M/s. Dream Team Sahara, Bhubaneswar V. ITO, Ward-5(2), Bhubaneswar

ITA 492/CTK/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5636 (ITAT-CUTTACK)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 05-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: S K JENA
• Section: 142(1); 37(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ITA NO . 492 /CTK/201 7 ( / ASSESSMENT YEAR : 20 1 4 - 20 1 5 ) M/S DREAM TEAM SAHARA, AT - PLOT NO.N - 5/538, IRC VILLAGE NAYAPALLI, BHUBANESWAR - 751015, ODISHA VS. ITO, WARD - 5(2), BHUBANESWAR ./ ./ PAN/GIR NO. : A A HFD 2886 N ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI S.K.JENA , AR /REVENUE BY : SHRI D.K.PRADHAN , DR / DATE OF HEARING : 17 / 0 5 /201 8 / DATE OF PRONOUNCEMENT 17 / 05 /201 8 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : TH E ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDER OF CIT(A) - 2 , BHUBANESWAR , DATED 25.08.2017 , PASSED IN I.T.APPEAL NO. 0211 / 2016 - 17 , U/S. 143(3)/250 OF THE I.T.ACT FOR THE ASSESSMENT YEAR 20 1 4 - 20 1 5 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. FOR THAT, THE LUMP - SUM ADDITIONS OF RS.50,000/ - ON ACCOUNT OF DONATION, RS.52,000/ - ON ACCOUNT OF BUS BRANDING RECEIVABLE AND THE AD - HOC ADDITION @10% TOWARDS EXPENSES CLAIMED AMOUNTING TO RS.3,01,428/ - BY THE LD. AO ARE INCORRECT, PARTICULARLY THERE IS NO MATERIAL AVAILABLE ON RECORD TO SHOW THAT THOSE EXPENSES ARE BOGUS IN NATURE, HOWEVER, THE LD. CIT(A) HAS CONFIRMED THE SAME BY MERELY SAYING THAT THE DISALLOWANCE IS NOT EXCESSIVE THEREFORE BOTH THE AUTHORITIES ARE ERRED IN DISALLOWING THE SAME HENCE THE SAID ADDITIONS ARE LIABLE TO BE DELETED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM DERIVES INCOME FROM BUS PLYING AND FILED THE RETURN OF INCOME ON 29.11.2014 FOR ASSESSMENT YEAR 2014 - 2015 DECLARING TOTAL INCOME OF RS. 9,83,390/ - . SUBSEQUENTLY, THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT AND THE ITA NO. 492 /201 7 2 CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE. IN COMPLIANCE THE LD. AR OF THE ASSESSEE APPEARED AND SUBMITTED THE RELEVANT DETAILS. THE AO CONS IDERING THE SUBMISSIONS OF THE ASSESSEE AND MATERIAL PLACED ON RECORD COMPLETED THE ASSESSMENT MAKING VARIOUS ADDITIONS AND ASSESSED THE TOTAL INCOME AT RS. 24,62,220/ - AND PASSED ORDER U/S.143(3) OF THE ACT, DATED 30.12 .2016 . 4. ON APPEAL, THE CIT(A) CONF IRMED THE ADDITIONS MADE BY THE AO AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGAINST THE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 6. BEFORE US, LD. AR SUBMITTED THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITIONS IN RES PECT OF D ONATION, BUS BRANDING RECEIVABLE AND THE ADHOC ADDITION @10% TOWARDS EXPENSES CLAIMED FOR NIPPLE GREASING, PRESSURE CHEQUE AND REPAIR AND MAINTENANCE CHARGES. LD. AR FURTHER SUBMITTED THAT THE AO HAS DISBELIEVED THESE EXPENSES AND ESTIMATED AT 10%. THE FAC T REMAINS THAT THE LEDGER ACCOUNT AND BILLS AND VOUCHERS WERE PRODUCED AND MOST OF THE PAYMENTS WERE MADE ON DAY - TO - DAY BASIS. THE AO HAVING VERIFIED WAS NOT SATISFIED WITH THE CLAIM OF EXPENSES AND, THEREFORE, MADE ADDITION @10%. LD. AR SUBMITTED THAT TH E ADDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) IS NOT TENABLE IN LAW AND PRAYED FOR ALLOWING THE APPEAL. ITA NO. 492 /201 7 3 7. CONTRA, LD. DR RELIED ON THE ORDERS OF AO . 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON THE DISPUT ED ISSUE OF DISALLOWANCE OF DONATION RS.50,000/ - AND RS.52,000/ - ON ACCOUNT OF BUS BRANDING RECEIVABLE, THE AR COULD NOT BRING OUT ANY MATERIAL BEFORE THE CIT(A). EVEN BEFORE US, THE AR COULD NOT SUBSTANTIATE ITS CLAIM. THEREFORE, WE UPHOLD THE FINDING OF THE CIT(A) . I N RESPECT OF DISALLOWANCE MADE BY THE AO @10% ON THE CLAIM OF VEHICLE MAINTENANCE EXPENSES OF RS.30,14,284/ - , WE FOUND THAT THE ASSESSEE HAS PRODUCED THE LEDGER ACCOUNT COPIES, WHEREAS THE AO HAVING VERIFIED THE BILLS AND VOUCHERS WAS NOT SATISFIED AS THEY ARE MOSTLY SELF - MADE AND ALSO THEY COULD NOT BE PROPERLY EXAMINED BUT THE FACT REMAINS THAT THESE EXPENSES ARE INCURRED EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND THEREFORE, TO BE ALLOWABLE UNDER SECTION 37(1) OF THE ACT. ACCORDINGLY, WE RESTRICT THE EST IMATION MADE BY THE AO AND CONFIRMED BY THE CIT(A) TO 5 % OF THE TOTAL EXPENSES CLAIMED. THUS, THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED PARTLY. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . O RDER PRONOU NCED IN THE OPEN COURT ON 17 / 05 / 201 8 . SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 17 / 05 /201 8 . . / PKM , SENIOR PRIVATE SECRETARY ITA NO. 492 /201 7 4 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//