Surender Kumar Jain, Delhi V. ACIT, Circle- 58(1), New Delhi

ITA 7877/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9946 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 29-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Keywords: Business income; Salary income; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) (THROUGH VIDEO CONFERENCE ) BEFORE SHRI O.P.KANT, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.7877/DEL./2017 ASSESSMENT YEAR : 2014-15 SURENDER KUMAR JAIN, VS. ACIT, M-1/89, HEMKUNT CHAMBER, CIRCLE-58(1), NEHRU PLACE, NEW DELHI NEW DELHI (PAN : ACXPJ4658G) (APPELLIANT) (RESP ONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI PRAKASH DUBEY, SR. DR DATE OF HEARING : 08.07.2021 DATE OF ORDER : 27.07.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, SURENDER KUMAR JAIN (HEREINAFTER REFER RED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL SOUGH T TO SET ASIDE THE IMPUGNED ORDER DATED 29.09.2017 PASSED BY THE COMM ISSIONER OF INCOME-TAX (APPEALS)-19, NEW DELHI QUA THE ASSESSME NT YEAR 2014-15 ON THE GROUNDS INTER ALIA THAT : 1. THAT THE LD. A.O. AS WELL AS LD. CIT (APPEAL) HAVE FAILED TO APPRECIATE THE PAST HISTORY OF THE ASSESS EE AND THE DETAILS ITA NO.7877/DEL./2017 2 OF THESE EXPENSES SUBMITTED WHILE DISALLOWING 10% B EING RS. 1,92,982/- OF THE FOLLOWING EXPENSES :- - INTEREST ON CAR LOAN 9,856/- - TELEPHONE EXPENSES 2,09,332/- - CONVEYANCE EXPENSES 1,91,505/- - OFFICE EXPENSES 1,63,965/- - PRINTING & STATIONARY EXPENSES 47,455/- - PACKING EXPENSES 2,20,575/- -MISC EXPENSES 42,430/- - MISC EXPENSES 3,50,260/- - SALES PROMOTION EXPENSES 3,50,260/- - STAFF WELFARE EXPENSES 2,76,364/- - VEHICLE RUNNING & MAINTENANCE 3,35,530/- - TOUR & TRAVELLING EXPENSES 82,549/- TOTAL --------------------- 19,29,821/- 2. THAT THE LD. AO AS WELL AS LD. CIT (APPEALS) HAV E EARED WHILE DISALLOWING RS. 1,92,982/- OUT OF THE EXPENSES MENT IONED ABOVE IN PARA 1 IN SPITE OF THE FACT THAT THE TURNOVER HA S GONE UP BY 66%. THE TOTAL SALES FOR THE PERIOD UNDER APPEAL IS RS. 44,46,76,750/- AS AGAINST 26,83,33,887/-. 3. THAT THE ENTIRE ASSESSMENT ORDER AS WELL AS APPE AL ORDER IS WRONG, ARBITRARY, ILLEGAL, UNJUST AGAINST THE FACT AS WELL AS AGAINST THE LAW. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDI CATION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS INDIVIDUAL T AX PAYEE BEING INTO THE BUSINESS OF IMPORT & TRADING OF COMPUTER H ARDWARE UNDER THE NAME AND STYLE OF M/S. BHAVYA INTERNATION AL. ASSESSEE IS ALSO HAVING INCOME FROM SALARY, HOUSE PROPERTY, INC OME FROM BUSINESS OR PROFESSION, INCOME FROM CAPITAL GAIN AN D INCOME FROM OTHER SOURCES. AO NOTICED THAT ASSESSEE SHOWN GROSS PROFIT OF RS. 1,45,72,231/- AND HAS DECLARED NET PROFIT O F RS.42,26,345/-. ASSESSING OFFICER VERIFIED VARIOUS EXPENSES CLAIMED BY ASSESSEE TO THE TUNE OF RS. 21,56,071/-. AO IN THE ABSENCE O F EXPLANATION BY THE ASSESSEE TO PROVE THE NATURE AND VERACITY OF TH E EXPENSES ITA NO.7877/DEL./2017 3 PROCEEDED TO DISALLOWED 20% OF THE EXPENSES I.E. RS . 4,31,216/- AND THEREBY ASSESS THE TOTAL INCOME OF RS. 51,32,99 0/-. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A ) BY WAY OF FILING THE APPEAL WHO HAS RESTRICTED THE DISALLOWAN CE MADE BY THE AO TO 10% OF THE EXPENSES CLAIMED BY THE ASSESSEE BY PARTLY ALLOWING THE APPEAL. FEELING AGGRIEVED THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT AP PEAL. 4. ASSESSEE HAS NOT PREFERRED TO PUT IN APPEARANCE DESPITE ISSUANCE OF THE NOTICE AND CONSEQUENTLY, WE PROCEED ED TO DECIDE THE PRESENT APPEAL WITH THE ASSISTANCE OF THE LD. D R AS WELL AS ON THE BASIS OF DOCUMENTS AVAILABLE ON THE FILE. 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. WE HAVE PERUSED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) WHO HAS RESTRICTED THE DISALLOWANCE MADE BY THE AO TO 10% FROM 20% . IT WAS THE CASE OF ASSESSEE BEFORE T HE LD. CIT(A) THAT THE NATURE OF EXPENSES CLAIMED UNDER THE HEAD CONVEYANCE EXPENSES, OFFICE EXPENSES, PRINTING & STATIONERY EX PENSE, PACKING EXPENSES, MISCELLANEOUS EXPENSES, SALES PROMOTION E XPENSES, STAFF WELFARE EXPENSE, VEHICLE RUNNING & MAINTENANC E, AND TOUR ITA NO.7877/DEL./2017 4 & TRAVELLING EXPENSES COULD NOT BE EXPLAINED BECAU SE THE PRINTED VOUCHERS ARE NORMALLY NOT AVAILABLE BUT THE CASE OF THE ASSESSEE IS COVERED ON THE TAX AUDIT REPORT U/S 44A B. THE ASSESSEE HAS ALSO BROUGHT ON RECORD COMPARATIVE TABLE AS TO THE EXPENSES CLAIMED IN THE EARLIER YEARS VIS-A-VIS YEAR UNDER C ONSIDERATION AS UNDER :- 6.2 PARTICULARS A.Y 2014- 15 % AY 2013-14 % SALES (RS. IN LACS) 4446.76 2683.34 OFFICE EXPENSES 1,63,965 0.04 1,56,294 0.06 PRINTING & STATIONERY EXPENSES 47,455 0.01 28,720 0.01 PACKING EXPENSES 2,20,575 0.05 14,210 0.01 SALES PROMOTION EXPENSES 3,50,260 0.08% 10,308 0.001 STAFF WELFARE EXPENSES 2,76,364 0.06 89,546 0.03 VEHICLE RUNNING & MAINTENANCE EXPENSES 3,35,530 0.08 56,570 0.02 TOUR & TRAVELLING EXPENSES 82,549 0.02 1,51,805 0.06 7. KEEPING IN VIEW THE ARGUMENT ADDRESSED BY THE AS SESSEE BEFORE LD. CIT(A), THE EXPENSES CLAIMED IN THE EARL IER YEAR AND THE FACT THAT ASSESSEES CASE IS COVERED UNDER TAX AUDIT REPORT, WE ARE OF THE CONSIDERED VIEW THAT DISALLOWANCE IN THI S CASE SHOULD BE TO THE EXTENT OF 5% OF THE EXPENSES CLAIMED KEEPIN G IN VIEW THE ITA NO.7877/DEL./2017 5 PERSONAL ELEMENT INVOLVED TO MEET WITH THE ENDS OF JUSTICE. CONSEQUENTLY, APPEAL FILED BY THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 27 TH DAY OF JULY, 2021. SD/- SD/- (O.P.KANT) (KULDIP SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 27 TH DAY OF JULY, 2021 BINITA COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.