Chintoo Creations, New Delhi V. Addll., New Delhi

ITA 4789/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5483 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-02-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 18-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANISH GUPTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI RAJPAL YADAV, JM AND SHRI R.C.SHARMA, A M ITA NO.4789/DEL/2009 ASSESSMENT YEAR : 2006-07 M/S CHINTOO CREATIONS, WZ-119A/2, CHINTOO HEIGHTS BUILDING, NARAINA VILLAGE, NEW DELHI 110 028. PAN NO.AAAFC3893K. VS. ADDL.COMMISSIONER OF INCOME TAX, RANGE-27, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJAY JAIN, CA. RESPONDENT BY : SHRI MANISH GUPTA, DR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 15.9.2009 FOR THE AY 2006-07. 2. THE GRIEVANCE OF THE ASSESSEE RELATES TO CIT(A) S ACTION IN CONFIRMING ADHOC DISALLOWANCE MADE BY THE AO WITH RESPECT TO T HE FOLLOWING EXPENDITURE :- SL.NO. EXPENSE HEAD DISALLOWANCE 1. STAFF WELFARE 21,485.00 2. PRINTING 50,356.00 3. REPAIR & MAINTENANCE OF BUILDING 7,994.00 4. MACHINERY MAINTENANCE 14,419.00 5. VEHICLE RUNNING 61,768.00 6. OTHERS 63,440.00 -------------- 2,19,462.00 --------------- 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. THE AO HAS DISALLOWED EXPENDITURE IN RESPECT OF ABOVE EXPENSES CLAIMED BY THE ASSESSEE, ON ITA-4789/D/2009 2 THE PLEA THAT EXPENSES WERE NOT FULLY VERIFIABLE. CONTENTION OF LEARNED AR WAS THAT AO HAS NOT POINTED OUT ANY SPECIFIC EXPENDITUR E WHICH IS NOT PROPERLY VOUCHED AND HE HAS MADE AN AD-HOC DISALLOWANCE OF 1 0% WHICH IS NOT JUSTIFIED AS ALL THE EXPENDITURE WERE INCURRED WHOLLY AND EXCLUS IVELY FOR THE PURPOSE OF BUSINESS, AND IN VIEW OF THE NATURE OF EXPENDITURE INCURRED, IT IS NOT PRACTICABLE TO MAINTAIN VOUCHER FOR EACH AND EVERY EXPENDITURE. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOU ND THAT THE EXPENDITURE PERTAINS TO STAFF WELFARE, PRINTING, REPAIRS AND MA INTENANCE, MACHINERY MAINTENANCE ETC. AS THE AMOUNT OF DAILY EXPENDITUR E IS VERY SMALL, THE ASSESSEE HAS MAINTAINED SELF-MADE VOUCHERS. MERELY BECAUSE THE EXPENDITURE IS NOT FULLY SUPPORTED BY BILLS ISSUED BY THE OUTSIDE AGENCIES, DISALLOWANCE CANNOT BE MADE MERELY BY STATING THAT SAME ARE SUPPORTED BY SELF-M ADE VOUCHERS. KEEPING IN VIEW THE NATURE OF EXPENDITURE INCURRED AND THE SEL F-MADE VOUCHERS MAINTAINED BY THE ASSESSEE, WE DIRECT THE AO TO RESTRICT THE DISA LLOWANCE TO THE EXTENT OF 1/5 TH OF THE EXPENDITURE SO INCURRED WHICH ARE ESSENTIALLY F OR THE PURPOSE OF BUSINESS. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED IN PART. DECISION PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH, 2010. SD/- SD/- (RAJPAL YADAV) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19.03.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR ITA-4789/D/2009 3