Jagrutbhai Kesharbhai Mehta, ... vs Assessee

ी एन0एस0 सैनी, लेखा सदसय ् एवं ी कुल भारत, नया#यक ् सदसय ् के सम$

BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND

SHRI KUL BHARAT, JUDICIAL MEMBER

No.2556/Ahd/2011

धा%रण वष%/Assessment Year: 2008-09

Jagrutbhai K. Mehta, Income Tax Officer, Prop. Royal Marketing, Vs Ward 11(1), Rachana 25-B Samast AHMEDABAD. Brahmkshatriya Society, Nr.Shantivan,Narayannagar Road, Paldi, AHMEDABAD-380 007.

अपीलाथ(/ (Appellant) )तयथ(/ ् (Respondent)

Appellant by Shri S.N. Shah

Respondent by Smt. Sonia Kumar, Sr.D.R.

ु वाई क तार ख/ Date सन of Hearing : 06/05/2015

घोषणा क तार ख / Date of Pronouncement: 13/05/2015 IT A No.2556/Ahd/2011 2

आदे श/O RDER

PER N.S. SAINI, ACCOUNTANT MEMBER:

This is an appeal filed by the assessee against the order of CIT (A) XVI Ahmedabad dated 7-9-2011.

2. Ground number one of the appeal is general in nature and hence requires no separate adjudication by us.

3. Ground number two of the appeal is directed against the order of CIT (A) in confirming the addition of Rs.3,26,368/-being discount charges under section 40 (a) (ia) of the income tax act 1961.

4. We have heard the rival submissions and perused the orders of the lower authorities and materials available on record. In the instant case the assessee is engaged in the business of trading in kitchen ware. The assessing officer observed that the assessee has debited Rs.3,26, 368/- under the head discount expenses. The assessee explained before the assessing officer that the said amount represents cash discount and the amount which is not receivable against sale of goods and no TDS was legally required to be deducted thereon. However, the assessing officer disallowed the aforesaid amount by invoking provisions of section 40(a) (ia) on the ground of failure of the assessee to deduct TDS thereon.

5. On appeal CIT (A) confirmed the action of the assessing officer.

6. Before us the Authorised Representative of the assessee submitted that the assessee was not liable to deduct TDS on the above discount and therefore the disallowance was not justified.

IT A No.2556/Ahd/2011 3 7. On the other hand the Departmental Representative supported the orders of the lower authorities.

8. We find that it is not in dispute that the amount in question represented discount which was allowed by the assessee to the parties to whom goods were sold by the assessee. Thus the discount in fact goes on to reduce or abate the sale value of the goods. No material could be brought on record by the assessing officer to show why and under which section of the income tax act the assessee was legally obliged to deduct TDS in respect of the amount in question. The onus which was on the revenue has not at all been discharged before alleging that the assessee made a default in deducting TDS . Thus the aforesaid disallowance made by invoking provisions of section 40 (a) (ia) is not sustainable. We therefore delete the disallowance of Rs. 3,26,368/-and allow the ground of appeal of the assessee.

9. The ground number 3 of the appeal of the assessee is directed against the order of the CIT (A) in confirming the addition of Rs.74,050/-being one fifth of Rs.3,70,293/- being miscellaneous expenses, mobile expenses and vehicle expenses treating it as for personal purposes.

10. We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. In the instant case the assessing officer disallowed 20% of expenses under the head miscellaneous expenses, mobile expenses and vehicle expenses on the ground of personal use. The Authorised Representative of the assessee submitted that no material would be brought on record by the assessing officer to show any personal expenses were debited and also submitted that the disallowance at the rate 20% was excessive and without basis.

IT A No.2556/Ahd/2011 4 11. We find that the disallowance was made on estimate. In our considered view it shall be fair and to meet the interest of the Justice to restrict the disallowance at the rate 10% of the expenses. Thus we confirm the disallowance to the extent of Rs. 37,025/-and delete the balance disallowance of Rs.37,025/-. Thus this ground of appeal of the assessee is partly allowed.

12. In the desert appeal of the assessee is partly allowed

Order pronounced in the Court on Wednesday the 13th May, 2015 at Ahmedabad.

Sd/- Sd/-

(KUL BHARAT) ( N.S. SAINI)

JUDICIAL MEMBER ACCOUNTANT MEMBER

Ahmedabad; Dated 13 /05/2015

आदे श क+ )#त,ल-प अ.े-षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. संबं धत आयकर आयु त / Concerned CIT

4. आयकर आय ु त(अपील) / The CIT(A)-III

5. वभागीय #त#न ध, आयकर अपील य अ धकरण / DR, ITAT,

6. गाड% फाईल / Guard file.

आदे शानस ु ार / BY ORDER,

उप/सहायक पंजीकार ( Dy./Asstt.Registrar) IT A No.2556/Ahd/2011 5

आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

Patki

1. Date of dictation- : 13-5-2015

2. Date on which the typed draft is placed before the Dictating Member 13-5-2015

3. Date on which the approved draft comes to the Sr.P.S./P.S. -13-5-2015

4. Date on which the fair order is placed before the Dictating Member for Pronouncement 13-5-2015.

5. Date on which the file goes to the Bench Clerk 14-5-2015

6. Date on which the file goes to the Head Clerk..................................

7. The date on which the file goes to the Assistant Registrar for signature on the order..........................

8. Date of Despatch of the Order..................