S.Jayaram , Bangalore V. Deputy Commissioner of Income Tax Central Circle-2(3), Bangalore

ITA 2560/BANG/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8577 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-01-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 30-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Keywords: TDS
• Section: 201

Judgement Text

ITA NO.2560 (B)/201 7 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES : A , BANGALORE BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SMT.BEENA PILLAI, JUDIC I AL MEMBER ITA NO. 2560 (BANG)/201 7 (ASSESSMENT YEAR : 201 4 - 15 ) SHRI S.JAYARAM, NO.10/1, SAPTADRI LAYOUT, 4 TH PHASE, TUBARAHALLI, 4 TH PHASE, RAMAGONDANAHALLI POST, VARTHUR HOBLI, BANGALORE - 560 066 PANNO.A D C PJ9047M APPELLANT VS THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRLE - 2 ( 3) , C R BUILDINGS, QUEENS ROAD, BANGALORE RESPONDENT APPELLANT BY : S HRI P R A NAV KRISHNA, A DVOCATE REV ENUE BY : SHRI MANJEET SINGH, ADDL. CIT DATE OF HEARING : 1 4 - 0 1 - 20 20 DATE OF PRONOUNCEMENT : O R D E R PER SHRI B.R.BASKARAN, ACCOUNTANT MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECT E D AGAINST THE ORDER DATED 26 - 09 - 2007 PASSED BY THE LD.CIT(A) - 11, BANGALORE AND IT RELATES TO ASSESSMENT YEAR 2014 - 15 . 2. THE GROUND URGED BY THE ASSESSEE RELATE TO A SINGLE ISSUE RELATING TO DISALLOWANCE OF EXPENSES TO THE TUNE OF RS. 23,65,445/ - . ITA NO.2560 (B)/201 7 2 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. 4. THE ASSESSEE DE CLARED COMMISSION INCOME ON LIAISON WORK FOR LAND ACQUISITION. THE ASSESSEE DECLARED A SUM OF RS.1,26,56,944/ - AS COMMISSION RECEIVED FROM M/S SRIRAM PROPERTIES . THE AO NOTICED THAT THE ASSESSEE OFFERED AN INCOME OF RS. 28.77 LAKHS ONLY OUT OF THE ABOVE SAID COMMISSION INCOME. WHEN E X A MINED THE EXPENSES CLAIMED BY THE ASSESSEE AGAINST THE ABOVE SAID COMMISSION INCOME , THE AO NOTICED TH A T A SUM OF RS.64.00 LAKHS WAS PAID THROUGH CHEQUE TO SHRI B.C.REDDEPPA AND B.C. C H E NAPPA. THE AO ALLOWED THE SAME. THE BALANCE AMOUNT OF EXPENSES OF RS.33.79 LAKHS WAS CLAIMED TO BE VARIOUS EXPENSES INCURRED BY THE ASSESSEE FROM TIME TO TIME IN CASH TOWARDS LAND DEVELOPMENTS. THE AO NOTICED THAT THE ASSESSEE HAS NOT MAINTAINED BOOK S O F ACCOUNTS AND FURTHER THE ASSESSEE ALSO DID NOT FURNISH ANY VOUCHER AND CONF IRMATION WITH REGARD TO THE ABOVE SAID BALANCE AMOUNT OF EXPENDITURE OF RS.33.79 LAKHS. HENCE THE AO TOOK THE VIEW THAT THE ENTIRE EXPENSES COULD NOT BE ALLOWED. ACCORDINGLY, THE AO RESTRICTED THE DEDUCTION TO 30% OF THE ABOVE SAID EXPENDITURE AND DISALL OWED 70% OF THE EXPENSES AMOUNTING TO RS.23,65,445/ - . THE LD.CI T (A) ALSO CONFIRMED THE SAME. 5. THE LD. AR SUBMITTED THAT THE NET INCOME DECLARED BY THE ASSESSEE . OUT OF COMMISSION INCOME , WORKS OUT TO 22.74% WHICH IS REASONABLE. HE SUBMITTED THAT THE AO ALLOWED EXPENSES ALLOWED BY WAY OF CHEQUE AMOUNTING TO RS.64.00 LAKHS. THE AO HAS RESTRICTED THE EXPENSE S CLAIMED BY THE ASSESS E E ONLY 30% OF THE CLA I M WHICH ITA NO.2560 (B)/201 7 3 IS UNJUSTIFIED. ACCORDINGLY, THE LD.AR SUBMITTED THAT THE DISALLOWANCE MADE BY THE AO AND CONFIRMED BY TH E LD.CIT(A) ARE ON TH E HIGHER SIDE. 6. ON THE CONTRARY, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS FAILED IN ITS RESPONSIBILITY TO PROVE THE EXPENDITURE CLAIMED , I.E., THE ASSESSEE DID NOT FURNISH VOUCHERS AND CONFIRMATIONS IN SUPPORT OF EXPENDITURE CLAIM . HENCE T HE AO HAS DISALLOWED 70% OF THE EXPENDITURE C LAIMED AND THE SAME WAS ALSO CONFIRMED BY LD CIT(A) . ACCO R DINGLY, H E SUBMITTED THAT THE ORDER PASSED BY THE LD.CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. 7. IT IS AN ADMITTED POSI TION THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS O F E XPENSES AND ALSO VOUCHERS RELATING TO THE EXPENSES CLAIM OF RS.33,79,207/ - . FURTHER THESE EXPENSES HAVE BEEN CLAIMED TO HAVE BEEN INCURRED BY WAY OF CASH. THERE SHOULD NOT BE ANY DISPUTE THAT THE RESPONSIBILITY TO PROVE THE EXPENDITURE CL A IMED BY THE ASSESSEE IS PLACED UPON THE ASSESSEE . WHEN THE EXPENDITURE IS INCURRED BY WAY OF CASH, THE SAME IS NOT SUSCEPTIBLE TO CROSS VERIFICATION . HENCE, THE AO DISALLOWED 70% OF IMPUGNED EXPENDITURE CLA IM E D BY THE A S SESSEE. AT THE S AME TIME, IT CANNOT BE ALSO PRESUMED TH A T THE ASSES S EE WOULD NOT HAVE INCURRED EXPENDITURE AT ALL IN HI S LIAISON WORK S . THE ASSESSEE HAS STATED THAT HE HAS INCURRED CERTAIN EXPENSES ON LAND DEVELOPMENTS ALSO, WHICH WAS NOT DISPUTED BY THE AO. ACCORDINGLY, WE ARE OF THE VIEW T HAT THE DISALLOWANCE OF 70% OF THE EXPENDITURE IS ON THE HIGHER SIDE . ACCORDINGLY, ON THE CONSPEC TUS OF THE MATTER , WE ARE OF THE VIEW THAT THE DISALLOWANCE M A Y BE RESTRICTED TO 50% OF THE ITA NO.2560 (B)/201 7 4 EXPENDITURE INCURRED BY THE AS SESSEE BY WAY OF C A SH AND THE SAME WILL PUT THIS DISPUTE AT REST . ACCORDINGLY, WE MODIFY THE ORDER PASSED BY THE LD.CIT(A) ON THIS ISS UE AND DIRECT THE AO TO RESTRICT THE DISALLOWANCE TO 50% OF IMPUGNED EXPENSES, AS AGAINST 70% MADE BY HIM. WE ORDER ACCORDINGLY. 8. IN THE RESULT, THE APPE A L FILED BY THE AS S ESS E E IS PA R TLY ALLOWED. ORDER PRONOUNCED (BEENA PILLAI) (B.R.BASKARAN) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED: *AM COPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5. DR 6. ITO (TDS) 7.GUARD FILE BY ORDER ASST.REGISTRAR