Convent of Sacred Heart Society, Ambala Cantt. V. Deputy Commissioner of Income Tax, Ambala

ITA 849/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8385 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 12-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• 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; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO.849/CHD/2016 (ASSESSMENT YEAR : 2010-11) CONVENT OF SACRED HEART SOCIETY, VS. THE D.C.I.T., AMBALA CANTT. AMBALA PAN: AAAAC3829L (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI AJAY JAIN ROHIIT KAURA RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 24.01.2017 DATE OF PRONOUNCEMENT : 24.01.2017 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 6.5.2016 OF LEARNED COMMISS IONER OF INCOME TAX (APPEALS), PANCHKULA RELATING TO ASSE SSMENT YEAR 2010-11. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPE AL RELATES TO SUSTENANCE OF ADDITION MADE BY THE ASSES SING OFFICER BY DISALLOWING THE EXPENDITURE/APPLICATION OF INCOME ON CONSTRUCTION OF BUILDING ON THE BASIS OF NON- VERIFICATION OF PETTY EXPENDITURE. 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE WAS HAVING INCOME FROM RUNNING OF SCHOO L AND 2 FILED ITS RETURN OF INCOME ON 6.9.2010 DECLARING NI L INCOME. THE ASSESSEE CLAIMED EXEMPTION OF ITS INC OME UNDER SECTION 10(23C)(VI) OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT). THE ASSESS ING OFFICER, HOWEVER, DISALLOWED THE EXPENDITURE OF RS.11,60,560/- OUT OF RS.18,67,404/- INCURRED BY TH E ASSESSEE ON ACCOUNT OF NON-VERIFIABLE BUILDING REPA IR AND MAINTENANCE EXPENDITURE. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R TO THE LD. CIT (APPEALS) AND SUBMITTED THAT THE ASS ESSEE IS A CHARITABLE SOCIETY TO WHOM EXEMPTION UNDER SEC TION 10(23C)(VI) OF THE ACT WAS ALLOWED AND DURING THE C OURSE OF ASSESSMENT PROCEEDINGS BOOKS OF ACCOUNT WERE PRODUCED WHICH WERE EXAMINED BY THE ASSESSING OFFIC ER WHO RAISED THE DOUBT ABOUT THE EXPENDITURE ON THE BUILDING BY STATING THAT VOUCHERS WERE SELF PREPAR ED. THE ASSESSING OFFICER DISALLOWED ABOUT 5% OF THE EXPEND ITURE AMOUNTING TO RS.11,60,560/- AND ACCEPTED THE REMAIN ING 95% CONSIDERING THE SAME TO BE GENUINE. IT WAS FUR THER STATED THAT IF THERE WAS ANY DISCREPANCY, IT WAS ON LY TECHNICAL DEFICIENCY IN VOUCHERS ON WHICH ADDRESS W AS NOT AVAILABLE OR THOSE WERE NOT PRINTED BUT THE SAME SH OULD NOT LEAD TO ANY ADVERSE INFERENCE. 5. THE LD. CIT (APPEALS), HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE BY OBSERVI NG THAT 3 THE EXPLANATION OF THE ASSESSEE WAS SIMPLY TO COVER UP THE CLAIM OF EXPENDITURE WHICH WAS NOT BACKED BY ANY EVIDENCE AND THAT THE ASSESSEE HAD NOT FURNISHED ANY FURTHER EVIDENCE REGARDING THE GENUINENESS OF THE EXPENDITURE. 6. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BE FORE THE LOWER AUTHORITIES THE LD. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVA ILABLE ON RECORD. IN THE PRESENT CASE, IT APPEARS THAT TH E ASSESSING OFFICER MADE ADHOC DISALLOWANCE ON THE BA SIS THAT THE VOUCHERS WERE SELF PREPARED BUT HE HAD NOT BROUGHT ANY MATERIAL ON RECORD TO SUBSTANTIATE THAT THE ASSESSEE DID NOT INCUR THOSE EXPENSES ON ACCOUNT OF BUILDING REPAIRS AND MAINTENANCE AND EVEN THE BOOKS OF ACCOUNT WERE ACCEPTED. IN MY OPINION, IN SUCH TYPE OF CASES, THE LEAKAGE OF REVENUE CANNOT BE RULED OUT B UT AT THE SAME TIME IN THE ABSENCE OF SPECIFIC FINDING TH AT THE ASSESSEE HAD NOT INCURRED EXPENDITURE, THE DISALLOW ANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT (APPEALS) APPEARS TO BE ON HIGHER SIDE. THEREF ORE, TO MEET THE END OF JUSTICE, I DEEM IT APPROPRIATE TO R ESTRICT THE DISALLOWANCE TO RS.3 LACS TO COVER UP THE LEAKA GE OF THE REVENUE, IF ANY. 4 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.01.2017. SD/- (N.K. SAINI) ACCOUNTANT MEMBER DATED : 24 TH JANUARY, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH