M/S FAIRDEAL MOTORS & WORKSHOP, SRINAGAR V. ASSISTANT COMMISSIONER OF INCOME TAX, SRINAGAR

ITA 794/ASR/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0523 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-12-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 27-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARESH KUMAR BHAGAT

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N. K. CHOUDHRY, JUDICIAL MEMBER AND SH. O. P. MEENA ACCOUNTANT MEMBER I.T.A. NO. 794/ASR/2017 AS SESSMENT YEAR: 2013-14 M/S FAIRDEAL MOTORS & WORKSHOP PVT. LTD., PARIMPORA, SRINAGAR [PAN: AAACF 6573E] VS. A.C.I.T., CIRCLE-3, SRINAGAR (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SH. NARESH KUMAR BHAGAT (DR) DATE OF HEARING: 16.12.2019 DATE OF PRONOUNCEMENT: 16.12.2019 ORDER PER O. P. MEENA, AM: THIS APPEAL BY THE ASSESSEE IS FILED AGAINST THE OR DER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, JALANDHAR ( CAMP OFFICE AT SRINAGAR) DATED 24.11.2017 FOR THE ASSESSMENT YEAR 2013-14. 2. THOUGH THE ASSESSEE HAS TAKEN AS MANY AS SEVEN N UMBER OF GROUNDS OF APPEAL, HOWEVER, IN THE SUBSTANCE THESE ARE AGAINST CONFIRMATION OF DISALLOWANCE AT THE RATE OF 5% OUT OF EXPENSES OF RS.6,144,794/-. A S THE SAME ARE BEING CONSIDERED TOGETHER. 3. BRIEFLY STATED AS THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS DEBITED EXPENSES AMOUNTING TO RS.6,144,794/- IN THE P&L ACC OUNT WHICH WERE NOT FOUND ITA NO. 794/ASR/2017 (AY 2013-14) M/S FAIRDEAL MOTORS & WORKSHO P PVT. LTD. V. ACIT 2 SUPPORTED WITH PROPER VOUCHERS. THEREFORE, THE AO H AS DISALLOWED THE 5% OF THE SAME WHICH WORKED OUT TO RS.3,07,240/- AND ACCORDIN GLY MADE THE ADDITION OF THE SAME. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(APPEAL). HOWEVER THE CIT(APPEAL) OBSERVED THAT THE DISALLOWA NCE HAS BEEN MADE BY THE AO ON ACCOUNT OF NON PRODUCTION OF COMPLETE SUPPORT ING VOUCHERS FOR THE EXPENSES CLAIMED IN THE P&L ACCOUNT. THEREFORE, CIT ING VARIOUS DECISIONS OF ITAT AMRITSAR, DISALLOWANCE MADE @ 5% OF EXPENSES BY THE AO WAS CONFIRMED. 5. BEING AGGRIEVED THE ASSESSEE FILED THIS APPEAL B EFORE THIS TRIBUNAL. HOWEVER, NONE FROM THE SIDE OF THE ASSESSEE HAS REP RESENTED BEFORE THE TRIBUNAL THOUGH THE HEARING WAS ADJOURNED ON 24.10.2019 TO 1 6.12.2019. 6. PER CONTRA THE LEARNED SR. DR SUPPORTED THE ORDE R OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. HOWEVER, NONE FOR THE ASSESSEE HAS APPEARED BEFORE US BUT IT IS DISCERNIBLE FROM THE GROUNDS OF APPEAL OF THE ASSESSEE, THAT TH E AO MADE LUMP SUM DISALLOWANCE AT THE RATE OF 5% OF THE EXPENSES TO C OVER THE LEAKAGE OF THE REVENUE. HOWEVER, THE AO HAS NOT AFFORDED ANY OPPORTUNITY OF HEARING PRIOR TO A MAKING SUCH DISALLOWANCE, WHEREAS THE ASSESSEE HAS PRODUCE D BOOKS OF ACCOUNT BEFORE THE AO IN WHICH NO DISCREPANCY WAS POINTED OUT BY THE A O. ON GOING THROUGH, THE WRITTEN SUBMISSION OF THE ASSESSEE, AS REPRODUCED I N PARA 10 OF THE APPELLATE ORDER, WE FIND THAT THE ASSESSEE HAS PLACED RELIANCE IN TH E CASE OF ANSARI MOTORS OF ITAT AMRITSAR BENCH IN WHICH SIMILAR CIRCUMSTANCES, SUCH DISALLOWANCES OF EXPENSES WERE MADE AS ON ACCOUNT OF ESTIMATED BASIS WERE NOT FOUND SUSTAINABLE. HOWEVER, CONSIDERING THE FACTS THAT THE AO HAS EXAMINED THE VOUCHERS PRODUCED BEFORE HIM AND FOUND THAT THE SAME ARE NOT COMPLETE, THEREFORE IN THE INTEREST OF JUSTICE AND ITA NO. 794/ASR/2017 (AY 2013-14) M/S FAIRDEAL MOTORS & WORKSHO P PVT. LTD. V. ACIT 3 FAIR PLAY AND CONSIDERING THE DECISION OF COORDINAT E BENCH OF ITAT AMRITSAR (SUPRA). WE RESTRICT THE DISALLOWANCE OF THE TOTAL EXPENSES TO 2% OF THE EXPENSES CLAIMED BY THE ASSESSEE. IN VIEW OF THESE FACTS, TH E APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 16, 2019 SD/- SD/- (N. K. CHOUDHRY) (O. P. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 16.12.2019 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: (2) THE RESPONDENT: (3) THE CIT(APPEALS), (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER