M/s. Rahat Cargo Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 5316/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91312 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 13-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 30-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANOJ KR CHOPRA
• Keywords: Business expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - II , NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 5316 /DEL/2014 ASSESSMENT YEAR : 2010 - 11 APPELLANT BY : NONE RESPONDENT BY : SH. MANOJ KR. CHOPRA, SR. DR DATE OF HEARING : 13.07.2015 DATE OF PRONOUNCEMENT : 17 .07.2015 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31.07.2014 OF LD.CIT(A), XVIII, NEW DELHI PERTAINING TO THE ASSESSMENT YEAR 2010 - 11 ON THE FOLLOWING FACTS AND GROUND WHICH READS AS UNDER: - FACTS THE ASSESSEE FILED ITS RETURN FOR A.Y. 2010 - 11 ON 25.09.2010 DECLARING AN INCOME OF RS. 6,27,892/ - . THE CASE WAS SELECTED FOR SCRUTINY AND THE LEARNED ASSESSING OFFICER, WARD 15(1), NEW DELHI COMPLETED ASSESSMENT U/S 143(3) OF INCOME TAX ACT, 1961 AT RS.7,40,335/ - , THEREBY MAKING ADDITION OF RS .21,382/ - OUT OF STAFF WELFARE EXPENSES, RS. 10,000/ - ON ACCOUNT OF COMPUTER REPAIR & MAINTENANCE & RS.81,061/ - ON ACCOUNT OF OTHER BUSINESS EXPENSES ON ADHOC BASIS TO THE TOTAL INCOME OF THE ASSESSEE COMPANY . THE ASSESSEE COMPANY AGGRIEVED BY THE INCOME T AX ASSESSMENT ORDER FOR A.Y. 2010 - 11, FILED AN APPEAL BEFORE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XVIII, NEW DELHI ON 23 - 04 - 2014. THE SAID APPEAL WAS DISMISSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XVIII, NEW DELHI. 2. FURTHER AGGRIEVED THE ASSESSEE FILED THIS APPEAL ON THE FOLLOWING GROUNDS: - RAHAT CARGO PVT. LTD., L - 65B, MAHIPALPUR EXTENSION, NEW DELHI PAN:AAACR0301E VS. ITO, WARD - 15(1), NEW DELHI (APPELLANT) (RESPONDENT) PAGE 2 OF 3 GROUNDS OF APPEAL 1. THE LEARNED ASSESSING OFFICER OF INCOME TAX, WARD 15(1) NEW DELHI HAS ERRED IN MAKING ADDITION OF RS. 1,12,443/ - TO THE TOTAL INCOME OF THE ASSESSEE COMPANY BEING RS. 21 , 382/ - OUT OF STAFF WELFARE EXPENSES, RS. 10,000/ - ON ACCOUNT OF COMPUTER REPAIR & MAINTENANCE CHARGES & RS. 81,061 / - ON ACCOUNT OF OTHER BUSINESS EXPENSES ON ADHOC BASIS WITHOUT GIVING DUE OPPORTUNITY TO THE ASSESSEE WHICH IS TOTALLY UNJUSTIFIED AND UNFAIR. 2. TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XVIII, NEW DELHI DISMISSED THE SAID APPEAL VIDE THEIR APPELLATE ORDER DATED 31 - 07 - 2014 WITHOUT CONSIDERING THE MERITS OF THE CASE AND WITHOUT GOING INTO THE DEPTH OF THE CASE. ADDITION OF RS. 81,061/ - BEING DISALLOWANCE OF CONVEYENCE/ COMPUTER REPAIR & MAINTENANCE/ STAFF WELFARE WAS ON ADHOC BASIS BUT THE SAME WAS NOT CONSIDERED. 3 . NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE. UN DER THESE CIRCUMSTANCES I DISPOSE OF THE APPEAL EX PARTE, QUA THE ASSESSEE, AFTER HEARING THE LD D EPARTMENTAL R EPRESENTATIVE . 4 . THE ONLY ISSUE IS AD HOC DISALLOWANCE S MADE BY THE AO. THE FIRST DISALLOWANCE IS STAFF WELF ARE EXPENSES OF RS.21,382/ - . THE HEALTH INSURANCE CHARGES PAID OF MR. SUNIL KALRA HAS BEEN DI SALLOWED. A S HE IS AN E MPLOYEE OF THE ASSESSEE COMPANY INCURRING INSURANCE EXPENDITURE FOR MEDICAL COVER IS NOT PERSONAL EXPENDITURE . THE DISALLOWANCE IS MY VIEW IS NOT CALLED FOR . HENCE SAME IS DELETED. 5 . THE SECOND DISALLOWANCE IS OF AN AMOUNT OF RS.10,000/ - INCURRED ON ACCOUNT OF COMPUTER REPAIRS AND MAINTENANCE EXPENSES. THIS DISALLOWED IS ON THE GROUND THAT THE EXPENDITURE DOES NOT PERTAIN TO THIS YEAR . THE ASSESSEE SUBMITS A COPY OF THE BILL. AFTER PER USAL OF THE SAME , I CONCLUDE THAT THE EXPENSE IS ALLOWABLE IN THE IMPUGNED ASSESSMENT YEAR . THUS THIS ADDITION IS DELETED . 6 . THE NEXT DISALLOWANCE IS OF RS.81,061/ - ON ACCOUNT OF OTHER BUSINESS EXPENSES ON AD HOC BASIS THE FOLLOWING AMOUNTS . SI. NATURE OF EXPENSES TOTAL EXPENSES NOT VERIFYING FROM THE DEBITED TO P&L A/C BILLS AND VOUCHERS 1 SCOOTER REPAIR & MAINTENANCE 1,85,316 32,318 2 CONVEYANCE 1,50,149 30,280 3 - STAFF WELFARE 1,83,293 18,463 TOTA L 81,061 (ADDITION OF RS.81,061/ - ) PAGE 3 OF 3 7 . THE LD CIT(A) CONFIRMED THE ORDER OF THE AO. THE DISALLOWANCE IS MADE ON THE GROUND THAT THE EXPENDITURE IS NOT VERIFIABLE . ON THE FACTS OF THIS CASE I AM OF THE OPINION THAT THE ENDS OF JUSTICE WOULD BE M ET IF THE EXPENDITURE - DISALLOWANCE IS RESTRICTED TO RS.50,000/ - . THE ASSESSEE GETS RELIEF OF RS. 3 1,061/ - . 8 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 T H JULY, 2015 . - S D / - ( J. SUDHAKAR REDDY ) ACCOUNTANT MEMBER DATED: 1 7 T H JULY, 2015 AKK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR