Charu Agarwal Vs ACIT (ITAT Agra Bench)
Handmade Vouchers Cannot Invite a Machine-Made 20% Cut—Rs. 4.95-Lakh Ad Hoc Disallowance Deleted
Cold-storage expenses enter the scrutiny chamber
The assessee, Charu Agarwal, was engaged in operating a cold-storage business under the name Ramwati Sheetgrah. For AY 2017-18, she filed her return on 28.10.2017 declaring total income of Rs.47,88,710.
The return was selected for complete scrutiny under CASS & notice u/s 143(2) was issued on 13.08.2018. During assessment, the AO examined various expenses debited to the Profit & Loss Account aggregating to Rs.24,76,000.
Although the assessee furnished a reply dated 19.12.2019 along with explanations & supporting material, the AO considered the documentation inadequate. He consequently disallowed 20% of the aggregate expenditure, resulting in an addition of Rs.4,95,200.
The CIT(A) confirmed the disallowance by relying upon various judicial decisions. The assessee carried the matter to the Agra ITAT. None appeared on her behalf at the hearing, but the Tribunal proceeded to decide the appeal after hearing the Revenue & examining the material available on record.
Seven expense heads placed under one umbrella
The expenditure examined by the AO comprised building repairs of Rs.2,33,195, conveyance expenses of Rs.46,290, machinery repairs of Rs.14,86,314, salary & wages of Rs.5,07,225, sundry expenses of Rs.46,433, telephone expenses of Rs.40,839 & motor-car expenses of Rs.1,15,704.
