THE ORDERS PASSE D BY THE LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE IS A RETIRED EMPLOYEE AND CARRYING ENGINEE RING CONSULTANCY SERVICE. HE HAS NOT MAINTAINED ANY BOOKS OF ACCOUN TS, NO BILLS AND VOUCHERS. THE ASSESSEE HAS RECEIVED A GROSS RECEIP T OF ` 36 LAKHS, OUT OF WHICH 50% IS CLAIMED AS EXPENDITURE. THE ASSESS EE IS NOT ABLE TO SUBSTANTIATE THE EXPENDITURE BEFORE THE AUTHORITIES BELOW. THEREFORE, THE A.O. HAS ALLOWED ONLY 10% OF THE EXPENDITURE AN D ACCORDINGLY ASSESSMENT IS COMPLETED. WE FIND THAT THE A.O. ALLO WED ONLY EXPENDITURE OF 10% IS HIGHLY ARBITRARY AND IS VERY LOWER SIDE. IT IS DIFFICULT TO EARN AN AMOUNT OF ` 36 LAKHS WITH A MINIMUM EXPENDITURE OF 10%. THEREFORE, KEEPING IN VIEW OF THE FACTS AND C IRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE ASSESSEE MUST HAVE INCURRED 40% OF THE EXPENDITURE TO EARN INCOME OF ` 36 LAKHS. THEREFORE, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND DIRECT THE A.O. TO ALLOW ITA NO.245 /VIZAG/2017 L. RAJASEKHAR, VISAKHAPATNAM 4 40% OF THE EXPENDITURE CLAIMED BY THE ASSESSEE OUT OF GROSS RECEIPTS OF ` 36 LAKHS. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 6 TH APR18. SD/- SD/- ( . .. . . . . . ' ) ( . ) (D.S. SUNDER SINGH) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER # /VISAKHAPATNAM: ' /DATED : 06.04.2018 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SHRI L. RAJA SEKHAR, FLAT NO.201 , SHARON GARDENS APARTMENTS, FIRST LANE, NARSINGNAGAR, VISAKHAPATNAM 2. / THE RESPONDENT THE ACIT, CIRCLE-4(1), VISAKHAP ATNAM 3. + / THE PRINCIPAL CIT-2, VIJAYAWADA 4. + ( ) / THE CIT (A)-1, GUNTUR 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM