Case Law Details
Krishna Saree Vs ITO (ITAT Chennai)
ITAT noted that the assessee in the relevant year 2016-17 i.e., financial year claimed salary and EB charges to the extent of Rs.17.34 lakhs and Rs.17.06 lakhs respectively on a total turnover of Rs.5,63,46,823/-. We have also noted that in the immediate preceding year i.e., year ended 31.03.2016, the assessee has incurred salary expenses of Rs.6.60 lakhs and EB charges of Rs.2.88 lakhs as against total turnover of Rs.2,39,41,889/-. We noted that the turnover has increased more than double and consequently expenses have increased little more than doubt on both counts i.e., salary as well as EB charges. We noted that the AO has made estimated disallowance on the basis that the assessee has not furnished any separate documents like details of staff or details of electricity bills. We noted that this is purely adhoc disallowance made by AO and confirmed by CIT(A) and there is no itemized disallowance and based on specific invoice. Hence, we delete the disallowance and allow the appeal of assessee.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi in Appeal No. CIT(A), Tiruchirappalli – 1/10301/201920 dated 27.12.2021. The assessment was framed by the ITO, Ward (1), Chennai for the assessment year 2017-18 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 17.12.2019.
2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in estimating the disallowance of expenditure on adhoc basis @ 10% on salary and EB charges. For this, assessee has raised various factual grounds, which need not to be reproduced.
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