Swift Securities Pvt Ltd, New Delhi V. DCIT Circle-22(2), New Delhi

ITA 5959/DEL/2019

AI Insights

The case involves Swift Securities Pvt. Ltd, which appealed against the order of the Commissioner of Income Tax (Appeals)-8, New Delhi, concerning the disallowance of certain business expenses claimed in the Assessment Year 2016-17. The expenses in question included business promotion expenses, Diwali expenses, and miscellaneous expenses, totaling Rs. 8 lakhs. The Assessing Officer disallowed these expenses on the grounds that they were not fully vouched and contained personal elements. The CIT(A) upheld these disallowances, leading to the present appeal before the Income Tax Appellate Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131250 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-10-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 09-07-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 5959/Del/2019 (Assessment Year: 2016-17) Swift Securities Pvt. Ltd, 57, Rajdhani Enclave, Pitampura, New Delhi Vs. DCIT, Circle-22(3), New Delhi (Appellant) (Respondent) PAN: AAGCS2294F Assessee by : None Revenue by: Shri Anuj Garg, Sr. DR Date of Hearing 17/10/2023 Date of pronouncement 20/10/2023 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.5959/Del/2019, arises out of the order of the Commissioner of Income Tax (Appeals)-8, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No.10218/18-19 dated 20.05.2019 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 19.12.2018 by the Assessing Officer, DCIT, Circle- 22 (2), New Delhi (hereinafter referred to as ‘ld. AO’). 2. None appeared on behalf of the assessee. Infact the assessee has not bothered to ensure the presence of the authorized representative right from date of filing of appeal. The notice has been issued to the assessee on several occasions at the registered address of the assessee as mentioned in Form No. 36. Since, sufficient opportunities have already been given to the assessee, we proceed to dispose of this appeal on hearing the ld DR and based on material available on record. ITA No. 5959/Del/2019 Swift Securities Pvt. Ltd Page | 2 3. The assessee has raised the following grounds of appeal:- 1(1) That in facts and circumstances of the case, the Ld. CIT(A) was not justified in making ad-hoc disallowance of Rs. 4,00,000/-on account of business promotion expenses even though same is duly supported from vouchers and incurred in the course of business of the appellant. (ii) That the appellant is a private limited company and the expenses being incurred for the purpose of business, the allegation of personal use is not relevant. 2(i) That in facts and circumstances of the case, the Ld. CIT(A) was not justified in making ad-hoc disallowance of Rs. 2,00,000/-on account of Diwali Expenses even though same is duly supported from vouchers and incurred in the course of business of the appellant. (ii) That the appellant is a private limited company and the expenses being incurred for the purpose of business, the allegation of personal use is not relevant. 3(1) That in facts and circumstances of the case, the Ld. CIT(A) was not justified in making ad-hoc disallowance of Rs. 2,00,000/-on account of Miscellaneous Expenses even though same is duly supported from vouchers and incurred in the course of business of the appellant. (ii) That the appellant is a private limited company and the expenses being incurred for the purpose of business, the allegation of personal use is not relevant.” 4. We have heard the rival submissions and perused the materials available on record. The return for AY 2016-17 was filed by the assessee company electronically on 15.10.2016 declaring total income of Rs. 6,15,57,770/-. The ld AO sought for details of various expenditures debited in the profit and loss account during the course of scrutiny proceedings, which was duly furnished by the assessee. From the perusal of the details furnished with regard to business promotion expenses, the ld AO observed that during the year the assessee had debited Rs. 37,01,797/- as against Rs. 28,06,248/- in immediately preceding year. The ld AO observed that these expenses are not fully vouched and contained personal element thereon. Accordingly, the ld AO made a disallowance of Rs. 4 lacs on account of unverifiable expenses towards business promotion. 5. The ld AO observed that the assessee had debited a sum of Rs. 16,42,646/- on account of Diwali expenses as compared to Rs. 14,74,752/- in ITA No. 5959/Del/2019 Swift Securities Pvt. Ltd Page | 3 immediately preceding year. The ld AO observed that these expenses are not fully vouched and contained personal element thereon. Accordingly, the ld AO made a disallowance of Rs. 2 lacs on account of unverifiable expenses towards Diwali expenses. 6. The ld AO observed that the assessee had debited a sum of Rs. 6,54,981/- under the head miscellaneous expenses during the year as against Rs. 4,05,467/- in immediately preceding year. The ld AO observed that these expenses are not fully vouched and contained personal element thereon. Accordingly, the ld AO made a disallowance of Rs. 2 lacs on account of unverifiable expenses towards Miscellaneous expenses. 7. Accordingly, the ld AO made disallowance of expenses totaling to Rs. 8 lac and completed the assessment, which was confirmed by the ld CIT(A). The ld CIT(A) had upheld the reasoning given by the ld AO for making the aforesaid disallowances. 8. Before us, no contrary evidence has been placed on record by the assessee to prove as to why the disallowance have been wrongly made. Accordingly, we deem it fit not to deviate from the stand taken by the ld CIT(A). Accordingly, we uphold the order of the ld CIT(A). Grounds raised by the assessee are dismissed. 9. In the result the appeal of the assessee is dismissed. Order pronounced in the open court on 20/10/2023. -Sd/- -Sd/- (KUL BHARAT) (M BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 20/10/2023 A K Keot Copy forwarded to 1. Applicant ITA No. 5959/Del/2019 Swift Securities Pvt. Ltd Page | 4 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi