M/s. Komal Agency, Nashik V. Income-tax Officer, Ward - 1 (3), Nashik

ITA 465/PUN/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9007 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 25-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Section: 40(b)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.465/PUN/2019 / ASSESSMENT YEAR : 2014-15 M/S. KOMAL AGENCY, SHOP NO.1, IST FLOOR, R, SHASHTRI PATH, NASHIK ROAD, NASHIK-422101 PAN : AANFK3535H VS. ITO, WARD-1(3), NASHIK APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-1, NASHIK DATED 01-01-2019 IN RELATIO N TO THE ASSESSMENT YEAR 2014-15. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF EXPENSES AMOUNTING TO RS.5,33,184/-. ASSESSEE BY SHRI PIYUSH BAFNA REVENUE BY SMT. NISHTHA TIWARI/ SMT. SHRADDHA NICHAL DATE OF HEARING 31-07-2020 DATE OF PRONOUNCEMENT 31-07-2020 ITA NO.465/PUN/2019 M/S. KOMAL AGENCY 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF WHOSESALE REC HARGE VOUCHERS. A RETURN OF INCOME WAS FILED DECLARING NIL INCO ME. THE ASSESSEE RECORDED TURNOVER OF RS.2.34 CRORES. IN THE PROFIT AND LOSS ACCOUNT, CERTAIN EXPENSES TOTALING TO RS.5,33,184/- WE RE DEBITED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO FURNISH DETAILS OF SUCH EXPENSES, WHICH LED TO THE DISALLOWANCE OF ENTIRE EXPENSES. THE LD. CIT(A) ECHOED THE ASSESSMENT ORDER ON THIS POINT. THE ASSESSEE IS AGGRIEVE D BY THE SUSTENANCE OF DISALLOWANCE OF FULL EXPENSES. 4. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. OUT OF THE TOTAL EX PENSES DISALLOWED BY THE ASSESSING OFFICER, INTEREST ON PARTNERS C APITAL STANDS AT RS.17,128/- AND REMUNERATION TO PARTNERS FIGURES AT RS.1,46,348/-. SALARY AND INTEREST TO THE PARTNERS HAVE TO BE ALLOWED IN TERMS OF SECTION 40(B) OF THE ACT. WE, THEREFOR E, DIRECT TO ALLOW THESE EXPENSES. IT IS FURTHER OBSERVED THAT THE AS SESSEE PAID CERTAIN EXPENSES THROUGH BANKING CHANNELS, SUCH AS, BANK COMMISSION AMOUNTING TO RS.52,259/-, SALARY (STAFF) AT RS.2,37,486/- AND TELEPHONE EXPENSES AT RS.11,763/-. SINCE THESE ITA NO.465/PUN/2019 M/S. KOMAL AGENCY 3 PAYMENTS WERE MADE THROUGH BANKING CHANNEL, AS HAS BEE N SPECIFICALLY STATED BEFORE THE LD. CIT(A) AS WELL, THERE CANNO T BE ANY QUESTION OF DISALLOWANCE OF SUCH EXPENSES BY THEIR VER Y NATURE. AS REGARDS THE OTHER REMAINING EXPENSES, WE ORD ER TO MAKE DISALLOWANCE AT 20%. IN OTHER WORDS, FULL AMOUNT OF SALARY A ND INTEREST TO PARTNERS ALONG WITH BANK COMMISSION, TELEPHONE BILLS AND SALARY TO STAFF TOGETHER WITH 80% OF OTHER EXPENSES ARE ALLOWED. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2020. SD/- SD/- (S.S. VISWANETHRA RAVI) (R.S.SY AL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 31 ST JULY, 2020 SATISH / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-1, NASHIK 4. THE PR. CIT-1, NASHIK , , / DR SMC, ITAT, PUNE 5. / GUARD FILE / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.465/PUN/2019 M/S. KOMAL AGENCY 4 DATE 1. DRAFT DICTATED ON 31-07-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 31-07-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *