Mani Ram Verma, Faizabad vs Assessee
- CitationITA No.383/LKW/2014
Ratio decidendi
The rule this decision rests on
The Tribunal declined to interfere with a percentage disallowance of claimed expenses where the assessee had not controverted the lower authority's findings, namely that the auditor had made adverse comments including the absence of supporting vouchers for some expenses, that the Assessing Officer had found discrepancies in the salary registers and in the bills and vouchers furnished, and that the book profit rate had declined; the Tribunal held that these uncontroverted findings sustained a 10% restriction of the salary and other expense claims and that the assessee, having failed to show that full details were available, could not displace them.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Shri Mani Ram Verma, Vs A.C.I.T., Katra, Gosainganj, Circle-Faizabad. Fiazabad. PAN:ABLPV1619E (Appellant) (Respondent)
Appellant by Shri M. P. Mishra, Advocate Respondent by Shri K. C. Meena, D. R. Date of hearing 18/11/2014 Date of pronouncement 07/01/2015
ORDER
PER A. K. GARODIA, A.M.
This is an assessee's appeal directed against the order passed by learned CIT(A)-I, Lucknow dated 11/02/2014 for the assessment year 2010- 2011.
2. The grounds raised by the assessee are as under:
"1. That the learned CIT(A) erred in law and on facts in arbitrarily sustaining addition ( to the extent of 10 % of disallowance ) of Rs.93,120/- out of Salary expenses claimed by the assessee as per Audited Books of account.
2. That the learned CIT(A) erred in law and on facts in arbitrarily sustaining addition ( to the extent of 10% of disallowance ) of Rs.59,320/- out of 'other expenses' claimed by the assessee as per Audited Books of account."
2 3. Learned A.R. of the assessee reiterated the same contentions which were raised before CIT(A) whereas Learned D.R. of the Revenue supported the order of learned CIT(A).
4. We have considered the rival submissions. We find that the first issue regarding disallowance of Rs.93,120/- was decided by CIT(A) as per Para 2.3 of his order, which is reproduced below for the sake of ready reference:-
"2.3 I have considered the matter. I find that the net profit rate of M/s Verma Transport Co. in which the appellant is running a petrol pump has declined from 0.41% to 0.18%. The argument of the appellant that the salary expense during the year was comparable with the salary paid in earlier years is also not tenable because in none of the earlier years assessment was completed u/s 143(3). It is also seen that in the audit report the Auditor has made several adverse comments. One of such comments is in respect of few expenses proper supporting vouchers had not been produced, The AO also pointed out a number of discrepancies in the salary registers maintained by the appellant. Considering the submissions of the appellant I find it reasonable to restrict the addition to 10% of salary expenses of Rs.9,31,200/- claimed by the appellant The appellant gets the relief accordingly."
4.1 From the above Para from the order of CIT(A), we find that it is noted by CIT(A) that the auditor has made several adverse comments in the audit report. He has also noted that one of such comments is in respect of few expenses where proper supporting vouchers had not been produced. He has also noted that the Assessing Officer also pointed out a number of discrepancies in the salary registers maintained by the assessee. Considering all these facts, the CIT(A) has confirmed 10% disallowance of salary expenses out of total expenses of Rs.9,31,200/-. These findings of CIT(A) could not controverted by Learned A.R. of the assessee and it could not be shown that full details are available. Hence, we decline to interfere in the order of CIT(A). Ground No. 1 is rejected.
3 5. Regarding ground No. 2 of the appeal, we find that the issue was decided by CIT(A) as per Para 3.2 of his order, which is reproduced below for the sake of ready reference:-
"3.2 I have considered the matter. I find that the net profit rate of M/s Vermu Transport Co. in which the appellant is running a petrol pump has declined from 0.41% to 0.18%. The argument of the appellant that the expenses claimed during the year were reasonable is not supported by any material evidence. It is also seen that in the audit report the Auditor has made several adverse comments. One of such comments is - in respect of few expenses proper supporting vouchers had not been produced. The AO also pointed out a number of discrepancies in the bills/ vouchers furnished by the appellant Considering the submissions of the appellant I find it reasonable to restrict the addition to 10% of other expenses of Rs.5,93,195/- claimed by the appellant The appellant gets the relief accordingly. Ground no. 3 is of general nature."
6. We find that this disallowance was also confirmed by CIT(A) with the same finding as given by him for confirming the first disallowance and for this disallowance also, Learned A.R. of the assessee could not controvert the finding of CIT(A). We, therefore, decline to interfere in the order of CIT(A).
7. In the result, the appeal of the assessee stands dismissed.
(Order was pronounced in the open court on the date mentioned on the caption page)
Sd/. Sd/.
(SUNIL KUMAR YADAV) ( A. K. GARODIA ) Judicial Member Accountant Member
Dated:07/01/2015. *C.L.Singh
Copy of the order forwarded to : 1.The Appellant 2.The Respondent. 3.Concerned CIT 4.The CIT(A) 5.D.R., I.T.A.T., Lucknow Asstt. Registrar
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