RAMESH B. BUSWAL, MUMBAI V. ITO 19(3)(2), MUMBAI

ITA 2623/MUM/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3541 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 07-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAV
• Keywords: Presumptive income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO. 2623/MUM/2015 (ASSESSMENT YEAR : 2011-12) SHRI RAMESH B. BUSWAL, PLOT NO.3, KHERWADI FIRST ROAD, KHERWADI, BANDRA (E), MUMBAI 400 051 PAN: AAAPB9537H ... APPELLANT VS. THE INCOME TAX OFFICER , RANGE-19(3)(2), MUMBAI. .... RESPONDENT APPELLANT BY : SHRI VIMAL PUNMIYA RESPONDENT BY : SHRI VISHWAS JADHAV DATE OF HEARING : 10/12/2015 DATE OF PRONOUNCEMENT : 29/02/2016 ORDER THE CAPTIONED APPEAL IS PREFERRED BY THE ASSESSEE AND IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 27/02/2015 OF CIT(A)-32, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2011-12, WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER DATED 09/01/2014 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT). 2. IN THIS APPEAL, THE ONLY GRIEVANCE OF THE ASSES SEE IS THAT THE LOWER AUTHORITIES HAVE ERRED IN SUSTAINING ADHOC DISALLO WANCE OF 10% OF TOTAL 2 ITA NO. 2623/MUM/2015 (ASSESSMENT YEAR : 2011-12) EXPENDITURE INCURRED TOWARDS CASUAL LABOUR AND OTHE R EXPENSES BEING TELEPHONE CHARGES, BUSINESS PROMOTION EXPENSES, LAB OUR WELFARE EXPENSES, MISCELLANEOUS EXPENSES AND TRAVELLING EXP ENSES. 3. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE FOR THE ASSESSEE EXPLAINED THAT THE ASSESSEE IS AN INDIVIDUAL, WHO I S CARRYING ON THE BUSINESS OF WORK CONTRACTOR AND INTERIOR DECORATOR. THE LOWER AUTHORITIES DISALLOWED RS.1,13,585/-, OUT OF TOTAL CASUAL LABOUR EXPENDITURE OF RS.11,35,850/- IN AN ADHOC MANNER. SIMILARLY, ADHOC DISALLOWANCE @10% OF TOTAL EXPENDITURE ON VARIOUS E XPENSES WAS MADE FOR RS.18,922/-. THE ONLY PLEA RAISED BY THE ASSES SEE IS THAT THE ACCOUNTS WERE AUDITED AND NO SPECIFIC INSTANCE HAS BEEN BROUGHT BY THE LOWER AUTHORITIES TO SAY THAT ANY PARTICULAR EXPEND ITURE WAS UNVOUCHED OR WAS INCURRED FOR NON BUSINESS PURPOSES. IN THIS CONTEXT, IT WAS ALSO POINTED OUT THAT THE PROFIT RATE SHOWN BY THE ASSES SEE IS 11.32%, WHICH IS OTHERWISE ALSO REASONABLE CONSIDERING EVEN THE PRESUMPTIVE TAXATION PROFIT RATE OF 8%, IS CONSIDERED ADEQUA TE. 4. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE FOR THE REVENUE SUBMITTED THAT PAYMENTS WERE MADE TO CASUAL LABOURS AND, THEREFORE, IN THE ABSENCE OF PROPER RECORDS, 10% OF EXPENSES WERE RIGHTFULLY DISALLOWED. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. OSTENS IBLY, THE ENTIRE ADDITION IS BASED ON THE PERCEPTION OF THE ASSESSIN G OFFICER THAT CERTAIN 3 ITA NO. 2623/MUM/2015 (ASSESSMENT YEAR : 2011-12) EXPENSES MUST HAVE BEEN INCURRED BY THE ASSESSEE FO R PERSONAL AND/OR FOR NON BUSINESS PURPOSES. HOWEVER, THE RELEVANT D ISCUSSION IN THE ASSESSMENT ORDER DOES NOT SHOW ANY SPECIFIC INSTANC E OF SUCH NATURE BEING BROUGHT OUT BY THE ASSESSING OFFICER IN SPITE OF THE FACT THAT ASSESSEE HAD FILED HIS RETURN OF INCOME BASED ON AU DITED FINANCIAL STATEMENTS, WHICH WERE VERY MUCH AVAILABLE WITH THE ASSESSING OFFICER. THEREFORE, SUCH ADHOC DISALLOWANCE IN MY VIEW DOES NOT MERIT ANY SUSTENANCE. ACCORDINGLY, I SET ASIDE THE ORDER OF THE CIT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.1,13,585/- OUT OF CASUAL LABOUR EXPENSES AND RS.18,922/- OUT OF OT HER EXPENSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 29/02/2016. SD/- (G.S. PANNU) ACCOUN TANT MEMBER MUMBAI, DATED 29/02/2016 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI