Jagbir Singh, New Delhi V. ACIT, New Delhi

ITA 6838/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1570 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 30-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B P SINGH
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.6838/DEL/2015 ASSESSMENT YEAR: 2012-2013 JAGBIR SINGH, A-3/222/1, 1 ST FLOOR, SECTOR-7, ROHINI, NEW DELHI. PAN: AAQPS9994K VS. ACIT, CIRCLE-62(1), E BLOCK, CIVIC CENTRE, SP MUKHERJEE MARG, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI B.P. SINGH, SR.DR DATE OF HEARING : 18.10.2018 DATE OF PRONOUNCEMENT : 20.11.2018 ORDER PER R.K. PANDA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 10 TH DECEMBER, 2015 OF THE CIT(A)-20, NEW DELHI RELATING TO ASSESS MENT YEAR 2012-13. 2. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEHA LF OF THE ASSESSEE. THEREFORE, THIS APPEAL IS BEING DISPOSED OF ON THE BASIS OF TH E MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. ITA NO.6838/DEL/2015 2 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF CIVIL CONTRACTOR UNDER T HE NAME AND STYLE OF M/S SHIVA CONSTRUCTIONS. HE FILED HIS RETURN OF INCOME ON 29 TH SEPTEMBER, 2012 DECLARING TOTAL INCOME AT RS.52,60,883/-. DURING THE YEAR UNDER CO NSIDERATION, THE ASSESSEE HAS SHOWN NET PROFIT OF RS.37,03,145/- AT A GROSS RECEI PT OF RS.14,50,01,582/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER ASKED THE ASSESSEE TO PRODUCE ORIGINAL BOOKS OF ACCOUNT, BILLS, VOUCHERS, MUSTER ROLLS, WAGE SHEETS, ETC. FOR VERIFICATION. ON PERUSAL OF THE PROFIT & LOSS ACCO UNT, HE NOTED THAT THE ASSESSEE HAS DEBITED A SUM OF RS.8,34,66,023/- ON ACCOUNT OF PUR CHASE OF MATERIAL. FROM THE BILLS AND VOUCHERS SO PRODUCED BY THE ASSESSEE, THE ASSES SING OFFICER NOTED THAT SOME OF THE BILLS/VOUCHERS ARE MISSING. IN THE ABSENCE OF PRODUCTION OF THE SAME ON THE GROUND THAT THIS MIGHT HAVE BEEN MISPLACED DUE TO WORK ON VARIOUS SITES, THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.3,50,000/- ON ACCOU NT OF UNVERIFIABLE PURCHASE TO PLUG THE LEAKAGE OF REVENUE. SO FAR AS THE LABOUR CHARGE IS CONCERNED, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS ADOPTED RS.3,95 ,11,250/- AS LABOUR CHARGES. HE ASKED THE ASSESSEE TO FURNISH THE COMPLETE DETAILS OF WORK AND LABOUR EMPLOYED FOR THE PROJECTS UNDERTAKEN. IN THE ABSENCE OF ANY PROPER EXPLANATION FILED IN THIS BEHALF AND OBSERVING THAT THE RECIPIENTS HAVE PUT THEIR THUMB IMPRESSION ON THE MUSTER ROLL FOR WHICH IT IS NOT VERIFIABLE, THE ASSESSING OFFICER M ADE DISALLOWANCE OF RS.2,50,000/- OUT OF THE LABOUR CHARGES TO PLUG THE LEAKAGE OF RE VENUE. SIMILARLY, THE ASSESSING OFFICER DISALLOWED AN AMOUNT OF RS.1 LAKH FROM THE TOTAL SALARY DEBITED AT RS.59,77,333/- IN THE ABSENCE OF FURNISHING OF COMP LETE DETAILS OF WORK AND LABOUR. ITA NO.6838/DEL/2015 3 THE ASSESSING OFFICER ALSO DISALLOWED AN AMOUNT OF RS.1,90,028/- BEING 1/5 OF THE TOTAL MOTOR CAR EXPENSES ON ACCOUNT OF PROBABLE PER SONAL USE. AN AMOUNT OF RS.1 LAKH OUT OF STAFF WELFARE EXPENSES DEBITED AT RS.5,19,53 2/- WAS ALSO DISALLOWED. THE ASSESSING OFFICER ALSO DISALLOWED DIWALI EXPENSES O F RS.65,100/- OUT OF RS.3,25,500/- DEBITED BY THE ASSESSEE ON THE GROUND THAT NAME OF THE ASSESSEE IS NOT WRITTEN ON SOME OF THE BILLS AND THE PAYMENTS ARE MADE IN CASH. TH E ASSESSING OFFICER DISALLOWED AN AMOUNT OF RS.64,680/- OUT OF TOTAL TRAVELLING EXPEN SES OF RS.3,23,400/- ON ACCOUNT OF THE SAME NOT BEING SUPPORTED BY BILLS AND VOUCHERS. THE ASSESSING OFFICER FURTHER MADE A DISALLOWANCE OF RS.43,968 OUT OF TOTAL TELEP HONE EXPENSES DEBITED AT RS.2,19,840/- TO PREVENT LEAKAGE OF REVENUE ON ACCO UNT OF PROBABLE PERSONAL USE. SIMILARLY, HE ADDED AN AMOUNT OF RS.1,81,130/- ON A CCOUNT OF INTEREST INCOME U/S 244A. THE ASSESSING OFFICER ACCORDINGLY DETERMINED TOTAL INCOME OF THE ASSESSEE AT RS.69,90,690/-. 4. IN APPEAL, THE LD.CIT(A) DISALLOWED THE ADDITION OF RS.1 LAKH ON ACCOUNT OF STAFF WELFARE EXPENSES. SIMILARLY, HE GAVE PART RELIEF O UT OF THE MOTOR CAR EXPENSES AND TELEPHONE EXPENSES BY RESTRICTING SUCH DISALLOWANCE TO 10% OF THE MOTOR CAR EXPENSES AND REDUCING RS.21,984/- OUT OF TELEPHONE EXPENSES. HE, HOWEVER, SUSTAINED THE BALANCE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 5. AGGRIEVED WITH SUCH PART RELIEF GIVEN BY THE CIT (A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S:- 1. THE ID CIT(A) WITHOUT APPRECIATING THE CORRECT FACT S OF THE CASE IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF RS. 3,50,000/- MADE BY LD ASSESSING OFFICER UNDE R THE HEAD BUILDING MATERIAL ITA NO.6838/DEL/2015 4 EXPENSES ON ESTIMATION BASIS. 2. THE ID CIT(A) WITHOUT APPRECIATING THE CORRECT FAC TS OF THE CASE IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF RS. 2,50,000/- MADE BY LD ASSESSING OFFICER UNDE R THE HEAD LABOUR CHARGES ON ESTIMATION BASIS. 3. THE ID CIT(A) WITHOUT APPRECIATING THE CORRECT FAC TS OF THE CASE IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF RS. 1,00,000/- MADE BY LD ASSESSING OFFICER UNDE R THE HEAD SALARY PAID ON ESTIMATION BASIS. 4. THE ID CIT(A) IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF RS. 59731/- OUT OF CAR RUNNING AND MAINTENANCE AND INTEREST OF CAR LOAN MADE BY LD ASS ESSING OFFICER ON ESTIMATION BASIS. 5. THE ID CIT(A) WITHOUT APPRECIATING THE CORRECT FACT S OF THE CASE IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF RS. 65,100/- MADE BY LD ASSESSING OFFICER UNDER THE HEAD DIWALI EXPENSES ON ESTIMATION BASIS. 6. THE ID CIT(A) WITHOUT APPRECIATING THE CORRECT FACT S OF THE CASE IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF RS. 64,680/- MADE BY LD ASSESSING OFFICER UNDER THE HEAD TRAVELLING EXPENSES ON ESTIMATION BASIS. 7. THE ID CIT(A) WITHOUT APPRECIATING THE CORRECT FACT S OF THE CASE IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF RS. 21,984/- MADE BY LD ASSESSING OFFICER UNDER THE HEAD TELEPHONE EXPENSES ON ESTIMATION BASIS. APPELLANT HAS EVERY RIGHT TO MAKE, ADD, DELETE, M ODIFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 6. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS AN ADMITTED FA CT THAT THE ASSESSING OFFICER MADE VARIOUS DISALLOWANCES ON THE GROUND THAT ALL THOSE EXPENSES WERE NOT FULLY SUPPORTED BY BILLS AND VOUCHERS AND, THEREFORE, THE POSSIBILI TY OF REVENUE LEAKAGE CANNOT BE RULED OUT. WE FIND, IN APPEAL, THE LD. CIT(A) SUSTAINED MOST OF THE ADDITIONS EXCEPT STAFF WELFARE EXPENSES, DEPRECIATION ON MOTOR CAR AND 50% OF THE TELEPHONE EXPENSES AND ITA NO.6838/DEL/2015 5 SUSTAINED THE BALANCE AMOUNT ON THE GROUND THAT THE ASSESSEE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HAS AGREED FOR AD HOC ADDITION AS A RESULT OF NON-PRODUCTION OF VOUCHERS. IT IS THE SETTLED PROPOSITION OF LAW T HAT FOR CLAIMING ANY EXPENDITURE AS AN ALLOWABLE DEDUCTION, THE ONUS IS ALWAYS ON THE ASSE SSEE TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF THE ASSESSING OFFICER THAT S UCH EXPENDITURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. HOWEVER, IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS CAST UPON HIM SINCE EITHER SOME OF THE BILLS OR VOUCHERS ARE MISSING OR ARE NOT SUPPORTED BY PROPER BILLS AND VOUCHERS AND IN MOST OF THE CASES SUCH AMOUNT HAS BEEN PAID IN CASH. THERE FORE, CERTAIN DISALLOWANCE HAS TO BE MADE OUT OF THE VARIOUS EXPENSES CLAIMED BY THE ASSESSEE FOR WHICH THE ASSESSING OFFICER HAS GIVEN THE OBSERVATIONS WHILE MAKING THE DISALLOWANCE. HOWEVER, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUST AINED BY THE CIT(A) IN OUR OPINION, APPEARS TO BE ON THE HIGHER SIDE. WE, THE REFORE, DEEM IT PROPER TO REDUCE THE DISALLOWANCE AS UNDER:- NATURE OF EXPENSES DISALLOWANCE BY A.O. SUSTAINED BY CIT(A) RELIEF GRANTED BUILDING MATERIAL 3,50,000 3,50,000 1,00,000 LABOUR CHARGES 2,50,000 2,50,000 1,00,000 SALARIES 1,00,000 1,00,000 25,000 CAR EXPENSES 1,90,028 59,731 NIL DIWALI 65,100 65,100 30,000 TELEPHONE 43,968 21984 NIL TRAVELLING 64,680 64,680 25,000 7. THE ASSESSING OFFICER WILL GRANT CONSEQUENTIAL R ELIEF TO THE ASSESSEE AS ABOVE. THE GROUNDS RAISED BY THE ASSESSEE ARE, ACCORDINGLY , PARTLY ALLOWED. ITA NO.6838/DEL/2015 6 8. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS PARTLY ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 0.11.2018. SD/- SD/- (KULDIP SINGH) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMFBER DATED: 20 TH NOVEMBER, 2018 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI