Delhi Howrah Roadlines Pvt. Ltd., Kolkata V. I.T.O., Ward - 1(1), Kolkata, Kolkata

ITA 726/KOL/2022

AI Insights

The case involves Delhi Howrah Roadlines Pvt. Ltd., which appealed against the order of the National Faceless Appeal Centre (CIT(A)) confirming the disallowance of common lorry expenses amounting to Rs. 15,87,358 for the Assessment Year 2015-16. The primary contention was that the disallowance was ad hoc and no specific defect was pointed out by the lower authorities. The Assessing Officer had disallowed 50% of the claimed expenses due to the assessee's failure to provide detailed substantiation, which was upheld by the CIT(A). However, the Tribunal, after reviewing the submissions and the context, decided to reduce the disallowance to 10% of the claimed expenses, providing significant relief to the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128149 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 26-02-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 13-12-2022
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

आयकर अपीलȣय अͬधकरण, कोलकाता पीठ ‘एसएमसी’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA Įी संजय शमा[, ÛयाǓयक सदèय एवं Įी मनीष बोरड, लेखा सदèय के सम¢ Before Dr. Manish Borad, Accountant Member and Shri Sonjoy Sarma, Judicial Member I.T.A. No.726/Kol/2022 Assessment Year: 2015-16 Delhi Howrah Roadlines Pvt. Ltd.........................................................Appellant 1B, 3 rd Floor, Black Burn Lane, Room No.54, Kolkata. [PAN: AAACD9080A] vs. ITO, Ward-1(1), Kolkata.......................................................................Respondent Appearances by: Shri Sunil Surana, FCA, appeared on behalf of the appellant. Shri Ranu Biswas, Addl. CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : February 27, 2023 Date of pronouncing the order : March 13, 2023 ORDER Per Manish Borad, Accountant Member: This appeal at the instance of the assessee pertaining to the Assessment Year (in short “AY”) 2015-16 is directed against the order of the National Faceless Appeal Centre [in short ld. “CIT(A)”] dated 19.10.2022 arising out of the order u/s 143(3) of the Income Tax Act 1961 (hereinafter referred to as the ‘Act’). 2. Though the assessee has raised as many as ten grounds of appeal, the sole grievance is against the findings of the ld. CIT(A) confirming the disallowance of common expenses on lorry at Rs.15,87,358/-. 3. At the outset, the ld. counsel for the assessee has submitted that the said disallowance is ad hoc in nature and no specific defect has been pointed out by both the lower authorities and therefore, the same should be deleted. I.T.A. No.726/Kol/2022 Assessment Year: 2015-16 Delhi Howrah Roadlines Pvt. Ltd. 2 4. On the other hand, the ld. Departmental Representative submitted that even after giving many opportunities, the assessee failed to file the details of the common lorry expenses of Rs.31,74,716/- and the ld. Assessing Officer was fair enough to make 50% disallowance of the said expenditure. 5. We have heard the rival contentions and perused the records placed before us. The only issue before us is the disallowance of common expenses of lorry at Rs.15,87,358/-. The assessee is in the transport business and has filed nil income for the return in assessment year 2015-16. The assessee furnished audit report along with receipt of lorry hire charges, own lorry, expenses, salary and bonus, lorry hire charges, list of sundry debtors etc. However, the ld. Assessing Officer on examination on accounts, supporting details and documents furnished in respect of assessee company’s accounts and computation, examined the reasons for scrutiny i.e. ‘low profit shown by transporters’ and was satisfied with the claim of the expenses made by the assessee except for the claim of common expenses on lorry at Rs.31,74,716/- as the assessee failed to file details of such expenses. The ld. Assessing Officer concluded the proceedings by disallowing 50% of such expenses. The ld. CIT(A) has confirmed the view of the Assessing Officer. 5.1 We notice that the assessee is a private limited company and has declared nil income for the year under consideration. No details are available on record to show about the gross turnover of the assessee but the huge expenses to the tune of Rs.10.65 crores have been claimed. Though the Assessing Officer was satisfied with the details filed for all the other expenses except for the common expenses for lorry. Before us also, the assessee could not furnish any details of the I.T.A. No.726/Kol/2022 Assessment Year: 2015-16 Delhi Howrah Roadlines Pvt. Ltd. 3 said expenses. No such details were filed before the ld. CIT(A) also. But considering the overall factual matrix and the fact that the assessee has filed sufficient details to explain the major expenses claimed in the audited balance sheet to the satisfaction of the ld. Assessing Officer, we find that the disallowance made by the Assessing Officer is on much higher side and we, therefore, sustain the disallowance to 10% of the total common expenses on lorry of Rs.31,74,716/- and compute the disallowance at Rs.3,17,472/-. Thus the assessee gets relief of Rs.12,69,886/-. The grounds of appeal raised by the assessee are partly allowed. 6. In the result, the appeal of the assessee is partly allowed. Kolkata, the 13 th March, 2023. Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 13.03.2023. RS Copy of the order forwarded to: 1. Delhi Howrah Roadlines Pvt. Ltd 2. ITO, Ward-1(1), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches