Senthilnathan Valliappan, CHENNAI V. ACIT, CHENNAI

ITA 790/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7552 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 24-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 30-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C. YAMUNA
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 143(1); 201; 143(2)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 790 /MDS/2016 / ASSESSMENT YEAR :20 11 - 12 SHRI SENTHILNATHAN VALLIAPPAN, 19/4, STRINGER STREET, CHENNAI 600 001. [PAN:A A DPV9074G ] VS. THE INCOME TAX OFFICER , BUSINESS WARD IX ( 3 ) CHENNAI . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE / RESPONDENT BY : MS. C. YAMUNA, JCIT / DATE OF HEARING : 0 5 . 12 .201 6 / DATE OF P RONOUNCEMENT : 03 . 0 3 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1 3 , CHENNAI DATED 29 . 0 1 .20 16 RELEVANT TO THE ASSESSME NT YEAR 20 11 - 12 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING THE DISALLOWANCE OF .2,46,816/ - BEING EXPENSES INCURRED UNDER VARIOUS HEADS. I.T.A. NO . 790 /M/ 16 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A WHOLESALER IN PAPERS AND FILED HIS RETURN OF INCOME ON 14.11.2011 DECLARING TOTAL INCOME AT .10,74,960/ - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT]. THEREAFTER, THE CASE OF THE AS SESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND SERVED ON 13.09.2012. THE ASSESSEE PRODUCED BOOKS OF ACCOUNTS AND RELEVANT DOCUMENTS AND THE SAME WERE EXAMINED. AFTER SCRUTINIZING THE DETAILS FURNISHED BY THE ASSE SSEE, THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 31.03.2014 ASSESSING TOTAL INCOME OF THE ASSESSEE AT .13,98,766/ - AFTER MAKING DISALLOWANCE OF VARIOUS EXPENSES INCURRED BY THE ASSESSEE ON THE GROUND THAT SOME OF THE BILLS ARE SELF MADE . 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELO W. ADMITTEDLY, THE ASSESSEE IS A WHOLESALER IN PAPER AND TO DO THE BUSINESS, THE ASSESSEE IS REQUIRED TO INCUR VARIOUS EXPENSES SUCH AS LORRY FREIGHT, BUSINESS PROMOTION EXPENSES, I.T.A. NO . 790 /M/ 16 3 OFFERING DISCOUNT, VEHICLE/OFFICE MAINTENANCE, ELECTRICITY CHARGES, ETC. WHICH WERE NOT OBJECTED IN TOTO, BUT SINCE THE ASSESSEE HAS PRODUCED SELF MADE VOUCHERS, THE ASSESSING OFFICER PROPORTIONATELY ESTIMATED THE EXPENSES AND MADE THE DISALLOWANCES OF VARIOUS EXPENSES . THE ASSESSEE HAS CLAIMED FOLLOWING EXPENSES INCURRED DURING THE COURSE OF HIS BUSINES : 1. LORRY FREIGHT . 26,34,385/ - 2. BUSINESS PROMOTION EXPENSES . 1,29,266/ - 3. DISCOUNT PAID . 2,05,954/ - 4. VEHICLE MAINTENANCE . 2,40,214/ - 5. OFFICE MAINTENANCE . 65,941/ - 6. ELECTRICITY BILL . 1,18,547/ - 6. FROM THE ABOVE, WE FIND THAT THE ABOVE EXPENSES ARE IN LINE OF ASSESSEE S BUSINESS AND THE ASSESSING OFFICER HAS NOT PROPERLY ESTIMATED THE EXPENSES. THE AUTHORITIES BELOW HAVE PRESUMED THAT THE ASSESSEE WOULD HAVE INCURRED EXPENSES OF ASSESSEE S SISTER CONCERN, WHICH CANNOT BE ACCEPTED IN THE ABSENCE OF ANY EVIDENCE. THUS, WE ARE OF THE OPINION THAT DISALLOWANCE OF 50% OF THE EXPENSES CLAIMED IN SL. NO. 1 TO 5 BY THE ASSESSEE WOULD BE MORE REASONABLE AND, WE DIRECT THE ASSESSING OFFICER TO RECOMPUTE ACCORDINGLY. WITH REGARD TO ELECTRICITY CHARGES, THE ACTUAL EXPENSES AGAINST THE ORIGINAL BILLS SHOULD BE ALLOWED. IF THE ASSESSEE FAILS TO PRODUCE ORIGINAL BILL FOR ELECTRICITY CHARGES, THEN THE ENTIRE CLAIM OF THE ASSESSEE SHOULD BE DISALLO WED. THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO . 790 /M/ 16 4 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 03 RD MARCH , 201 7 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMO NY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 03 . 0 3 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.