Dalia Investment Pvt. Ltd. Vs DCIT & Anr. (ITAT Kolkata)
Citation: Dalia Investment Pvt. Ltd. Vs DCIT &Anr. (ITAT Kolkata); ITA No.2818/Kol/2013 & ITA No.04/Kol/2014; 27/04/2018; 2006-07
Conclusion: Disallowance of miscellaneous expenditure was without application of mind by AO as disallowances of expenses cannot exceed the amount of actual expenses claimed by assessee.
Held: In the instant case, assessee had claimed miscellaneous expenses of Rs. 11,650 only whereas AO had disallowed entire miscellaneous expenses amounting to Rs. 3,05,43 8.00. It was held that disallowances made by the AO and subsequently partly confirmed by CIT(A) had been made without the application of mind as disallowances of the expenses cannot exceed the amount of actual expenses claimed by the assessee. Thus, AO was directed to delete the disallowance of expenses made by him.
FULL TEXT OF THE ITAT JUDGMENT
The assessee as well as Revenue are in cross-appeals against the common order of Commissioner of Income Tax (Appeals)-XII, Kolkata dated 12.08.2013. Assessment was framed by DCIT, Circle-12, Kolkata u/s 144/143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his common order dated 05.12.200 for assessment year 2006-07.
Shri S.K. Tulsiyan, Ld. Advocate appeared on behalf of assessee and Shri Imlimeren Jamir, Ld. Departmental Representative appeared on behalf of Revenue.
2. Both the appeals are heard together and being disposed of by way of this consolidated order for the sake of convenience.
First we take up assessee’s appeal in ITA No. 2818/Kol/2013.
3. The grounds raised by the assessee per its appeal are as under:-
“1. For that the Ld. Commissioner of Income Tax (Appeals) erred both in law and in fact by confirming the following expenses, which were incurred exclusively for the purpose of business in spite of the fact that the Ld. Assessing Officer in his remand report does not raise any objection against all these expenses, though the assessment was made ex parte u/s. 144 of the I Act, 1961.
a) Freight – Rs.31,400/-
b) Power & Fuel – Rs. 55,600/-
c) Salaries, wages & bonus – Rs.1,98,500/-
d) Travelling expenses – Rs.28, 780/-
2. For that the Ld. Commissioner of Income Tax (Appeals) erred both in law and in fact by confirming 50% of material expenses amounting to Rs. 1,52,719/- whereas total miscellaneous expenditure debited in the profit & loss account was Rs. 11,650/-. Hence, it is prim facie wrong and without any basis.
3. For that the Ld. Commissioner of Income Tax (Appeals) erred both in law and in fact by reducing the agricultural income by Rs.2,40,000/- only instead of 16,68,430/-.
4. For that the Ld Commissioner of Income Tax (Appeals) erred both in law and in fact by enhancing the profit by a sum of Rs.3, 78,525/- on the basis of remand report given by the Ld Assessing Officer without any reasons and / or basis violating the settled law as pronounced by the jurisdictional High Court.
5. For that the order passed by the Ld. Commissioner of Income Tax (Appeals) is arbitrary, void Authorities Below initio and without any sanction of law.
6. For that the appellant seeks permission to raise additional ground/grounds or to modify any of the grounds before or at the time of hearing of the appeal.”
4. The assessee in ground No.1 has challenged the addition made by the Assessing Officer and subsequently confirmed by Ld. CIT(A), the additions are detailed as under:-
