2014 (1) TMI 1258 - AT - Income Tax

Disallowance of sundry expenses Payment of dock charges Held that - Relying upon A.P.L. (India) P. Ltd. vs. DCIT 2004 (10) TMI 260 - ITAT BOMBAY-E - The Advocate has agreed that he will have no objection if sundry expenses are disallowed to the extent of 25% of the expenses thus, the order of the CIT(A) set aside and the AO is directed to make the disallowance of 25% of the sundry expenses Decided partly in favour of Assessee.

Summary

Issues: Disallowance of sundry expenses for payment to dock workers.

In this case, the primary issue revolved around the disallowance of sundry expenses related to payments made to dock workers, which the assessing officer had disallowed as not permissible under the law. The appellant contended that the issue was covered in their favor by a previous decision of the Tribunal in a related case. The appellant's senior advocate argued that the Tribunal's decision in the sister concern's case supported their position, and the CIT(A) had also ruled in favor of the appellant in previous assessment years. On the contrary, the Departmental Representative relied on the orders of the CIT(A) and the assessing officer.

Upon careful consideration of the submissions, the Tribunal found that a similar issue had been addressed previously in the case of M/s. N. Jamnadas & Co. vs. ACIT. The Tribunal referred to specific paragraphs from the earlier decision, highlighting that the issue had been conclusively settled in that case. The Tribunal noted that the legal aspect of the expenses hinged on whether the payments were made to government employees or not. Citing a precedent, the Tribunal emphasized that if the appellant failed to prove that the payments were made to government employees, a portion of the expenses would be disallowed. The Tribunal, taking into account the appellant's agreement, directed the assessing officer to disallow 25% of the sundry expenses, aligning with the earlier decision and the appellant's concession.

Conclusively, the Tribunal partially allowed the appeals, setting aside the CIT(A)'s order and instructing the assessing officer to disallow 25% of the sundry expenses related to payments made to dock workers. The decision was pronounced in open court on a specific date in 2012.