Income Tax Appellate Tribunal - Jaipur
Raj Kumar Mehra , Jaipur vs Assessee on 17 July, 2015
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM
vk;dj vihy la-@ITA No. 898/JP/2012
fu/kZkj.k o"kZ@Assessment Year : 2007-8.
Shri Raj Kumar Mehra, 1- cuke The Assistant Commissioner of
Tha-27, Vigyan Nagar, Vs. Income Tax, Circle-1, Kota.
Kota.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. AFTPM 8704 R
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Shrawan Kumar Gupta (Advocate)
jktLo dh vksj ls@ Revenue by : Smt. Neena Jeph (JCIT)
lquokbZ dh rkjh[k@ Date of Hearing : 03.06.2015.
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 17/7/2015
vkns'k@ ORDER
PER SHRI T.R. MEENA, A.M.
This is an appeal by assessee emanating from the order of ld. CIT (A), Kota dated 28.09.2012. The following grounds are raised :-
1. That the impugned assessment order u/s 143(3) dated 27.11.2009 is bad in law and on facts of the case for want of justification and for various other reasons and hence the same may kindly be quashed.
2. Rs. 2,81,435/- The ld. CIT (A) has erred in law as well as on the facts of the case in confirming the disallowance of Rs. 2,81,435/- on account of various expenses as under :-
2
ITA NO.898/JP/2012 A.Y. 2007-08 Shri Raj Kumar Mehra, Kota.
S.No. Name of expenses Expenses claimed Expenses
in Rs. disallowed in Rs.
2.1 Telephone & Mobile Rs. 51088/- Rs. 10217/-
2.2 Field Development Rs. 574471/- Rs. 57447/-
2.3 Office Expenses Rs. 91391/- Rs. 9139/-
2.4. Business promotion Rs. 1071602/- Rs. 107160/-
2.5. Travelling Expenses Rs. 590461/- Rs. 59046/-
2.6. Vehicle Maintenance Rs. 185609/- Rs. 18560/-
2.7. Depreciation Rs. 198661/- Rs. 19866/-
Total Rs. 281,435/-
The disallowances so made and confirmed by the CIT (A), without rejecting the books of accounts or invoking the provision of S. 145(3) is contrary to the provisions of law and facts and hence the same may kindly be deleted in full.
3. The ld. AO erred in law as well as on the facts of the case in charging of interest u/s 234B, 234C & 234D as consequential in nature. The appellant totally denies it liability of charging of any such interest. Hence the interest so charged, being contrary to the provisions of law and facts, may kindly be deleted in full.
2. The brief facts of the case are that the assessee is an Estate Executive Consultant of PACL Ltd., which is a real estate development company. Assessee was carrying most of his business in Haryana, Punjab, Rajasthan and Madhya Pradesh. He organize seminars/conference/tours etc. for promoting company's products for which he gets commission from the company. For the purpose of business some persons are also employed by him. He also carries on the business of share trading. During the year under consideration the assessee claimed various expenses as mentioned in ground no. 2 above, incurred in connection with the running of his business. The A.O. while making assessment 3 ITA NO.898/JP/2012 A.Y. 2007-08 Shri Raj Kumar Mehra, Kota.
under section 143(3) of the IT Act, vide Note Sheet dated 11.11.2009 the assessee was asked to justify his expenditure on Business promotion, Field Development, Travelling, Office expenses, Telephone and Vehicle maintenance. The assessee vide letter dated 17.11.2009 submitted detailed reply stating that all the expenses incurred under various heads are exclusively for the purposes of business and according to the provision of the Act. All the expenses are vouched, photocopies of the bills and vouchers have been submitted in support of the expenses claimed. The AO was not convinced with the reply and, thus he disallowed the expenses to the tune of Rs. 2,81,435/- as under :-
1) Telephone & Mobile expenses @ 20% on Rs. 51,088/- Rs. 10,217/-
2) Field Development expenses @ 10%
on Rs. 574471/- Rs. 57,447/-
3) Office expenses @ 10%
on Rs. 91391/- Rs. 9139/-
4) Business Promotion expenses @ 10%
on Rs. 1071602/- Rs. 107160/-
5) Travelling expenses @ 10%
on Rs. 590461/- Rs. 59046/-
6) Vehicle maintenance expenses @ 10%
on Rs. 185609/- Rs. 18560/-
7) Depreciation @ 10% on Rs. 198661/- Rs. 19866/-
3.Being aggrieved by the order of AO, assessee carried the matter before the ld.
CIT (A) who dismissed the appeal of the assessee by observing that the disallowances made under various heads are reasonable, most of the expenses were paid in cash and the same are not verifiable.
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ITA NO.898/JP/2012 A.Y. 2007-08 Shri Raj Kumar Mehra, Kota.
4. Now the assessee is before us. The ld. A/R of the assessee submitted that looking to the nature of assessee's profession, these expenses were inevitable and cash payment is required to be made to perform the work of the company. The assessee collected most of the evidences which were possible but 100% evidence for claiming of these expenses are not possible. The ld. A.O. as well as the ld. CIT (A) has restricted the disallowance at higher side. Therefore, a reasonable disallowance may please be confirmed.
5. At the outset, the ld. D/R supported the order of ld. CIT (A).
6. We have heard rival submissions and perused the material on record. The assessee has shown returned income of Rs. 8,88,000/-. He is Estate Executive Consultant of M/s. PACL Ltd. He has to undertake tours for various States as mentioned in the assessment order and conducting seminars, conferences for promoting the company's product. Therefore, the expenses claimed by the assessee are required to be incurred. But the fact is that the disallowances made by the AO are on higher side. Therefore, considering the nature of business of the assessee, we restrict the addition to Rs. 1,40,000/- against Rs. 2,81,435/- made by the AO.
7. Regarding charging of interest under section 234B, 234C and 234D is consequential in nature. The same is disposed off accordingly. 5
ITA NO.898/JP/2012 A.Y. 2007-08 Shri Raj Kumar Mehra, Kota.
8. In the result, assessee's appeal is partly allowed.
Order pronounced in the open court on 17/7/15.
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(R.P.Tolani) (T.R. Meena)
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fnukad@Dated:- 17/7/ 2015
Das/
vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Shri Raj Kumar Mehra, Kota.
2. izR;FkhZ@ The Respondent- ACIT Circle-1, Kota.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr¼vihy½@The CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 898/JP/2012) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar 6 ITA NO.898/JP/2012 A.Y. 2007-08 Shri Raj Kumar Mehra, Kota.