2022 (11) TMI 21 - AT - Income Tax

Disallowance of amount of stale cheques appearing as outstanding towards Other Creditors - assessee was asked to show case as to why the same be not disallowed, to which, the assessee, inter alia, submitted that it relates to the cheque issued to the creditors, but, not presented by them to the Bank - HELD THAT - We find that the Ld. CIT(A) after considering the details submitted by the assessee and for the reasons noted in the order has upheld the disallowance made by A.O. Before us, no fallacy in the findings of the Ld. CIT(A) has been pointed out by assessee nor has it placed any material on record to support its case. We, therefore, find no reason to interfere with the orders of the Ld. CIT(A) on this ground. Thus, the ground of appeal of no.1 of the assessee is dismissed. Adhoc disallowance of Car Repair and Maintenance Expenses and Communication Expenses - HELD THAT - We find that the Ld. CIT(A) after considering the details submitted by the assessee and for the reasons noted in the order has upheld the disallowances made by A.O. Before us, no fallacy in the findings has been pointed out by assessee nor has he placed any material on record to support its case. We, therefore, find no reason to interfere with the orders of the lower authorities on this ground. Thus, the ground of appeal of the assessee are dismissed.

Summary

Issues:
1. Disallowance of amount of stale cheques towards Other Creditors.
2. Adhoc disallowance on expenses like Car Repair and Maintenance Expenses and Communication Expenses.

Issue 1: Disallowance of amount of stale cheques towards Other Creditors:

The appeal was filed against the Order of the Ld. CIT(A) relating to the A.Y. 2013-2014. The A.O. disallowed Rs.27,252/- appearing under "Other Creditors" in the Balance Sheet, as the assessee was following the cash system of accounting and the amount was not cleared. The Ld. CIT(A) confirmed the disallowance, stating that as per cash system of accounting, the amount should be credited in the P & L A/c only when paid. The Tribunal upheld the decision, noting that the assessee failed to provide any new evidence or challenge the Ld. CIT(A)'s findings.

Issue 2: Adhoc disallowance on Car Repair and Maintenance Expenses and Communication Expenses:

The A.O. disallowed 10% of Car Repair and Maintenance Expenses and Communication Expenses claimed by the assessee due to the personal element in these expenses. The Ld. CIT(A) upheld the disallowance, mentioning that the appellant failed to provide evidence of separate vehicles and telephones for exclusive personal use. Despite multiple adjournments, the appellant did not submit the required details. The Tribunal supported the lower authorities' decisions, as the appellant did not present any new evidence or challenge the findings during the proceedings. Consequently, the grounds of appeal related to these expenses were dismissed.

In conclusion, the Tribunal dismissed the appeal of the Assessee, upholding the disallowances made by the lower authorities regarding the stale cheques towards Other Creditors and the adhoc disallowance on Car Repair and Maintenance Expenses and Communication Expenses. The decision was based on the failure of the appellant to provide supporting evidence or challenge the findings during the proceedings.