Sh. Jasdeep Singh Vs ITO (ITAT Delhi)
Ld. Counsel for the assessee submitted that the assessee has furnished all the vouchers. He submitted that the Assessing Officer remarked that vouchers of Rs.5,31,271/- of Taj Mahal Hotel were not furnished is totally wrong as the same was duly furnished and there is no specific defect pointed out by the Assessing Officer. Hence, such ad-hoc disallowance is not permissible.
ITAT note that undoubtedly this is a ad-hoc disallowance except for the absence of vouchers of Rs.5,31,271/-, no other specific defect has been pointed out by the Assessing Officer. In these circumstances, the total ad-hoc disallowance is not sustainable. However, the absence of vouchers of Rs,.5,31,271/- has been pointed out by the Assessing Officer which the Ld. Counsel for the assessee dispute and submits that it was placed before the Assessing Officer. Furthermore, the ld. counsel for the assessee submits that apart from export the assessee has some local customers also and this particular expenditure was in connection with local lunch hosted by the assessee. Thus, we note that the Assessing Officer has noted absence of specific voucher but the ld. counsel for the assessee contends that the same was duly shown and the same has also been made available in the paper book. In our considered view, the interest of justice will be served if the Assessing Officer is directed to examine this particular voucher and examine the allowability of the same afresh. No other ad-hoc disallowance in this regard is sustainable.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of the Ld. CIT(Appeals)-XXV, New Delhi, dated 29.07.2019 pertaining to Assessment Year 2013-14.
2. The issue raised is that the Ld. CIT(A) has erred in confirming the addition of Rs.10 lakhs on account of business promotion expenses.
3. Brief facts of the case are that the assessee is a proprietorship firm in the name of SJM Exports and engaged in the business of manufacture and exporter of leather garments. On the issue of business promotion expenses, the Assessing Officer made disallowance on ad-hoc basis after noting that the assessee has not submitted complete vouchers. The Assessing Officer’s order in this regard reads as under:-
“During the course of assessment proceedings it is seen that assessee has claimed business promotion expenses at Rs. 15,86,748/- whereas in P.Y. amount of Rs.8,70,198/- were claimed under this head. The assessee has submitted comparative chart of this expenses vide its submission dated 28.10.2015. Further the assessee has submitted ledger account of these expenses vide its submission dated 16.11.2015 wherein it was noted that assessee has claimed amount of Rs. 5,31,271/- expense incurred on 24.04.2012 towards bill of the Taj Mahal Hotel, also whereas of her expenses incurred by american express card. The assessee vide note sheet entry dated 07.12.2015 was asked to produce the vouchers in this regard. The assessee vide its reply dated 14.12.2015 has submitted some vouchers but that voucher of Rs.5,31,271/- was not therein also other vouchers were not produced. Therefore it is amply clear that assessee has made expenses entries in its books to lower the profits of the concern and other expenses incurred are in personal nature and assessee failed to substantiate the business exigencies in this regard. Therefore in view of this amount of Rs.10 l Lac is hereby disallowed u/s 37 of the IT Act and added back to the total income of assessee.”
