SHRI SAI CONSTRUCTION, ALWAR V. ITO, BHIWADI

ITA 526/JPR/2023

AI Insights

The case involves Shri Sai Construction, the appellant, contesting the disallowance of certain business expenses by the Income Tax Officer (ITO), Bhiwadi, for the assessment year 2016-17. The expenses in question included sanitary, miscellaneous, and shattering expenses, which were disallowed by the AO due to insufficient evidence provided to substantiate their business necessity. The CIT(A) upheld the AO's decision, leading to the appeal before the Income Tax Appellate Tribunal, Jaipur. The Tribunal, after considering the submissions and the lack of adequate documentation presented by the assessee, decided to restore the case to the AO for a fresh assessment, emphasizing the need for a fair opportunity for the assessee to substantiate their claims.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132481 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 13-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure; Opportunity of being heard
• Section: 142(1); 143(2)

Judgement Text

vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh laanhixkslkbZ]U;kf;dlnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihy la-@ITA No. 526/JP/2023 fu/kZkj.ko"kZ@AssessmentYear :2016-17 Shri Sai Construction C-8, Batheja & Company, RIICO Chowk Opp. Mini ESI Hospital, Bhiwadi, Alwar cuke Vs. The ITO Bhiwadi Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACMFS 5753 J vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri Mukesh Khandelwal, CA jktLo dh vksj ls@Revenue by: Mrs. Monisha Choudhary, Addl. CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 27/09/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 04/10/2023 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 16-06-2023, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2016-17 wherein the assessee has raised the following grounds of appeal. ‘’1. That the ld. CIT(A) has erred seriously in law and on facts in sustaining the order of the AO without considering the facts and circumstances of the case. 2 ITA NO. 526/JP/2023 SHRI SAI CONSTRUCTION, ALWAR VS ITO, BHIWADI 2. That the ld. CIT(A) has erred on facts in sustaining the disallowances made by the AO on account of following expenses claimed as business expenditure by the appellant. (i) Sanitary expenses 100% disallowance Rs.4,18,904/- (ii) Misc. expenses 100% disallowance Rs.s41,230/- (iii) Shattering expenses 10% disallowance Rs.6,84,494/-‘’ 2.1 At the outset of the hearing the Bench noted that the ld. AR of the assessee vide application dated 22-09-2023 requested for adjournment of hearing of the case with following prayers. ‘’Since the necessary documents required for arguing the instant appeal are awaited and, therefore, it shall not be possible to argue the matter on the date fixed for hearing. Your honour is, therefore, sincerely requested to grant adjournment for next suitable date.’’ 2.2 The ld. DR objected to the adjournment application raised by the ld. AR of the assessee, with the prayer that in spite of various opportunities by the ld. CIT(A), the assessee did not bother to respond to any of the notices which indicates that the assessee was not willing to pursue the case before the ld. CIT(A) who based on the materials available on record dismissed the appeal of the assessee. 2.3 We have heard both the parties and perused the materials available and also noted that submissions raised by the ld. DR is tenable and thus the adjournment application raised by the ld. AR of the assessee is rejected and ponder to decide the appeal on merit. 3 ITA NO. 526/JP/2023 SHRI SAI CONSTRUCTION, ALWAR VS ITO, BHIWADI 3.1 As regards the grounds of appeal of the assessee, the Bench noted that the assessee firm had filed its return of income declaring total income at Rs.11,44,400/- on 14-10-2016. The AO issued notice u/s 143(2) on 5-07-2017 requiring the assessee to file evidence/ information in support of return of income on or before 19-07-2017. From the assessment order, it is noted that the AO issued various notices to the assessee u/s 142(1)/143(2) for filing reply but no reply had been filed by the assessee. The ld. AR of the assessee filed application before ITO, Ward 1(1), Alwar for transfer of file from Alwar to ITO Ward- Bhiwadi as jurisdiction over the case lie at Bhiwadi and thereafter the case was transferred to AO’s office on 30-10-2018 who issued notice u/s 142(1) asking the assessee to file requisite information on or before 14-11-2018. In response thereto, the AR of the assessee filed detailed information which was examined and found defects by the AO as mentioned in the assessment order dated 18-12-2018. Subsequently a show cause notice u/s 142(1) dated 10-12-2018 was issued to the assessee to file requisite information or before 11-12-2018. In response, thereto, the ld.AR of the assessee filed reply through e-mail on 13-12-2018 which was not found convincing and thus the AO as mentioned page 3 in the assessment order made following additions. 4 ITA NO. 526/JP/2023 SHRI SAI CONSTRUCTION, ALWAR VS ITO, BHIWADI Disallowance of Sanitary expenses Rs.4,18,904/- Disallowance of Misc. expenses Rs. 41,230/- Disallowance of Shattering expenses Rs. 6,84,494/- Total Rs. 11,444,628/- 3.2 In first appeal, the ld. CIT(A) has confirmed the action of the AO by observing as under:- ‘’6.1 Ground No. 1 is raised regarding the disallowance made under the head ‘’Other Expenses’’ to the extent of Rs.11,44,628/-. As the AO was not satisfied with the information/particulars furnished by the AR of the assessee with regard to the expenses claimed as business exigency during the course of the assessment proceedings, certain expenses as claimed as ‘sanitary expenses, misc. expenses and shattering expenses remained not fully verified and in view of the above the said amount of Rs.11,44,628/- was disallowed out of the total amount of expenses claimed as discussed in the impugned assessment order. The appellant failed to establish the genuineness of its claim during the course of appeal proceedings too in spite of availing reasonable number of opportunities afforded to explain/ substantiate the same. In view of this, Ground No. 1 is dismissed for want proper submission with credible documentary evidences.’’ 3.3 During the course of hearing, the ld. AR of the assessee also prayed before the Bench to give one more chance to submit proper submission with credible documentary evidence before the AO to square up the issue in question. 3.4 On the other hand, the ld. DR supported the order of the ld.CIT(A). 3.5 We have heard both the parties and perused the materials available o record. It is not imperative to repeat the facts of the case as has been elaborately discussed hereinabove by the lower authorities. The object of the Bench is to 5 ITA NO. 526/JP/2023 SHRI SAI CONSTRUCTION, ALWAR VS ITO, BHIWADI deliver justice to the assessee in case anything remained against the assessee for want of proper submission and credible documentary evidence before the lower authorities. The Bench noticed that the ld. AR of the assessee could not advance / submit the documents concerning the issue in question before the lower authorities to safeguard the interest of the assessee in spite of various opportunities by lower authorities. From the conspectus of the above case, the Bench feels that one more chance should be given to the ld. AR of the assessee to safeguard the interest of the assessee and thus the appeal of the assessee is restored to the file of the AO to decide it afresh but by providing adequate opportunity of being heard to the assessee. Thus the appeal of the assessee is allowed for statistical purposes. 3.6 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the AO independently in accordance with law. 6 ITA NO. 526/JP/2023 SHRI SAI CONSTRUCTION, ALWAR VS ITO, BHIWADI 4.0 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 04/10/2023. Sd/- Sd/- ¼lanhi xkslkbZ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 04 /10/2023 Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shri Sai Construction, Alwar 2. izR;FkhZ@ The Respondent- The ITO, Bhiwadi. 3. vk;dj vk;qDr@ The ld CIT ( 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File (ITA No.526/JPR/2023) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar