Smt Gurpreet Kaur Bhatia, Indore V. ACIT 3(1), Indore

ITA 724/Ind/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7061 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-01-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 05-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 142(1); 143(2)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.724/IND/2018 ASSESSMENT YEAR 2014-15 REVENUE BY SHRI ASHISH PORWAL , SR.DR ASSESSEE BY SHRI ANIL KAMAL GARG , CA DATE OF HEARING 2 9 . 1 .20 20 DATE OF PRONOUNCEMENT 05 .2. 2020 O R D E R PER MANISH BORAD, AM THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2014-15 IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEA LS)-I (IN SHORT LD.CIT(A)], INDORE DATED 15.06.2018 WHICH IS ARIS ING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(IN SHOR T THE ACT) DATED 31.10.2016 FRAMED BY ACIT-3(1), INDORE. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEA L; SMT. GURPREET KAUR BHATIA, AD-306, SCHEME NO.74-C, VIJAY NAGAR, INDORE VS. ASSTT. COMMISSIONER OF INCOME TAX-3(1), INDORE (APPELLANT) (RESPONDENT ) PAN NO. ACFPB4294A SMT. GURPREET KAUR BHATIA ITA NO. 724/IND/2018 2 1. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ADDITION OF RS.21,68,083/- MADE BY T HE AO IN THE APPELLANTS INCOME ON ACCOUNT OF 1/3 RD DISALLOWANCE OUT OF VARIOUS EXPENSES CLAIMED BY THE APPELLANT .WITHOUT CONSIDER ING AND APPRECIATING THE APPELLANTS SUBMISSION AND AS ALSO WITHOUT CONS IDERING THE MATERIAL FACT THAT ALL THE EXPENSES CLAIMED BY THE APPELLANT WERE FULLY VOUCHED, GENUINE AND WERE INCURRED EXCLUSIVELY AND NECESSARI LY FOR THE PURPOSE OF BUSINESS ONLY. 2. THAT, THE APPELLANT FURTHER CRAVES LEAVE TO ADD, ALTER AND/OR AMEND ANY OF THE FOREGOING GROUNDS OF APPEAL AS AND WHEN CON SIDERED NECESSARY. 3 . THE SOLE GRIEVANCE OF THE ASSESSEE RELATES TO T HE ADDITION OF RS.21,68,083/- CONFIRMED BY THE LD. CIT(A) BEING 1/ 3 RD AMOUNT OF DISALLOWANCE MADE BY THE LD. A.O OF VARIOUS EXPENSE S INCURRED DURING THE COURSE OF BUSINESS. 4. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT THE AS SESSEE IS ENGAGED IN THE BUSINESS OF LIQUOR TRADE. E-RETURN FILED ON 25.11.2014 DECLARING INCOME OF RS. 58,76,270/-. CA SE SELECTED FOR SCRUTINY THROUGH CASS FOLLOWED BY SERVING OF NOTICE S U/S 143(2) AND 142(1) OF THE ACT. FINANCIAL STATEMENTS ARE AUD ITED, BOOKS OF ACCOUNTS AND OTHER ACCOUNTS TEST CHECKED. DURING T HE COURSE OF VERIFICATION OF THE EXPENSES LD. A.O OBSERVED THAT VARIOUS EXPENSES SMT. GURPREET KAUR BHATIA ITA NO. 724/IND/2018 3 WERE NOT SUPPORTED WITH THE BILLS AND VOUCHERS. IT WAS SUBMITTED BY THE ASSESSEE THAT SHE RUNS LIQUOR SHOPS AT VARIO US LOCATIONS. THE BILLS AND VOUCHERS RELATING TO THESE PETTY EXPENSES ARE LYING AT VARIOUS LIQUOR SHOPS AND THUS THE SAME COULD NOT BE PRODUCED. LD. A.O ACCORDINGLY DISALLOWED 1/3 RD OF THE TOTAL EXPENSES THEREBY MAKING DISALLOWANCE OF RS.21,68,083/- AND ASSESSED INCOME AT RS.80,44,353/-. 5. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) BUT FAILED TO SUCCEED AS THE IMPUGNED DISALLOWANCE WAS SUSTAINED OBSERVING AS FOLLOWS; 4.1. GROUND NOS. 1 & 2: THROUGH THESE GROUNDS OF APPEAL. THE APPELLANT HAS CHALLENGED THE ADDITION OR RS.21,68,083/- OUT OF EXPENSES. THE AO MADE THE ADDITION ON THE GROUND THAT THE HILLS AND VOUCHERS RELATED TO EXPENSES WERE NOT PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS SUBMITTED THAT BILL. BILLS AND VOUCHERS FOR CERTAIN PETTY EXPENSES WERE LYING AT DHAR, ALIRAJPUR, KHARGONE AND KHANDWA. APPELLANT PRODUCED INABILITY TO PRODUCE BILLS AND VOUCHERS FOR VERIFICATION. THE ONUS LIES ON THE APPELLANT TO PROVE THE EXPENSES AS CLAIMED IN THE RETURN OF INCOME THE A.O VIDE ORDER SHEET ENTRY DATED 27/10/2016 A SKED THE APPELLANT TO JUSTIFY THE E XPENSES. THE APPELLANT FAILED TO SUBMIT THE PROOF OF EXPENSES. THEREFORE. THE A.O IS JUSTIFIED IN MAKING DISALLOWANCE OUT OF THE EXPENSES. THEREFORE , THE ADDITION MADE BY THE AO AMOUNTING TO RS.21,68,0873/-IS CONFIRMED . THEREFORE, THE APPEAL ON THESE GROUNDS IS DISMISSED. 6. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE THE TRIB UNAL. SMT. GURPREET KAUR BHATIA ITA NO. 724/IND/2018 4 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BOOKS AND ACCOUNTS ARE REGULARLY MAINTAINED AND WERE AUDITED. LD. A.O HAS NOT REJECTED THE BOOK RESULTS AND THE DISALLOWANCE IS MADE ON ADHOC BASIS AND THE SAME ARE LIABLE TO BE DELETED. THE COMPARATIVE CHART OF THE ALLEGED EXPENSES WERE ALSO REFERRED IN ORDER TO SUPPORT THE CONTENTION THAT THE PERCENTAGE OF THESE EXPENSE S TO SALES REMAINED CONSISTENT AND THERE IS NO ABNORMAL INCREA SE. IN THE PAST NO SUCH DISALLOWANCE WAS MADE. 8. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF LOWER AUTHORITIES. 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US AND GONE THROUGH THE SUBMISSION AN D PAPER BOOK FILED BY THE ASSESSEE. THE SOLE GRIEVANCE OF THE A SSESSEE RELATES TO DISALLOWANCE OF CERTAIN EXPENSES CLAIMED BY THE ASS ESSEE IN THE PROFIT & LOSS ACCOUNT. THE LD. A.O AFTER VERIFICAT ION OF RECORDS OBSERVED THAT WITH RELATION TO THE EXPENSES AMOUNT TO RS.65,04,250/- INCURRED UNDER VARIOUS HEADS, ASSESS EE FAILED TO PRODUCE DETAILS AND VOUCHERS TO PROVE THE GENUINENE SS. LD. A.O MADE 1/3 RD DISALLOWANCE OF THE EXPENSES THEREBY MAKING ADDITI ON TO THE TUNE OF RS.21,68,083/-. SMT. GURPREET KAUR BHATIA ITA NO. 724/IND/2018 5 10. LD. CIT(A) DID NOT GAVE ANY RELIEF TO THE ASSESSE E. BEFORE US THE ASSESSEE HAS PLACED COMPARATIVE CHARTS IN ORDER TO SUBMIT THAT THERE IS NO ABNORMAL INCREASE. IT IS HOWEVER NOTEW ORTHY THAT THE ASSESSEE WAS GIVEN SEVERAL OPPORTUNITY TO PRODUCE B ILLS AND VOUCHERS TO PROVE THE GENUINENESS OF THE EXPENSES W HICH THE ASSESSEE IS DUTY BOUND TO DO SINCE THEY WERE CLAIME D AS AN EXPENSE AGAINST THE REVENUE. 11. IN THESE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE AND BEING FAIR TO BOTH THE PART IES, 15% DISALLOWANCE OF THE IMPUGNED EXPENSES OF RS.65,04,2 50/- WILL BE JUSTIFIED. WE ACCORDINGLY SUSTAIN THE ADDITION TO RS. 9,75,638/-. 12. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY AL LOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 05.02.20 20. SD/- SD/- ( KUL BHARAT) (MANI SH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 05 FEBRUARY , 2020 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE