Subhrashi Enclave Pvt. Ltd Vs ITO (ITAT Kolkata)
ITAT Kolkata reviewed the case of Subhrashi Enclave Pvt. Ltd vs. ITO, where the Assessing Officer (AO) disallowed expenses for salary, bonus, rent, electricity, and staff welfare, totaling ₹32,04,700. The AO cited insufficient responses and the inability to locate the company’s office as reasons for disallowance. However, the appellant claimed detailed submissions were made, including evidence of salary payments, rent receipts, and attendance registers, both physically and through the income tax portal. Before the Commissioner of Income Tax (Appeals) [CIT(A)], the appellant did not respond to notices, leading to the dismissal of the appeal.
At ITAT, the appellant argued that all required documentation was filed, refuting the AO’s claim of non-response. The tribunal acknowledged the appellant’s evidence and concluded that salary, bonus, and rent expenses were genuine and allowable. However, due to a lack of adequate evidence for staff welfare expenses, the tribunal upheld the disallowance of ₹22,700 under this head. Thus, the tribunal partly allowed the appeal, providing relief for salary, bonus, and rent disallowances but affirming the addition related to staff welfare expenses.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
In this case, the return of income was filed on 26.10.2017 declaring total income of Rs. 33,560/-. The case was picked up for scrutiny and the Assessing Officer (hereinafter referred to as ld. ‘AO’) sought to verify the genuineness of expenses and some other items claimed in the profit & loss account. It has been recorded that the ld. AO made efforts to summon the principal officer of the company and also deputed his Inspector to verify the physical existence of this company. It seems that the Inspector could not locate the office of the appellant company and thereafter, it is further recorded that show cause regarding disallowance of expenses on account of salary and bonus, rent and electricity and staff welfare expenses was issued but apparently not responded to by the appellant. Thereafter, the ld. AO proceeded to make additions under these three heads amounting to Rs. 32,04,700/- in the hands of the assessee.
