ESS INFRAPROJECT P. LTD, MUMBAI V. DCIT 12(2)(1), MUMBAI

ITA 3216/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2903 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 14-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Additional evidence; Set aside
• Section: 143(3)

Judgement Text

ITA NO.3216/MUM/2019 ASSESSMENT YEAR: 2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE HONBLE SHRI SAKTIJIT DEY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.3216/MUM/2019 ( / ASSESSMENT YEAR:2013-14) ESS INFRAPROJECT P RIVATE LIMITED WILLIAM COMPOUND, MITHI CHOWKI MALAD(W), MUMBAI-400 064 / VS. D CIT - 12( 2)(1) ROOM NO.223/262,2 ND FLOOR AAYKAR BHAVAN M.K. ROAD, MUMBAI-400 020 PAN/GIR NO. AAGCS - 7146 - C ( '# /APPELLANT ) : ( $%'# / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : NONE / DATE OF HEARING : 23/11/2020 / DATE OF PRONOUNCEMENT : 23/11/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. NONE APPEARED FOR EITHER SIDE DURING HEARING OF THE APPEAL. HOWEVER, THE MATERIAL ON RECORD WAS QUITE SUFFICIEN T FOR DISPOSAL OF THE APPEAL AND THEREFORE, THE APPEAL IS BEING DISPOSED- OFF BY WAY OF THIS ORDER. 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY ADHOC DISALLOWANCE OF CERTAIN EXPENSES AND CERTAIN ADDITION U/S 41(1). AN ASSESSMENT WAS FRAMED AGAINST THE ASSESSEE FOR ASSESSMENT YEAR (AY ) 2013-14 U/S 143(3) ON 21/03/2016. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, IT ITA NO.3216/MUM/2019 ASSESSMENT YEAR: 2013-14 2 TRANSPIRED THAT THE ASSESSEE INCURRED PETTY CASH EX PENSES AGGREGATING TO RS.38,53,938/- UNDER REPAIR & MAINTENANCE EXPENS ES AND OPERATIONAL EXPENSES. UPON PERUSAL OF BILLS AND VOUCHERS, IT WA S FOUND THAT AROUND 10% OF THE VOUCHERS WERE SELF MADE AND NOR SUPPORTE D BY PROPER BILLS. ACCORDINGLY, AN ADHOC DISALLOWANCE OF 10% WAS MADE AGAINST THIS EXPENDITURE WHICH RESULTED INTO AN ADDITION OF RS.3 .85 LACS IN THE HANDS OF THE ASSESSEE. ANOTHER ADDITION WAS U/S 41(1) SINCE IT WAS FOUND T HAT SUNDRY CREDITORS HAVING OPENING BALANCE OF RS.9.98 LACS WERE UNPAID TILL DATE AND THEREFORE, A CONCLUSION WAS DRAWN THAT THE LIABILIT Y HAD CEASED TO EXIST IN TERMS OF SEC.41(1). ACCORDINGLY, THESE CREDITORS WE RE ADDED TO THE INCOME OF THE ASSESSEE U/S 41(1). 3. THE LD. CIT(A) CONFIRMED THE ADHOC DISALLOWANCE OF 10% PETTY CASH EXPENDITURE AND DISMISS THE GROUND RAISED BY T HE ASSESSEE. TO CONTEST THE ADDITION U/S 41(1), THE ASSESSEE SUBMIT TED ADDITIONAL EVIDENCES IN THE SHAPE OF LEDGERS OF SUNDRY CREDITO RS FROM FYS 2013-14 TO 2015-16. ADMITTING THE SAME, IT WAS NOTED THAT T HE BALANCES WERE ADJUSTED ON ACCOUNT OF REVERSAL OF CREDIT OF EXCESS BILLING, DEFECTIVE GOOD RETURNED, WRITE-OFF, SALES RETURN ETC. IT WAS ALSO OBSERVED THAT THERE WERE TWO SETS OF LEDGERS AND THEREFORE, THE LEDGERS FILE D BY THE ASSESSEE COULD NOT BE RELIED UPON AND THE ADDITION WAS TO BE CONFIRMED. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE CAREFULLY CONSIDERED THE MATERIAL ON REC ORD. SO FAR AS THE ADHOC DISALLOWANCE OF EXPENSES IS CONCERNED, WE FIN D THAT THE ASSESSEE INCURRED PETTY CASH EXPENDITURE WHICH WAS NOT SUPPO RTED BY BILLS / DOCUMENTARY EVIDENCES. THEREFORE, THERE WAS NO OPTI ON BEFORE LOWER AUTHORITIES EXCEPT TO ESTIMATE THE DISALLOWANCE. TH E 10% ESTIMATE, IN ITA NO.3216/MUM/2019 ASSESSMENT YEAR: 2013-14 3 OUR OPINION, IS QUITE REASONABLE UNDER THE CIRCUMST ANCES AND THE SAME WOULD NOT THEREFORE REQUIRE ANY INTERFERENCE ON OUR PART. THE GROUND THUS RAISED STANDS DISMISSED. 5. SO FAR AS THE ADDITION U/S 41(1) IS CONCERNED, W E DEEM IT FIT TO SET ASIDE THE FINDINGS OF LD. CIT(A) ON THIS ISSUE AND REMIT THE MATTER BACK TO THE FILE OF LD. AO IN THE LIGHT OF ADDITIONAL EV IDENCES SUBMITTED BY THE ASSESSEE SINCE THESE EVIDENCES WERE NEVER SUBJECT M ATTER OF SCRUTINY BY LD. AO. THE LD. AO IS DIRECTED TO APPRECIATE THE AD DITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE AND RE-ADJUDICATE THE ISS UE OF ADDITION U/S 41(1) AFTER PROVIDING REASONABLE OPPORTUNITY OF HEA RING TO THE ASSESSEE. THE ASSESSEE, IN TURN, IS DIRECTED TO SUBSTANTIATE HIS CLAIM IN THIS REGARD FAILING WHICH LD. AO SHALL BE AT LIBERTY TO RE-ADJU DICATE THE SAME ON THE BASIS OF MATERIAL ON RECORD. THIS GROUNDS STANDS AL LOWED FOR STATISTICAL PURPOSES. 6. RESULTANTLY, THE APPEAL STANDS PARTLY ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED ON 23 RD NOVEMBER, 2020. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 23/11/2020 SR.PS:-JAISY VARGHESE !' #' / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,$- , - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE ITA NO.3216/MUM/2019 ASSESSMENT YEAR: 2013-14 4 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.