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2016 (8) TMI 264 - AT - Income TaxDisallowance of purchase and professional/ technical fee - Held that - A cursory glance upon these bills and other evidences shows that these cannot be ignored without their verification. Therefore, with a view to meet the ends of justice, we send both of these issues back to the file of the AO with a direction to give adequate opportunity of hearing to the assessee to file all the details and evidences as may be considered appropriate by the assessee. The AO shall decide this issue afresh after taking into account the same on objective basis. - Decided in favour of assessee for statistical purposes. Ad-hoc disallowance of certain expenses @ of 20% - Held that - It is noted that on this issue requisite details and evidences have been furnished by the assessee before the lower authorities. There were no basis to make an ad-hoc disallowance as per law and therefore, ad hoc disallowance of ₹ 1,99130/- is directed to be deleted.
Issues:
1. Disallowance of purchases 2. Addition of professional/technical fees in total income 3. Disallowance of certain expenses 4. Disallowance of depreciation 5. Disallowance of vehicle expenses 6. Condonation of delay in filing appeal Analysis: Issue 1 - Disallowance of Purchases: The appellant contested the disallowance of purchases amounting to ?9,42,532 by the CIT(A), citing that complete details of purchases were submitted, and the deduction should have been allowed. The ITAT found that due to family disputes, necessary evidence could not be produced before lower authorities. The ITAT directed the AO to provide the appellant with an opportunity to submit all relevant details and evidences for fresh adjudication, sending the issue back to the AO for objective consideration. Issue 2 - Addition of Professional/Technical Fees: The appellant challenged the addition of ?1,50,000 as professional fees, arguing that it would result in double taxation. The ITAT noted that the appellant submitted bills and supporting evidence, which were not considered due to family disputes. The ITAT decided to send the issue back to the AO for fresh adjudication, instructing the AO to allow the appellant to present all relevant details and evidences for a fair decision. Issue 3 - Disallowance of Certain Expenses: The appellant contested the ad-hoc disallowance of expenses at 20%, providing necessary details and evidence to refute the disallowance. The ITAT reviewed the evidence submitted and found no legal basis for the ad-hoc disallowance. Consequently, the ITAT directed the deletion of the ad-hoc disallowance of ?1,99,130. Issue 4 - Disallowance of Depreciation: The CIT(A) confirmed the disallowance of depreciation amounting to ?59,800 on fixed assets added during the assessment year. The appellant argued for the deletion of this disallowance, which the ITAT dismissed as the appellant did not press this ground during the hearing. Issue 5 - Disallowance of Vehicle Expenses: The CIT(A) upheld the disallowance of vehicle expenses of ?59,186 related to fixed assets added during the assessment year. The appellant contested this disallowance, claiming that all necessary evidence was submitted. However, the ITAT found that sufficient evidence to prove the vehicle expenses was not provided, resulting in the dismissal of this ground. Issue 6 - Condonation of Delay: The appellant filed a petition for condonation of delay in filing the appeal, citing family disputes as the reason for the delay. The ITAT, considering the circumstances, granted condonation of the delay and admitted the appeal for adjudication on merits. In conclusion, the ITAT partially allowed the appeal, sending back certain issues for fresh adjudication due to lack of evidence and family disputes affecting the proceedings. The ITAT granted condonation of delay in filing the appeal, ensuring a fair opportunity for the appellant to present their case.
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