Prakash G.Mittal, Ahmedabad vs Assessee
- CitationITA No.2311/Ahd/2011
Ratio decidendi
The rule this decision rests on
Where an assessee has not furnished the complete details of claimed expenditure (names, addresses, amounts paid, and identity proof of the payees), the authorities are justified in estimating a reasonable allowable amount and allowing a deduction only to that extent, rather than allowing the full claim. Where the assessee adduces no material to show that a disallowance made on a similar item in an earlier assessment year was varied in appeal by a higher authority, a disallowance of a part of telephone, car and car-depreciation expenses on account of personal use, made at the same rate, may be sustained.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
अपीलाथ!/ (Appellant) "#यथ!/ (Respondent)
Assessee(s) by : Shri Gaurav Nahta Revenue by : Shri Nimesh Yadav, Sr.DR सन ु वाई क तार ख/ Dateof Hearing : 05/03/2015 घोषणा क तार ख / Date of Pronouncement: 13/03/2015
आदे श/O R D E R
PER N.S. SAINI, ACCOUNTANT MEMBER: This an appeal filed by
the assessee against order of the CIT(A)-XVI, Ahmedabad dated 9.8.2011 for Asstt.Year 2008-09.
2. The ground no.1 of the assessee is general in nature, and hence, requires no adjudication by us.
3. The ground no.2 of the appeal of assessee reads as under:
"2. The ld.CIT(A) erred in law and on facts in confirming the addition of Rs.7,08,674/- made on account of disallowance of salary & wages, bonus, leave encashment expenses."
4. We have heard rival submissions and perused the orders of the lower authorities and material available on record. The assessee is engaged in the business of manufacturing of cloth on power-loom on job work basis. During the year, the assessee claimed expenditure under the head salary & wages, bonus and leave salary aggregating to Rs.35,43,370/-. According to the AO, the assessee failed to furnish the ITA No.2311/Ahd/2011 2
details of expenditure as required by him, and therefore, he disallowed 20% of the above expenses, which worked out to Rs.7,08,674/-.
5. On appeal, the CIT(A) confirmed the action of the AO.
6. Before us, the AR of the assessee submitted that the expenditure allowed under this head in the immediately preceding assessment year was Rs.26,76,805/- against the job work receipts of Rs.61,79,552/-. As against this, the total job work charges in the year under consideration has increased to Rs.66,42,446/-, and therefore, disallowance of Rs.7,08,674/- out of the expenditure of Rs.35,43,370/- was without any basis and highly excessive.
7. The DR supported the orders of the lower authorities.
8. We find that the assessee has not disputed that complete details of expenditure in question could not be filed by it before the lower authorities. Therefore, in our considered view, the lower authorities were justified in estimating the reasonable expenditure for the year under consideration and allow deduction for the same only. We find that before us also, the assessee has not filed the details asked by the AO, such as name, address, the amount paid to the employees and their ID-proof. In the above facts and circumstances of the case, we find no good reason to interfere with the order of the CIT(A), which is confirmed and the ground of appeal of the assessee is dismissed.
9. The ground no.3 of the assessee's appeal reads as under:
"3. The ld.CIT(A) erred in law and on facts in confirming the addition of Rs.33692/- made on account of disallowance of 1/5th of the telephone expense, car expenses and depreciation on car on the ground of existence of personal element in such type of expenses."
10. Brief facts of the case are that the AO found that the assessee had incurred expenditure of Rs.53,376/- under the head telephone expenses, Rs.93,105/- under the head car expenses and Rs.21,981/- under the head depreciation on car, aggregating to Rs.1,68,462/-. The ITA No.2311/Ahd/2011 3
AO disallowed 20% out of Rs.1,68,462/- on account of personal use of telephone and car by the assessee.
11. On appeal, The CIT(A) confirmed the action of the AO.
12. Before us, the AR of the assessee has made no argument on this ground of appeal of the assessee. We find that in the paper book filed before us at page nos.8 to 10, copy of the assessment order for A.Y.2006-07 is filed. A perusal of the same shows that in A.Y.2006-07 in the assessment made under section 143(3) of the Act on 22.10.2008, the AO had disallowed 20% of the expenses claimed under the head telephone expenses. The AR of the assessee, during the course of hearing has not placed any material on record to show that this disallowance was varied in appeal by any higher authority. Considering the entire facts of the case, we find no good reason to interfere with the order of the CIT(A), which is hereby confirmed and the ground of the appeal of the assessee is dismissed.
13. In the result, the appeal of the assessee is dismissed.
Order pronounced in the Court on Friday the 13th March, 2015 at Ahmedabad.
Sd/- Sd/- (SHAILENDRA KUMAR YADAV) ( N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER
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