Mangesh Kumar K (HUF), Chidambaram V. ITO Ward 3, Cuddalore

ITA 661/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1049 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 23-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: S SRIDHAR

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL B SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER !./ ITA NO.661/CHNY/2018 # $%# / ASSESSMENT YEAR : 2013-14 SHRI MANGESH KUMAR. K (HUF), NO.167, BAZAAR STREET, CHIDAMBARAM 608 001. PAN : AACHM 7809 K V. THE INCOME TAX OFFICER, WARD 3, CUDDALORE. ('(/ APPELLANT) ()*'(/ RESPONDENT) '( + , / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE )*'( + , / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT - $ + ./ / DATE OF HEARING : 05.09.2018 01% + ./ / DATE OF PRONOUNCEMENT : 12.09.2018 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERR Y, DATED 15.12.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS EX PARTE DECISION ON ESTIMATE BASIS. 2 I.T.A. NO.661/CHNY/18 3. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THERE WAS A SURVEY IN THE PREMISES OF THE ASSE SSEE. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PAWN BROKING. THE ASSESSEE CLAIMED PAYMENT OF SALA RY AND BONUS TO THE EMPLOYEES. HOWEVER, ACCORDING TO THE LD. CO UNSEL, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE TO THE EXTENT 50% ON THE GROUND THAT SMT. M. SUBHANGI WAS ENGAGED IN THE MAIN BUSINESS OF PAWN BROKING. ON APPEAL BY THE ASSESSE E, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) RESTRICTED THE DISALLOWANCE TO 30%. ACCORDING TO THE LD. COUNSEL, 30% OF DISALLOW ANCE IS VERY HIGH, THEREFORE, IT MAY BE RESTRICTED REASONABLY. ON A QUERY FROM THE BENCH WHAT MAY BE THE REASONABLE DISALLOWANCE? THE LD.COUNSEL VERY FAIRLY SUBMITTED THAT 15% OF TOTAL CLAIM MAY BE A REASONABLE DISALLOWANCE. 4. ON THE CONTRARY, SHRI B. SAGADEVAN, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT IT IS NOT CLEAR WHET HER THE REGISTER AND LEDGER PRODUCED BY THE ASSESSEE BEFORE THE AUTH ORITIES BELOW WERE BELONGING TO INDIVIDUAL OR HUF. MOREOVER, ACC ORDING TO THE LD. D.R., NO EVIDENCE WAS FOUND FOR PAYMENT OF BONU S. IN THE ABSENCE OF ANY MATERIAL, THE CIT(APPEALS) HAS RESTR ICTED THE DISALLOWANCE AT 30%. 3 I.T.A. NO.661/CHNY/18 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ISSUE ARISES FOR CONSIDERATION IS ALLOWANCE OF EXPENSES CLAIMED BY THE ASSESSEE. THE ASSESSING OFFICER DISALLOWED 50% OF TOTAL CLAIM. HOWEVER, THE CIT(APPEALS) RESTRICTED THE SAME TO 30 % OF TOTAL CLAIM. TAKING INTO CONSIDERATION OF THE NATURE OF BUSINESS AND THE OTHER CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT DISALLOWANCE 15% OF TOTAL CLAIM WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW 15% OF T OTAL CLAIM OF EXPENDITURE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 12 TH SEPTEMBER, 2018 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 3! /DATED, THE 12 TH SEPTEMBER, 2018 4 I.T.A. NO.661/CHNY/18 KRI. + ).45 65%. /COPY TO: 1. '( /APPELLANT 2. )*'( /RESPONDENT 3. - 7. () /CIT(A), PUDUCHERRY 4. PRINCIPAL CIT, PUDUCHERRY 5. 5$8 ). /DR 6. 9# : /GF.