SHREEJI AGENCIES, MUMBAI V. ACIT 23 (3), MUMBAI

ITA 2524/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5840 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 23-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2524 / / 2019 (%. .2013-14 ) ITA NO. 2524/MUM/2019 (A.Y.2013-14) M/S.SHREEJI AGENCIES, FLAT NO.61, SUMAN, BLD.NO.25, K.C.MARG, BANDRA RECLAMATION, BANDRA(W), MUMBAI 400050 PAN:ABOFS8418B / VS. : / APPELLANT THE ACIT 23(3), ROOM NO.104,1 ST FLOOR, MATRU MANDIR, TARDEO ROAD, MUMBAI 400 007 : / RESPONDENT ASSESSEE BY : SHRI JITENDRA SINGH REVENUE BY : SHRI AJAY PRATAP SINGH / DATE OF HEARING : 15/10/2020 / DATE OF PRONOUNCEMENT : 11/01/2021 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-34, MUMBAI ( IN SHORT THE CIT (A)) DATED 17/01/2019 FOR THE ASSESSMENT YEAR 2013-14. 2. SHRI JITENDRA SINGH, APPEARING ON BEHALF OF TH E ASSESSEE SUBMITTED THAT THE ASSESSEE IS A DISTRIBUTOR OF HINDUSTAN UNILEVER LT D. THE ASSESSEE HAD CLAIMED CERTAIN BUSINESS EXPENDITURE VIZ: 2 ITA NO. 2524/MUM/2019 (A.Y.2013-14) (I) TELEPHONE EXPENSES - R S. 1,06,346/- (II) SALES PROMOTIONS EXPENSES - RS. 27,74,861 /- (III)PACKING MATERIAL EXPENSES - RS. 30,2 49/- (IV)REPAIRS AND MAINTENANCE - RS. 11,65,601/- THE ASSESSING OFFICER MADE ADHOC DISALLOWANCE OF 10 % OF THE ABOVE EXPENSES ON THE GROUND THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE EXPENSES. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE CIT(A). THE CIT(A) REJECTED THE SUBMISSIONS OF ASSESSEE AND CONFIRMED THE ADDITION IN FULL. THE L D.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT THE BOOKS OF ACCOUNTS WERE NOT REJECTED BY THE ASSESSING OFFICER. THE ASSESSEE HAS PRODUCED ALL RELEVANT MA TERIAL TO PROVE THE GENUINENESS OF THE PURCHASES. HOWEVER, ASSESSING OFFICER AND CIT( A) RAISED DOUBT OVER THE VOUCHERS FURNISHED BY THE ASSESSEE. THE LD.AUTHORI ZED REPRESENTATIVE OF THE ASSESSEE PRAYED FOR DELETING THE ADHOC DISALLOWANCE . 3. SHRI AJAY PRATAP SINGH, REPRESENTING THE DEPART MENT SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER AS KED THE ASSESSEE TO PRODUCE SUPPORTING DOCUMENTS TO SUBSTANTIATE THE GENUINENES S OF THE PURCHASE CLAIM. THE ASSESSEE PRODUCED SELF MADE VOUCHERS. THE EVIDENCE PRODUCED BY THE ASSESSEE WAS SELF CREATED, HENCE, THE SAME WAS REJECTED BY THE A SSESSING OFFICER AND THE CIT(A). THE LD.DEPARTMENTAL REPRESENTATIVE PRAYED FOR DISMI SSING THE APPEAL OF ASSESSEE. 4. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE ONLY DISPUTE IN THE PRESENT APPEAL IS AGAINST ADHOC DISALLOWANCE OF EXPENDITURE RS.4,07,706/-. UNDISPUTEDLY, DURING THE ASSESSMENT PROCEEDINGS, TH E ASSESSEE PRODUCED SELF MADE VOUCHERS IN RESPECT OF SOME EXPENDITURE. THE ASSE SSING OFFICER AND THE CIT(A) DISBELIEVED THE VOUCHERS PRODUCED BY THE ASSESSEE B Y HOLDING THEM TO BE SELF SERVING EVIDENCE. TAKING INTO CONSIDERATION ENTI RE FACTS I AM OF CONSIDERED VIEW THAT ESTIMATION OF ADHOC DISALLOWANCE BY LOWER AUT HORITIES IS ON HIGHER SIDE. AT THE SAME TIME SOME DISALLOWANCE IS WARRANTED AS THE ASS ESSEE FAILED TO PRODUCE COGENT 3 ITA NO. 2524/MUM/2019 (A.Y.2013-14) EVIDENCE TO BACK ENTIRE EXPENDITURE. THE ENDS OF JU STICE WOULD BE MET IF ADHOC DISALLOWANCE IS RESTRICTED TO 5%. 5. IN THE RESULT, APPEAL BY ASSESSEE IS PARTLY AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, T HE 11 TH DAY OF JANUARY, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 11/01/2021 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *+ / THE RESPONDENT. 3. ,+ ( )/ THE CIT(A)- 4. ,+ CIT 5. -.*+% , . . . , / DR, ITAT, MUMBAI 6. ./012 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI