Abdul Samad & Sons Vs ITO (ITAT Amritsar)
From the finding of Ld. CIT(A), it is clear that the finding is based on the premise that the assessee failed to substantiate the expenditure however the contention of the assessee is that due to flood material evidences was washed away and FIR was duly registered, further it is stated that the accounts of the assessee was duly audited and no adverse observation has been recorded by the auditors. Looking to the facts of the present case and more particularly the contention of the assessee that the record was washed away due to flood and coupled with the fact that there is no adverse inference by the auditors. I am of the considered view that it is a liberal view ought to have been adopted by the authorities below. Moreover the authorities below have not pointed out any specific absence of the vouchers hence. Therefore, considering totality of facts I hereby direct the AO to delete the addition.
ITAT deletes addition made for
Material evidences washed away due Flood – ITAT deletes addition
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
The appeal by the assessee is directed against the order dated 28.02.2018, passed by the Ld. Commissioner of Income Tax (Appeals)-2, Jalandhar (Camp office at Srinagar), pertaining to the Assessment Year 2013-14.
2. The assessee has raised the following grounds of appeal:
“1. On circumstances and facts of the case, the worthy CIT (A) has erred in sustaining a part of the addition to the extent of Rs. 2,19,785/- out of Rs. 3,29,677/- made by Ld. ITO on the ground of non-availability of vouchers etc. in support of expenses claimed in books of account.
2. The worthy CIT(A) has erred in partly upholding the action of Ld. ITO as stated in (1) above without appreciating the fact that Ld. ITO has not specifically pointed to any particular voucher or documentary evidence not made available to him.
3. On circumstances and facts of the case, the worthy CIT (A) has erred in not appreciating the fact that the additions made by Ld. ITO were made in a routine & perfunctory manner without application of mind & deserved to be deleted in toto and not in part.
4. On circumstances and facts of the case, the worthy CIT (A) has erred in not appreciating the fact that the additions made by Ld. ITO were made merely on the pretext that the net profit rate of the assessee in the under assessment had decreased in comparison to immediately preceding year. However, the assessee in the written arguments before the worthy CIT (A) has clearly demonstrated that the finding of Ld. ITO is not correct & as such deserved to be deleted in toto and not in part.
5. On circumstances and facts of the case, the worthy CIT (A) has erred in not appreciating the fact that the Ld. ITO has wrongly considered “Branch Office Expenses” for addition purposes which were not even claimed by the assessee in the year under assessment and pertain to AY 12-13. This makes it clear that the additions made by Ld. ITO were made in a routine & perfunctory manner without application of mind & deserved to be deleted in toto and not in part.
6. The worthy CIT(A) has also erred in referring to cases decided by Hon’ble ITAT Amritsar Bench in support of his judgment without quoting such cases in detail, the issues & nature of expenses involved in such cases. He has also erred to appreciate that most of the expenses targeted by Ld. ITO like travelling & tours, loading & unloading, vehicle maintenance, electricity & water expenses, freight & carriage, repairs & renewals, branch office expenses etc do not contain any personal element and cannot be subject to any disallowance on % basis. Further, TDS wherever applicable has been adequately deducted.
7. The appellant craves leave to add, alter, modify or modify the grounds of appeal.”
3. The facts giving rise to the present appeal are that the assessee is a partnership firm has been carrying out its business under the name of ‘M/s Kashmir Motors’ for the year under consideration. The assessee filed its return of income through electronic mode declaring an income of Rs.6,89,072/-. The case was selected for scrutiny assessment under the ‘CASS’, thereafter the Assessing Officer proceeded to frame assessment u/s 143(3) of the Income Tax Act, 1961. By framing the assessment, the Assessing Officer made ad-hoc disallowances in respect of vehicle maintenance, loading and unloading expenses etc. @ of 15%. Thus, the Assessing Officer made disallowance of Rs.3,29,677/- and added this into the income of the assessee.
4. Aggrieved, against this the assessee preferred an appeal before the Ld. CIT(A) who after considering the submissions and material placed before him sustained the addition to the extent of 10% of the expenses. Thus, the appeal of the assessee was partly allowed.
5. Aggrieved, against this the assessee is in appeal before this Tribunal. At the time of hearing no one attended the proceedings on behalf of the assessee, however the assessee has filed written arguments, therefore, the appeal is taken up for hearing in the absence of assessee and is being decided on the basis of material available on record.
6. The only effective ground is against sustaining the addition made on account of ad-hoc disallowance of the expenses. The assessee has filed written arguments for the sake of clarity, the written arguments of the assessee are reproduced as under:
“Written Arguments before Hon’ble ITAT in respect of
APPEAL NO. ITA 315/Asr/2018
M/S ABDUL SAMAD &SONS,H.S.H STREET, SRINAGAR KASHMIR-ASSTT.
YEAR 2013-14
Your Honour,
This is an appeal against the order of the worthy CIT(A),Jammu dated 28-02-2018for Asstt. Year 2013-14
FACTS OF THE CASE
The assessment in this case was framed by Ld. ITO u/s 143(3),has made an addition of Rs. 3,29,677/- on account of disallowance of 15% of below mentioned expenses to the returned income of the appellant assessee for asstt. year 13-14:
