Salgaocar Engineers Pvt. Ltd, Panaji V. Assistant Commissioner of Income Tax, Circle - 1, Margao

ITA 87/PAN/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1560 (ITAT-PANAJI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 02-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SHRIKANTH
• Keywords: Corroborative evidences; TDS

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH : : PANAJI [VIRTUAL HEARING AT PUNE] BEFORE SHRI SATBEER SINGHGODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA No.87/PAN/2024 Assessment Year - 2010-2011 Salgaocar Engineers Pvt. Ltd., Salgaocar Bhavan, Altinho, Panaji, Goa – 403001. PAN: AABCS8861R vs . The Assistant Commissioner of Income Tax, Circle-1, Margao. Appellant Respondent Assessee by Shri Sukhsagar Syal, AR Revenue by Shri N Shrikanth, D.R. Date of hearing 13.06.2024 Date of pronouncement 20.06.2024 ORDER PER SATBEER SINGH GODARA, J.M: This assessee’s appeal for assessment year 2010- 2011 arise against the order National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2023-24/1060532282(1) dated 06.02.2024, involving proceedings u/s.144 of the Income Tax Act, 1961 (in short “the Act”). Heard both the parties. Case file perused. 2. The assessee pleads the following substantive grounds in the instant appeal : 2 ITA.No.87/PAN./2024 “1. On the facts and circumstances of the case and in law, the ld.CIT(A) erred in confirming the disallowance of expenses to the extent of 20% on an ad-hoc basis. 2. On the facts and circumstances of the case and in law, the ld.CIT(A) erred in holding that the Appellant had not complied with the notices issued in the course of the assessment proceedings. 3. On the facts and circumstances of the case and in law, the ld.CIT(A) confirmed the disallowance to the extent of 20% without considering or even adverting to the evidence filed before it. 4. On the facts and circumstances of the case and in law, the ld.CIT(A) ought to have appreciated that as the Assessing Officer, in his remand report had not adversely commented upon and therefore accepted the evidence filed by the Appellant, there was no occasion to confirm disallowance of expenditure. 5. The appellant craves leave to add to or amend the aforesaid grounds.” 3. Both the learned representatives next invited our attention to the CIT(A)'s lower appeal discussion restricting the Assessing Officer’s action disallowing the assessee’s impugned expenditure claim(s) @ 40% to that @ 20% only as under : “6. Ground No.2 : 3 ITA.No.87/PAN./2024 6.1. This ground of appeal relates to disallowance of 40% of the expense and even auditors remuneration is cut by 40% and all the expenses of the audited accounts has been reduced by 40% and 60% allowed. The contention of the appellant is first of all general in nature and places extreme reliance on audited accounts. It is the duty of the appellant to furnish complete details before the Ld.AO during the assessment proceedings showing the nature of expenses, name, PAN and address of the party, amount of expenses, TDS deducted, relevant ledger accounts and bank statements along with bills and invoices etc. If the said details and documents are not furnished, the AO cannot be faulted with for making 40% adhoc disallowance. 6.2. Further, it is to mention that facts borne out from records clearly indicate that the appellant could not substantiate the above said expenses debited into P & L account with necessary supporting bills and vouchers, it is also an admitted fact that appellant has failed to file necessary bills and vouchers to justify said expenses debited into P&L account. Although, the appellant claims that relevant records were voluminous and the director of the appellant was suffering from adverse health conditions, but said claim is not substantiated by any evidences. Therefore, I am of the of the considered view 4 ITA.No.87/PAN./2024 that when the appellant is unable to justify the above said expenses with supporting evidences, then the AO is having every right to dispute expenses debited into P & L account. At the same time, the AO had made adhoc disallowance of above said expenses without recording any adverse comments on books of accounts maintained by appellant for the relevant assessment year. Further, the AO has not disputed pleading of appellant that the auditor has given clean chit to the books of accounts maintained by appellant and has not made any adverse comments on above said expenses debited into P&L account. Under these circumstances, considering the nature of expenses and the audited financial statements of the appellant, the adhoc disallowance of 40% is restricted to 20% in order to meet ends of justice.” This leaves the assessee aggrieved. 4. Learned counsel representing the assessee vehemently argued during the course of hearing that both the lower authorities have erred in law and on facts in disallowing the assessee’s impugned expenditure claim(s) @ 40% in the course of assessment to 20% in the lower appeal proceedings extracted herein. Mr. Syal took us to the assessee’s detailed paper book running into 165 pages, and more particularly, the Assessing Officer’s sec.142(1) notices dated 07.05.2012, 5 ITA.No.87/PAN./2024 23.10.2012 and 18.01.2013, respectively. He further referred to the assessee’s reply(ies) thereto dated 02.05.2012, 31.01.2013 and 21.03.2013 duly explaining all the relevant details of the impugned expenditure claim(s). Learned counsel accordingly submitted that once the Assessing Officer herein had nowhere asked the assessee to place on record all the bills and vouchers specifically in either of his foregoing notices; the impugned expenditure claim(s) could not be disallowed for this sole reason. We put up a specific question to Mr. Syal as to whether the assessee had in fact placed on record the relevant bills and vouchers or not ? The reply received is in negative only. 5. We granted sufficient opportunities to the department. The Revenue vehemently supported the learned CIT(A)'s action restricting the impugned disallowances from 40% to 20% only. Mr. Shrikanth highlighted the fact that the learned lower authorities have already been too much magnanimous in assessee’s case once they have accepted 80% of the impugned expenditure claim(s). 6. We have given our thoughtful consideration to the vehement rival stands and find no reason to accept either parties contentions in entirety so far as the impugned expenditure disallowance of 20% is concerned. We make it clear that it was the bounden duty of the assessee only to 6 ITA.No.87/PAN./2024 discharge it’s onus by filing atleast the basic documents i.e., the corresponding bills and vouchers. We wish to clarify that learned counsel has also raised an additional submission that assessee is very much ready and willing to get everything verified afresh if granted one more effective innings before the assessing authority. The fact also remains that the assessee’s impugned expenditure claim(s) disallowance stands accepted to the extent of 80% in the learned CIT(A)'s lower appellate discussion. Faced with this situation and in light of the fact that we are in assessment year 2010-2011 and much water has flown down the stream since then, it is deemed appropriate in larger interest of justice to restrict the impugned disallowance @ 20% to that @ 10% only with a rider that the same shall not be treated as a precedent in the peculiar facts and circumstances of the case. Necessary computation shall follow as per law. Ordered accordingly. 7. This assessee’s appeal is partly allowed in above terms. Order pronounced in the open Court on 20.06.2024. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 20 th June, 2024 VBP/- 7 ITA.No.87/PAN./2024 Copy to 1. The appellant 2. The respondent 3. The Pr. CIT, Panaji concerned 4. D.R. ITAT, Panaji-Bench, Panaji. 5. Guard File. //By Order// //True Copy // Sr. Private Secretary, ITAT, Pune Benches, Pune.