Vupputuri Srinivasa Rao, Guntur V. ACIT, Circle-2(1), Guntur

ITA 391/VIZ/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5243 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 29-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 39 1 / VIZ /201 7 (ASST. YEAR : 20 12 - 13 ) VUPPUTURI SRINIVASA RAO, D.NO. 9 - 53, PULLADIGUNTA, VATTICHERUKURU MANDAL, GUNTUR. V S . ACIT, CIRCLE - 2(1), GUNTUR. PAN NO. ABBPV 5376 J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SMT. SUMAN MALIK SR. DR DATE OF HEARING : 17 / 0 1 /201 9 . DATE OF PRONOUNCEMENT : 06 / 0 2 /201 9 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , GUNTUR , DATED 30 / 11 /201 6 FOR THE ASSESSMENT YEAR 20 11 - 12 . 2. THERE IS A DELAY OF 135 DAYS IN FILING THE APPEAL . THE A SSESSEE HAS FILED A PETITION FOR CONDONATION OF DELAY WHERE IN HE STATED THAT THE MANAGING P ARTNER SRI VUPPUTURI SRINIVASA RAO HAD BEEN SICK WITH HIGH FEVER AND WEAKNESS DURING THE FIRST WEEK OF JANUARY 2017 AND WAS FOUND TO BE AFFECTED WITH HEPATITIS AND 2 ITA NO. 391 /VIZ/2017 ( VUPPUTURI SRINIVASA RAO ) J AUNDICE . HE WAS GIVEN TREATMENT IMMEDIATELY AND WAS ADVISED TO TAKE COMPLETE BED REST FOR TWO MONTHS . HOWEVER, EVEN AFTER TWO MONTHS SRI SRINIVASA RAO COULD NOT RECOVER FROM FEVER AND WEAKNESS . THEREFORE, THE MEDICATION WAS CONTINUED AND HE WAS ADVISED COMPLETE BED REST FOR ANOTHER T W O MONTHS. T HE MANAGING P ARTNER THUS COULD NOT ATTEND TO HIS NORMAL AFFAIRS DURING THE PERIOD OF 0 8 . 0 1 2017 TO 2 0.0 6 . 2017 . THE ASSESSEE ALSO FILED MEDICAL CERTIFICATE ALONG WITH THE PETITION. WE HAVE GONE THROUGH THE PETITION AND ALSO MEDICAL CERTIFICATE FILED BY THE ASSESSEE AND FIND TH A T THERE IS A SUFFICIENT CAUSE TO CONDONE THE DELAY . A CCORDINGLY, WE CONDONE THE DELAY. 3 . SO FAR AS MERITS OF THE CASE IS CONCERNED, THE ONLY ISSUE RAISED BY THE ASSESSEE IN RESPECT OF ADDITION OF RS. 28,70,661/ - . IN THE ASSESSING OFFICER, THE ASSESSING OFFICER HAS NOTED THAT ON PERUSAL OF THE RETURN OF I NCOME, WHICH WAS DOWNLOADED FROM THE AST MODULE RELEVANT TO THE ASSESSMENT YEAR 2012 - 13 , IT IS SEEN THAT THE ASSESSEE HAS DEBITED CERTAIN AMOUNTS TO THE PROFIT & LOSS ACCOUNT TOWARDS EXPENDITURE, THE DETAILS OF WHICH ARE AS UNDER: - S.NO. HEAD OF EXPENDITURE AMOUNT 1 FREIGHT 1,99,719 2 CONSUMPTION OF STORES AND SPARE PARTS 5,46,000 3 RENTS 1,75,000 4 COMMISSION 56,128 5 OTHER EXPENSES 18,93,814 TOTAL EXPENDITURE 28,70,661 3 ITA NO. 391 /VIZ/2017 ( VUPPUTURI SRINIVASA RAO ) IN THE ABSENCE OF THE BOOKS OF ACCOUNT AND THE RELEVANT BILLS/VOUCHERS, THE DETAILS OF SAID EXPENSE S AND ALSO PURPOSE OF EXPENSES COULD NOT BE ASCERTAINED. IN ABSENCE OF DETAILS AND DOCUMENTARY EVIDENCE INDICATING THE PURPOSE OF INCURRING SUCH LARGE AMOUNT OF EXPENSES, THE ALLOWABILITY OF DEDUCTION AGAINST THE SAID EXPENSES UNDER THE PROVISIONS OF INCOME TAX ACT , 1961 ALSO COULD N O T BE ASCERTAINED. IN THAT VIEW OF THE MATTER, THE ENTIRE EXPENDITURE OF RS. 28,70,661/ - IS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 4 . ON APPEAL, LD. CIT(A) CO NFIRMED THE ORDER OF THE ASSESSING OFFICER. 5. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TR IBUNAL. 6 . LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ENTIRE EXPENSES CANNOT BE DISALLOWED ON THE GROUND OF NON - FURNISHING OF DETAILS, THEREFORE, DISALLOWANCE CAN BE RESTRICTED TO 10% OF THE TOTAL EXPENDITURE INCURRED BY THE ASSESSEE. 7 . ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD . 4 ITA NO. 391 /VIZ/2017 ( VUPPUTURI SRINIVASA RAO ) 9. WE HAVE OBSERVED THAT THE DISALLOWANCE OF ENTIRE EXPENDITURE IS UNJUSTI FI ED A S THE ASSESSEE CANNOT CARRY THE BUSINESS WITHOUT INCURRING EXPENDITURE . THEREFORE, TO MEET THE ENDS OF JUSTICE , WE HOLD THAT RESTRICTION OF DISALLOWANCE OF EXPENDITURE TO 10% IS REASONABLE. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO 10%. THIS APPEAL ON THIS ISSUE IS PARTLY ALLOWED. 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 0 6 T H DAY OF FEB . , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 0 6 T H FEB . , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE VUPPUTURI SRINIVASA RAO, D.NO. 9 - 53, PULLADIGUNTA, VATTICHERUKURU MANDAL, GUNTUR . 2. THE REVENUE ACIT, CIRCLE - 2(1), GUNTUR. 3. THE PR. CIT , GUNTUR. 4. THE CIT(A) - 1, GUNTUR. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.