Income Tax Appellate Tribunal - Jaipur
Sunil Healthcare Ltd., Alwar vs Acit, Alwar on 10 April, 2017
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA No. 1099/JP/2016
fu/kZkj.k o"kZ@Assessment Year : 2012-13
Sunil Health Care Ltd. cuke The A.C.I.T.,
17-18, Old Industrial Area Vs. Circle-1,
Alwar Alwar.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AACCS9198Q
vihykFkhZ@Appellant izR;FkhZ@Respondent
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s Assessee by : Shri P.C. Parwal
jktLo dh vksj ls@ Revenue by : Shri R.A.Verma
lquokbZ dh rkjh[k@ Date of Hearing : 06/04/2017
mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 10/04/2017
vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of Ld. CIT(A) Alwar dated 04.11.2016 for A.Y. 2012-13. The grounds of appeal taken by the assessee are as under:-
" 1. The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the adhoc disallowance out of following expenses:-
Legal & Professional Charges Rs. 70,000/- 2 ITA No.1099/JP/2016
Sunil Health Care Ltd.
Vs.A.C.I.T.,Circle-1, Alwar Sales Promotion Expenses Rs. 50,000/-
2. The Ld. AO has erred on facts and in law in confirming disallowance of Rs. 1,48,476/- (42,731 + 1,05,745) u/s 36(1) (va) r.w.s 2(24)(x) on account of delayed payments of employee's contribution towards ESI & PF ignoring that the same is deposited before the end of the year and the issue is covered by the decision of Rajasthan High Court in case of CIT vs. State Bank of Bikaner & Jaipur 363 ITR 70,CIT Vs. Jaipur Vidyut Vitran Nigam Ltd. 363 ITR 307 and CIT Vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. 366 ITR 163."
2. Regarding Ground No. 1, the brief facts of the case are that the assessee has debited a sum of Rs. 23,47,751/- in the year under consideration under the head 'Legal and professional charges' in comparison to last year's charges of Rs. 23,54,398/-. The assessee was asked to furnish details of legal and professional charges along with vouchers for verification indicating the purpose and the business exigency. In response, the assessee produced the date-wise details of Legal & Professional Charges as admitted by the Assessing Officer. At the same time, Assessing Officer held that there were certain payments through self-made vouchers and it was fair and just to make a 3 ITA No.1099/JP/2016 Sunil Health Care Ltd.
Vs.A.C.I.T.,Circle-1, Alwar disallowance of Rs. 70,000/- in this regard. On similar basis, the AO has disallowed Rs. 50,000/- out of Rs. 24,15,534/- incurred the assessee under the head "sale promotion" stating that though the assessee has produced date-wise details of sales promotion, however, there are certain payments which were made in cash or through self-made vouchers and it was fair & just to make a disallowance of Rs. 50,000/- on this account.
2.1. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) and submitted that the assessee is maintaining day to day books of account and the expenses are booked on the basis of bills/vouchers and other supporting papers which are duly checked and approved by the competent officers/executives.The expenses under this head are mainly related to Legal & Professional fees paid to various professionals, legal experts, Certification fees etc. which are properly vouched. The complete details of Legal & Professional charges were submitted to the A.O and all bills/vouchers etc. supporting the expenses were produced for verification as also stated by the A.O in his assessment order at page no. 2. The details of the expenses are enclosed herewith at P.B. 01-15. The expenses in the ledger account shows the nature of expense and are properly supported. The assessee 4 ITA No.1099/JP/2016 Sunil Health Care Ltd.
Vs.A.C.I.T.,Circle-1, Alwar has also deducted TDS wherever applicable. The A.O has not pointed out any specific expense item which is not supported or in which the assessee has booked excess expense. The A.O. has made ad-hoc disallowance without any basis but only on the doubts and surmises. On similar basis, the assessee has contested the disallowance of sales promotion expenses before the ld CIT(A).
2.2. The ld. DR. is heard who has relied on the orders of the lower authorities.
2.3. We have heard the rival contentions and pursued the material available on record. In the assessment order, the AO has stated that the assessee has produced data-wise details of Legal & Professional charges and sales promotion expenses and on perusal of those details submitted by the assessee, the AO has disallowed Rs. 70,000/- under the head Legal & professional and Rs. 50,000/- under the head 'Sales promotion' expenses. No specific expenses have been highlighted by the Assessing Officer which has not been incurred by the assessee for the purposes of business or which has been wrongly claimed by the assessee. It is a clear case of an adhoc disallowance which cannot be sustained in the eyes of law. In the result, ground No. 1 of the assessee is allowed.
5 ITA No.1099/JP/2016
Sunil Health Care Ltd.
Vs.A.C.I.T.,Circle-1, Alwar
3. Regarding ground No. 2, it is admitted position that payment of employee's contribution towards ESI and Employees Provident Fund has been deposited before the end of the financial year. In light the decision of the Hon'ble Rajasthan High Court in case of CIT vs. State Bank of Bikaner & Jaipur and others, the ground taken by the assessee is allowed.
In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 10/04/2017.
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(Kul Bharat) (Vikram Singh Yadav)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur
fnukad@Dated:- 10/04/2017.
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vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Sunil Health Care Ltd., Alwar
2. izR;FkhZ@ The Respondent- The A.C.I.T., Circle-1, Alwar
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File {ITA No. 1099/JP/2016} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar