ITA No. 3973/Del/2013 Dated 05-06-2015
This appeal, preferred by the revenue, is directed against CIT(A)’s order dated 26-4-2013 relating to A.Y. 2008-09. Effective grounds raised are as under:
“1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in accepting the addition evidence in violation of Rule 46A of the income Tax Act.
2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the disallowance of Rs. 13,03,862/- (being 10% of various expenses amounting to Rs. 1,30,38,616/-) on the basis of additional evidences in contravention of the provision of the rule 46A.”
2. None put in appearance on behalf of the assessee at the hearing despite issue of notice for hearing. Accordingly, we proceed to dispose of the revenue’s appeal ex parte, qua the assessee, on merits and in that process we have heard ld. Sr. DR and perused the entire material available on record.
3. Brief facts of the case are that the assessee had filed e-return at a total income of Rs. ,09,739/-. The assessee firm, in the relevant assessment year, was engaged in the business of investigation. The AO made an addition of Rs. 13,03,862/-, inter alia, observing in para 5 as under:
“5. On further perusal of the profit and loss account, it is noticed that the assessee has claimed expenses under the head business promotion of Rs. 38,352/-, depreciation of Rs. 4,06,438/-, factoring charges of Rs. 1,11,53,903/-, conveyance of Rs. 3,35,501/-, printing & stationery expenses of Rs. 1,23,861/-, calling charges of Rs. 1,35,125/- and tour & travels expenses of Rs. 8,45,256/-. The A.R. of the assessee was asked to produce log book, bills, vouchers and other books of account in support of expenses for the business purposes, but the assessee could not produce any log book/ bills/ vouchers or any other books of account in support of his claim. Hence, 1/10th of expenses (i.e. 10% of Rs. 1,30,38,616/-) is disallowed and added back to the total income of the assessee. ”
4. Ld. CIT(A) deleted the disallowance after taking into consideration the affidavit filed by partner of the firm, affirming that all the details, viols and vouchers required by the AO were produced during the assessment proceedings. He further observed as under:
“The business promotion expenses of Rs. 38,532/- have been incurred through credit card. Moreover, the appellant has paid fringe benefit tax on the business promotion, conveyance, and tour and travel expenses. The printing and stationery expenses of Rs. 1,23,861/- consist of mainly petty amounts incurred for purchase of files, folders, etc. and amounts of over Rs. 1,000/- are supported by bills. The major items of expenditure is of factoring charges of Rs. 1,11,53,903/- which are paid to the agents for debt collection and verification. The appellant has submitted copies of TDS returns filed in form no. 26Q in evidence of deduction of tax on payment of total factoring charges of Rs. 1,07,96,960/-, and it is submitted that tax was not deducted on the balance amount of Rs. 3,56,943/- as the amounts paid were less than the limits prescribed for TDS. The TDS returns have the complete details of the persons in whose cases tax has been deducted along with their PAN. Considering the evidences filed, no reason is found for sustaining the lump sum disallowance of 10% of various expenses. Accordingly, the disallowance amounting to Rs. 13,03,862/- is deleted.”
5. Aggrieved, the assessee is in appeal before us.
6. Admittedly, the disallowance made by the AO were ad hoc disallowances, without considering the evidence on record. Nothing has been brought on record to controvert the findings of ld. CIT(A) and, therefore, we do not find any reason to interfere with the same.
7. In the result, revenue’s appeal is dismissed.
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