Nanda Kishore Agarwalla, Bhubaneswar V. DCIT, Circle-4(1), Bhubaneswar

ITA 374/CTK/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4769 (ITAT-CUTTACK)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 27-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUVENDU DATTA
• Assessee Lawyers: S K AGARWA L LA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 37 4 /CTK/2017 ASSESSMENT YEAR : 201 3 - 2014 NANDA K ISHORE AGARWALLA , PLOT NO.87, KHARVEL NAGAR, BHUBANESWAR. VS. DCIT, CIRCLE 4(1), BHUBANESWAR PAN/GIR NO. AAOPA 1369 E (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.K.AGARWALLA, A R REVENUE BY : SHRI SUVENDU DATTA , DR DATE OF HEARING : 0 8 /0 8 / 2018 DATE OF PRONOUNCEMENT : 8 /0 8 / 2018 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 2, BHUBANESWAR DATED 28.6.2017 FOR THE ASSESSMENT YEAR 2013 - 2014. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN SUSTAINING THE ADHOC DISALLOWANCE AT RS.2,23,538/ - AND RS.11,093/ - / - AS AGAINST RS.4,47,077/ - AND RS.22,186/ - MADE BY THE ASSESSING OFFICER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSING OFFICER HAS DISALLOWED 15% OF REPAIR AND MAINTENANCE, SHOP EXPENSES, TELEPHONE EXPENSES , TRAVELLING & CONVEYANCE EXPENSES TOTALLING TO RS. 22,35,373 / - IN RESPECT OF M/. CAPITAL DISTRIBUTORS. SIMILARLY, THE ASSESSING OFFICER 2 ITA NO.37 4 /CTK/2017 ASSESSMENT YEAR : 2013 - 2014 DISALLOWED 20% OF SHOP EXPENSES, TELEPHONE EXPENSES AND TRAVELLING AND CONVEYANCE EXPENSES IN RESPECT O F M/S. E XPRESS SERVICE CENTRE TOTALLING TO RS.1,10,928/ - ON THE GROUND THAT THE ASSESSEE FAILED TO FURNISH DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM OF EXPENSES . 4. ON APPE AL, THE CIT(A) RESTRICTED THE DISALLOWANCE TO 10% IN RESPECT OF M/S. CAPITAL DISTRIBUTORS ON THE GROUND THAT THE EXPENSES ARE SUCH THAT THIRD PARTY BILLS AND VOUCHERS ARE DIFFICULT TO MAINTAIN. SIMILARLY, REGARDING THE DISALLOWANCE MADE IN RESPECT OF M/S . EXPRESS SERVICE CENTRE, THE CIT(A) RESTRICTED TO 10%. CONSEQUENTLY, THE ADDITION IS DETERMINED BY THE CIT(A) AT RS.2,23,539/ - AND RS.11,093/ - , RESPECTIVELY. 5 . BEING AGGRIEVED BY THE SAID ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 6 . BEFO RE US, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS INCURRED THE EXPENSES ON NORMAL COURSE OF BUSINESS OF THE ASSESSEE. LD A.R. SUBMITTED THAT IN THE PRECEDING ASSESSMENT YEAR 2012 - 13 AND IN THE SUCCEEDING ASSESSMENT YEARS 2014 - 15 AND 2015 - 1 6 , IN AN ASSESSMENT U/S.143(3) OF THE ACT, THE ASSESSING OFFICER HAS NOT DISALLOWED ANY SUCH EXPENSES CLAIMED BY THE ASSESSEE UNDER THE ABOVE HEADS. HE SUBMITTED THAT THERE IS NO REJECTION OF BOOKS OF ACCOUNT. THEREFORE, HE PRAYED FOR ALLOWING THE APPEAL O F THE ASSESSEE. 7 . LD D.R. SUPPORTED THE ORDER OF THE CIT(A). 3 ITA NO.37 4 /CTK/2017 ASSESSMENT YEAR : 2013 - 2014 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, WE FIND THAT AS THE ASSESSEE FAILED TO FURNISH ANY DOCUME NTARY EVIDENCES IN SUPPORT OF THE EXPENSES INCURRED UNDER THE HEAD REPAIR AND MAINTENANCE, SHOP EXPENSES, TELEPHONE EXPENSES, TRAVELLING & CONVEYANCE EXPENSES TOTALLING TO RS. 22,35,373/ - , THE ASSESSING OFFICER DISALLOWED 20 % OF THE CLAIMED OF THE ASSESSE E IN RESPECT OF M/S. CAPITAL DISTRIBUTORS. SIMILARLY, THE ASSESSING OFFICER HAS DISALLOWED 20% OF SHOP EXPENSES, TELEPHONE EXPENSES AND TRAVELLING AND CONVEYANCE IN RESPECT OF M/S. EXPRESS SERVICE TOTALLING TO RS.1,10,928/ - . 9 . ON APPEAL, THE CIT(A) RES TRICTED THE DISALLOWANCE TO 10% AS AGAINST 20 % MADE BY THE ASSESSING OFFICER . 1 0 . WE FIND THAT THE CIT(A) HAS OBSERVED THAT THE VERY NATURE OF EXPENSES IS SUCH THAT THIRD PARTY BILLS AND VOUCHERS ARE DIFFICULT TO MAINTAIN. IT HAS ALSO BEEN ARGUED AND SUBMI TTED BY LD A.R. THAT THE GENUINENESS OF THE EXPENDITURE IS NOT DOUBTED AND IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS CLAIMED BOGUS EXPENDITURE TO REDUCE ITS INCOME. ON PERUSAL OF ASSESSMENT ORDER PARA 2 PAGE 2, WE FIND THAT THE ASSESSEE APP EARED FROM TIME TO TIME AND FILED DETAILS. THE ASSESSING OFFICER HAS NOT MENTIONED WHICH DETAILS HAVE BEEN FURNISHED BY THE ASSESSEE. LD A.R. SUBMITTED THAT IN THE PRECEDING ASSESSMENT YEAR 2012 - 13 AND IN THE SUCCEEDING ASSESSMENT YEARS 2014 - 15 AND 2015 - 1 6 , IN AN ASSESSMENT U/S.143(3) OF THE ACT, THE ASSESSING OFFICER HAS NOT 4 ITA NO.37 4 /CTK/2017 ASSESSMENT YEAR : 2013 - 2014 DISALLOWED ANY SUCH EXPENSES CLAIMED BY THE ASSESSEE UNDER THE ABOVE HEADS. WE ALSO FIND THAT THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNT. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT IT WOULD MEET THE ENDS OF JUSTICE, IF THE EXPENSE IS ESTIMATED AT 5% OF THE EXPENSES CLAIMED BY THE ASSESSEE . WE ORDER ACCORDINGLY. THIS GROUND IS PARTLY ALLOWED . 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 8 /0 8 /2018. SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 8 /0 8 /2018 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : NANDA KISHORE AGARWALLA, PLOT NO.87, KHARVEL NAGAR, BHUBANESWAR. 2. THE RESPONDENT. DCIT, CIRCLE 4(1), BHUBANESWAR 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT - 2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//