M/s. Guru Maharaj Construction, Cuttack v. ACIT, Cuttack

ITA 35/CTK/2015 | 2010-2011
Pronouncement Date: 18-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 3522114 RSA 2015
Assessee PAN AAGFG1016L
Bench Cuttack
Appeal Number ITA 35/CTK/2015
Duration Of Justice 1 year(s) 9 month(s) 3 day(s)
Appellant M/s. Guru Maharaj Construction, Cuttack
Respondent ACIT, Cuttack
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 18-10-2016
Assessment Year 2010-2011
Appeal Filed On 15-01-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH CUTTACK BEFORE SHRI N.S SAINI ACCOUNTANT MEMBER ITA NO.35 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 M/S. GURU MAHARAJ CONSTRUCTION PRATIVA NIWAS AURONODAYA NAGAR LINK ROAD CUTTACK - 12. VS. ACIT CIRCLE - 2(1) CUTTACK PAN/GIR NO. AAGFG 1016 L (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SASWAT ACHARYA AR REVENUE BY : SHRI D.K.PRADHAN DR DATE OF HEARING : 18 /10/ 2016 DATE OF PRONOUNCEMENT : 18 /10/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - CUTTACK DATED 7.12.2014 FOR THE ASSESSMENT YEAR 2010 - 2011. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ADHOC DISALLOWANCE OF RS.5 43 176/ - UNDER THE FOLLOWING HEADS: 1) DISALLOWANCE U/S.40A(3) : RS. 23 580/ - 2) DISALLOWANCE ON BUSINESS PROMOTION : RS. 87 220/ - 3) DISALLOWANCE ON LABOUR CHARGES : RS.1 02 422/ - 4) DISALLOWANCE ON DAILY WAGES : RS.1 39 954/ - 5) DISALLOWANCE ON REPAIR & MAINT. : RS. 60 000/ - 2 ITA NO.35 /CTK/2015 ASSESSMENT YEAR :2010 - 2011 6) DISALLOWANCE ON FUEL & LUBRICANTS : RS. 80 000/ - 7) DISALLOWANCE ON FOODING & MESS CHARGES: RS. 50 000/ - 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER MADE THE DISALLOWANCE OF RS.23 580/ - FOR EXPENSES INCURRED IN CASH IN VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. THE AO ALSO OBSERVED THAT THE ASSESSEE HAS CLAIMED VARIOUS EXPENSES UNDER THE FOLLOWING HEADS: A) BUSINESS PROMOTION ; RS.8 72 195/ - B) LABOUR CHARGES : RS.20 48 440/ - C) DAILY WAGES : RS.27 99 071/ - D) REPAIR & MAINTENANCE : RS.36 98 349/ - E) FUEL & LUBRICANTS : RS.49 87 716/ - F) FOODING & MESS CHARGES : RS.36 35 769/ - THE AO ALSO OBSERVED THAT THE ASSESSEE COULD NOT PRODUCE ALL THE BILLS AND VOUCHERS FOR THE EXPENSES CLAIMED. ACCORDINGLY HE MADE DISALLOWANCE ON ESTIMATED BASIS @ 10% OF EXPENSES UNDER THE HEAD BUSINESS PROMOTION AND DISALLOWED RS.87 220/ - . SIMILARL Y HE MADE DISALLOWANCE @ 5% OF EXPENSES UNDER THE HEAD LABOUR CHARGES OF RS.20 48 440/ - AND DISALLOWED RS.1 02 422/ - . ON THE SAME BASIS HE DISALLOWED 5% OF EXP ENSES UNDER THE HEAD DAILY WAG ES OF RS.27 99 071/ - AND MADE A DISALLOWANCE OF RS.1 49 954 / - . SIMILARLY HE MADE ADHOC DISALLOWANCE OF RS.60 000/ - OUT OF REPAIR & MAINTENANCE EXPENSES OF RS.36 98 349/ - AND DISALLOWANCE OF RS.80 000/ - OUT OF EXPENSES CLAIMED UNDER THE HEAD FUEL & LUBRICANTS OF RS.49 87 716/ - AND ALSO MADE 3 ITA NO.35 /CTK/2015 ASSESSMENT YEAR :2010 - 2011 DISALLOWANCE OF R S.50 000/ - OUT OF EXPENSES CLAIMED UNDER THE HEAD FOODING & MESS CHARGES OF RS.36 35 769/ - . 4. ON APPEAL THE LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. AT THE TIME OF HEARING LD A.R. OF THE ASSESSEE SUBMITTED THAT ADHOC DISALLOWANCE MADE BY THE AO OUT OF BUSINESS EXPENSES CLAIMED BY THE ASSESSEE WAS MUCH HIGHER AND PRAYED THAT THE SAME MAY BE REDUCED TO A REASONABLE EXTENT. 6. ON THE OTHER HAND LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. I FIND THAT THE AO HAS MADE ESTIMATE D DISALLOWANCE OUT OF BUSINESS EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD BUSINESS PROMOTION LABOUR CHARGES DAILY WAGES REPAIR & MAINTENANCE FUEL & LUBRICANTS AND FOODING & MESS CHARGES ON THE GROUND THAT ALL VOUCHERS FOR THE EXPENSES C LAIMED COULD NOT BE PRODUCED BY THE ASSESSEE. THE AO HAS NOT SPECIFIED WHICH VOUCHERS FOR THE EXPENSES COULD NOT BE PRODUCED BY THE ASSESSEE. WITHOUT DOING SO HE HAS MADE ESTIMATED DISALLOWANCE OF GENUINE BUSINESS EXPENSES CLAIMED BY THE ASSESSEE WHICH IS NOT PERMITTED IN LAW. HOWEVER DURING THE COURSE OF HEARING LD A.R. OF THE ASSESSEE HAS ALSO NOT DISPUTED THE OBSERVATION OF THE AO THAT ALL VOUCHERS OF THE EXPENSES CLAIMED COULD NOT BE PRODUCED BEFORE THE AO FOR VERIFICATION. THE ONLY SUBMISSION O F LD A.R. OF THE ASSESSEE IS THAT THE ADHOC DISALLOWANCE OF RS.5 43 176/ - MADE OUT OF BUSINESS EXPENSE S CLAIMED BY THE ASSESSEE WAS ON A HIGHER SIDE. I AM OF THE CONSIDERED VIEW THAT IT WILL MEET THE ENDS OF JUSTICE IF THE DISALLOWANCE OUT OF BUSINESS E XPENSES CLAIMED BY THE ASSESSEE IS 4 ITA NO.35 /CTK/2015 ASSESSMENT YEAR :2010 - 2011 REDUCED TO RS.4 00 000/ - . I ORDER ACCORDINGLY AND THE ASSESSEE GETS RELIEF OF RS.1 43 176/ - . 8. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 18 /10/2016 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 18 /10 /2016 B.K.PARIDA SPS COPY OF THE ORDER FORWARDED TO : BY ORDER ASST.REGISTRAR ITAT CUTTACK 1. THE APPELLANT : M/S. GURU MAHARAJ CONSTRUCTION PRATIVA NIWAS AURONODAYA NAGAR LINK ROAD CUTTACK - 12. 2. THE RESPONDENT. ACIT CIRCLE - 2(1) CUTTACK 3. THE CIT(A) CUTTACK 4. CIT CUTTACK 5. DR ITAT CUTTACK 6. GUARD FILE. //TRUE COPY//