Sarvodaya Mining Services Vs ACIT (ITAT Jodhpur)
The Income Tax Appellate Tribunal (ITAT), Jodhpur, addressed an appeal filed by Sarvodaya Mining Services against the CIT(A)’s order for Assessment Year 2017-18. The appeal, filed with a condoned delay of 15 days, challenged a sustained disallowance of ₹ 8,13,552.
The Assessing Officer (AO) had initially disallowed 1%₹ 51,40,431 of the assessee’s total expenses due to the huge claim, without rejecting the books of account under Section 145 of the Income-tax Act. The CIT(A) reduced this disallowance, sustaining ₹ 8,13,552 by disallowing 20% of specific administrative expenses, including telephone, motor, travelling, staff welfare, and mess expenses, totaling ₹ 40,67,763.
The ITAT held that the lower authorities erred by making the addition without rejecting the assessee’s books of account and without establishing any specific lacuna or contradiction with the audited books. The Tribunal noted that the assessee maintained books of account under Section 44AB and had undergone a tax audit. Relying on a Rajasthan High Court order, the ITAT concluded that since no specific defect was pointed out by the revenue authorities to justify the disallowance, the sustained addition of ₹ 8,13,552 was liable to be quashed. The appeal was consequently allowed.
FULL TEXT OF THE ORDER OF ITAT JODHPUR
