Shri Bal Kishan Khandelwal, Bareilly V. Income Tax Officer, Bareilly

ITA 415/LKW/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70546 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 03-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC : LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER I.T.A. NO. 415 /LKW/2013 ASSESSMENT YEAR:08 - 09 SHRI BAL KISHAN KHANDWELWAL, VS. INCOME TAX OFFICER, PROP. M/S JANTA SANITARY WORKS, WARD - 1(1), SHIVAJI MARG, BAREILLY. BAREILLY. PAN:AIXPK6346G (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI ALOK MITRA, D.R. DATE OF HEARING : 1 2/0 8 /2013 DATE OF PRONOUNCEMENT : 22/08/2013 ORDER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) , INTER ALIA, ON VARIOUS GROUNDS, WHICH ARE AS UNDER: 1. THAT THE APPELLATE ORDER IS BAD IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. CIT(APPEALS), BAREILLY HAS ERRED IN LAW AND ON FACTS BY SUSTAINING THE AD HOC DISALLOWANCE MADE BY ASSESSING OFFICER OF RS.20 , 000/ - IN SALARY EXPENSES. 3. THAT THE LD. CIT(APPEALS), BAREILLY HAS ERRED IN LAW AND ON FACTS BY SUSTAINING 10% AD HOC DISALLOWANCE MADE BY A SSESSING OFFICER OF RS.8 , 031 / - UNDER ELECTRICITY, GENERATOR EXPENSES, GENERAL EXPENSES, VEHICLE, TRAVELLING AND TELEPHONE EXPENSES. 2 4. THAT THE LD. CIT(APPEALS), BAREILLY HAS ERRED IN LAW AND ON FACTS BY SUSTAINING THE AD HOC ADDITION MADE BY A SSESSING OFFICER OF RS. 16 , 000 / - AS ALLEGED EXTRA HOUSE HOLD EXPENSES . 5. ANY OTHER GROUND AS DEEM FIT AT THE TIME OF HEARING OF APPEAL. 2. THIS APPEAL CAME UP FOR HEARING ON12TH AUGUST, 2013 BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. THE BRIEF SYNOPSIS ARE RECEIVED BY POST IN THE OFFICE. IN THE LIGHT OF THESE SYNOPSIS, I WAS OF THE VIEW THAT THIS APPEAL CAN BE DISPOSED OF EVEN IN THE ABSENCE OF THE ASSESSEE. ACCORDINGLY, THE REVENUE WAS HEARD. 3. APROPOS GROUND NO. 1 IS GENERAL AS SUCH NO INDEPENDENT ADJUDICATION IS CALLED FOR. 4 . APROPOS GROUND NO. 2, IT IS NOTED THAT THE REVENUE HAS MADE DISALLOWANCE OF ` 20,000/ - AGAINST THE SALARY EXPENSES ON AD HOC BASIS WITHOUT POINTING OUT ANY DEFECT. BEFORE THE CIT(A), THE ASSESSEE HAS FURNISHED THE DETAILS OF PAYMENT OF SALARY TO ITS EMPLOYEES. WITHOUT MAKING ANY CROSS VERIFICATION WITH REGARD TO THE GENUINENESS OF THE PAYMENT, THE ASSESSING OFFICER HAS MADE AD HOC DISALLOWANCE OF ` 20,000/ - AGAINST THE TOTAL CLAIM OF SALARY AT ` 1,24,608/ - . SINCE THE ASSESSEE HAS MADE A REASONABLE CLAIM OF SALARY EXPENSES, I DO NOT FIND ANY JUSTIFICATION IN MAKING THE AD HOC DISALLO WANCE. ACCORDINGLY, I DELETE THE AD HOC DISALLOWANCE OF ` 20,000/ - . 5 . GROUND NO. 3 OF THE APPEAL RELATES TO THE GENERAL DISALLOWANCE OF ELECTRICITY, GENERATOR EXPENSES, GENERAL EXPENSES, VEHICLE, TRAVELLING AND TELEPHONE EXPENSES. THE ASSESSING OFFICER MADE 20% AD HOC 3 DISALLOWANCE WHICH WAS RESTRICTED TO 10% BY THE CIT(A) WITHOUT POINTING OUT ANY DEFECT IN MAINTENANCE OF ACCOUNTS, BILLS AND VOUCHERS. THE ELECTRICITY AND GENERATOR EXPENSES EXCLUDING VEHICLE AND TELEPHONE EXPENSES ARE INCURRED FOR BUSINES S PURPOSE S , THEREFORE, NO DISALLOWANCE CAN BE MADE WITHOUT POINTING OUT ANY DEFECT IN THE MAINTENANCE OF ACCOUNTS. BUT THERE MAY BE A POSSIBILITY THAT TELEPHONE AND VEHICLE MIGHT HAVE BEEN USED FOR THE PERSONAL PURPOSE OF THE ASSESSEE, THEREFORE, CERTAIN DISALLOWANCE CAN BE MADE AGAINST THE TELEPHONE EXPENSES AND VEHICLE EXPENSES. THE VEHICLE EXPENSES WERE CLAIMED AT ` 22,367/ - AND TELEPHONE EXPENSES WERE CLAIMED AT ` 20,000/ - . WITH REGARD TO THESE EXPENSES A DISALLOWANCE AT 10% CAN BE MADE ON ACCOUNT OF ITS PERSONAL USE BUT FOR OTHER EXPENSES, I AM OF THE VIEW THAT NO DISALLOWANCE CAN BE MADE AS THEY WERE INCURRED FOR BUSINESS PURPOSE. ACCORDINGLY, I RESTRICT THE DISALLOWANCE TO 10% ON VEHICLE EXPENSES AND TELEPHONE EXPENSES WHICH COME S TO ` 4,236.80. 6 . APROPOS GROUND NO. 4, IT IS NOTICED THAT THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE OF ` 16,000/ - ON AD HOC BASIS ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWALS. BEFORE THE CIT(A), THE ASSESSEE HAS FURNISHED THE DETAILS OF THE WITHDRAWAL S WITH THE SUBMISSION THAT TOTAL WITHDRAWAL OF THE FAMILY WAS ` 2,60,000/ - WHICH COMES TO ` 21,657/ - PER MONTH AND CAN BE CONSIDERED TO BE THE REASONABLE AMOUNT FOR THE MAINTENANCE OF THE ENTIRE FAMILY BUT THE CIT(A) WAS NOT CONVINCED WITH THIS EXPLANATION O F THE ASSESSEE AND CONFIRMED THE DISALLOWANCE OF ` 16, 000/ - MADE BY THE ASSESSING OFFICER ON AD HOC BASIS. 7 . I HAVE CAREFULLY EXAMINED THE SUBMISSIONS MADE BY THE ASSESSEE ALONG WITH THE DETAILS OF WITHDRAWALS. THE ASSESSEE HIMSELF HAS MADE 4 WITHDRAWAL OF ` 1,64,000/ - AND BOTH THE SONS HAVE MADE WITHDRAWALS OF ` 48,000/ - EACH, THEREFORE, THE TOTAL WITHDRAWAL MADE BY THE FAMILY CAN BE CONSIDERED TO BE REASONABLE FOR THE MAINTENANCE OF THE ENTIRE FAMILY. THEREFORE, I DO NOT FIND ANY MERIT IN THIS ADDITION AND DELETE THE SAME. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 22/08/2013 ) SD/. (SUNIL KUMAR YADAV) JUDICIAL MEMBER DATED: 22/08/2013 *CL SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR