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2012 (11) TMI 842 - AT - Income TaxPayment of stipend - allowable expenditure - Sustaining 50% addition out of stipend account - Held that - This is not a case where no details with regard to the payment of stipend is there with the assessee but the same were not filed by the assessee during the assessment proceedings, which were filed before CIT(A) but were appreciated for the reasons mentioned in his order. Therefore, keeping in view the facts and circumstances of the present case, CIT(A) has rightly allowed 50% of the claim made by the assessee and has rightly disallowed the balance of the claim - no infirmity in his order - ground of the Revenue are dismissed. Disallowance of various expenses - Held that - Bills and vouchers were not produced during the assessment proceedings. It was argued that the assessee is having all the evidences of the expenditure so incurred and only vouchers were produced before the AO but the same were not admitted as additional evidence. The defects pointed out by the AO were few as compared to the total expenditure incurred by the assessee at Palwal Unit - no infirmity in order of CIT(A) in allowing for expenses as done by AO - In the result, the appeal of the assessee and the appeal of the Revenue are dismissed.
Issues:
1. Disallowance of stipend account expenses 2. Disallowance of telephone expenses 3. Disallowance of vehicle running and maintenance expenses 4. Disallowance of traveling expenses 5. Disallowance of expenses of Palwal unit 6. Disallowance of bills for telephone, water, electricity, and advertisement 7. General grounds raised by both parties Issue 1: Disallowance of Stipend Account Expenses: The assessee claimed expenses in the stipend account without providing evidence. The AO disallowed the entire amount of Rs.5,00,523. The Ld. CIT(A) upheld 50% disallowance due to lack of evidence. The Tribunal noted the past allowance of similar claims but upheld the 50% disallowance, finding it fair and reasonable given the absence of supporting evidence. Issue 2: Disallowance of Telephone Expenses: The AO disallowed Rs.1,33,124 for personal use of the telephone due to missing bills. The Ld. CIT(A) reduced the disallowance to Rs.20,000 considering the lack of complete records. The Tribunal affirmed this decision as reasonable. Issue 3: Disallowance of Vehicle Running and Maintenance Expenses: A disallowance of Rs.2,00,000 was made for personal vehicle use, reduced to Rs.50,000 by the Ld. CIT(A). The Tribunal upheld this decision, rejecting the claim that vehicles were not used personally. Issue 4: Disallowance of Traveling Expenses: A disallowance of Rs.3,00,000 was made for lack of proper bills. The Ld. CIT(A) limited the disallowance to Rs.10,000, which the Tribunal found appropriate given the circumstances. Issue 5: Disallowance of Expenses of Palwal Unit: A disallowance of Rs.2,00,000 was made due to discrepancies in bills. The Ld. CIT(A) restricted the addition to Rs.25,000, which the Tribunal upheld, considering the evidence presented. Issue 6: Disallowance of Bills for Telephone, Water, Electricity, and Advertisement: An addition of Rs.10,038 was made based on debiting bills of the last year in the current financial year. The Ld. CIT(A) confirmed this action, which the Tribunal found justified due to the evidence presented. General Grounds: General grounds raised by both parties were not adjudicated upon as they were of a general nature. In conclusion, both the assessee's and the Revenue's appeals were dismissed by the Tribunal, upholding the decisions made by the Ld. CIT(A) on various disallowances and additions in expenses for the assessment year 2003-04.
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