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TMI Blog2022 (9) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, as against total travelling and conveyance expenses of Rs. 1.20 crores incurred in the immediately preceding year also keeping in view increase in business receipts during the year under consideration, more so no details were forthcoming from the assessee to substantiate these travel and conveyance expenses and justify that these expenses were incurred wholly and exclusively for the purposes of business satisfying the mandate of Section 37(1) - keeping in view entire factual matrix of the case, the appeal filed by the assessee lacks merit - Decided against assessee. - ITA No. 110/Vns/2019 - - - Dated:- 20-4-2022 - SHRI.VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER Appellant by: None (Written submissions, dated 08.04.2022, filed by the assessee with Registry on 12.04.2022, with a request to decide the appeal based on the aforesaid submissions) Respondent by: Shri A.K. Singh, Sr. DR ORDER PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal, filed by assessee, being ITA No.110/Vns/2019, is directed against an appellate order dated 08.04.2019 in Appeal No.CIT(A)/GKP/8/51/ 2014-15 , passed by learned Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature and/or specific item lacking verifiability had been pointed out and specified by the Assessing Officer, and d) extensive written submissions made during the course of appellate proceedings should have deleted adhoc disallowance as aforesaid, 4. BECAUSE the order appealed against the contrary to the facts, law and principles of natural justice. 3. The brief facts of the case are that the assessee is a Private Limited Company, engaged in the business of recruitment of Professional Manpower for other companies. The assessee filed its e-return of income, on 29.11.2014 , for ay: 2014-15, declaring income of Rs. 2,28,24,900/- . The case of the assessee was selected by Revenue for framing scrutiny assessment u/s 143(2) read with Section 143(3)of the 1961 Act, which culminated into an assessment order dated 28.12.2016 passed by the AO u/s 143(3)(ii) of the 1961 Act, wherein income of the assessee was assessed at Rs.2,39,32,320/- . The solitary issue in this appeal is with respect to disallowance of Rs. 10,00,000/- by the AO out of travelling and conveyance account, which was added to the income of the assessee by the AO , vide assessment order dated 28.12.2016 passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO to file supporting evidences in respect of these expenses, but despite repeated opportunities granted by the AO , the assessee failed to file any supporting evidences except ledger account in respect of expenses incurred in these heads. The AO vide note sheet entry dated 23.12.2016 show-caused assesseeas to why in absence of supporting evidences proportionately expenses should not be disallowed and added to the income of the assessee . The assessee s AR appeared before the AO , but in opinion of the AO, the assessee failed to file any plausible answer in respect of these expenses.Thus, since the assessee has failed to file evidence of expenses incurred through credit card and reimbursed to Director and other employees of the assessee, the AO disallowed expenses to the tune of Rs. 10,00,000/- which stood added to the income of the assessee by the AO, vide assessment order dated 28.12.2016 passed u/s 143(3) of the 1961 Act. 4. Aggrieved by assessment framed by the AO, the assessee filed first appeal with ld. CIT(A), wherein ld. CIT(A) was pleased to grant part relief to the assessee, wherein ld. CIT(A) upheld disallowance of tour and travel expenses to the tune of Rs. 6,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition made by the AO on a higher side and total addition of Rs. 6,00,000/- would be fair and judicious in this case. The addition made by the AO is upheld upto extent of Rs. 6,00,000/- . The appellant gets consequential relief. 6. In the result the appeal is partly allowed. 5.Still aggrieved by the appellate order passed by ld. CIT(A), the assessee has filed second appeal with tribunal. This appeal was heard in Open Court through physical hearing mode. None appeared on behalf of the assessee, while written submissions dated 08th April, 2022 were filed by the assessee, which was received by Registry on 12.04.2022, which are placed on record in file, and prayers are made to decide the appeal based on these written submissions. The gist and crux of written submissions filed by the assessee, are that the additions have been made on adhocbasis , without pointing any specific entry from ledger account submitted by assessee before authorities. It is stated in written submissions that regular books of accounts are maintained by the assessee , and no specific defect has been pointed out by the authorities below in the books of accounts etc. which were audited twice firstly u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to the disallowance of traveling and conveyance expenses to the tune of Rs. 10,00,000/- by the AO, which disallowance was later reduced to Rs. 6,00,000/- by ld. CIT(A) in the first appellate proceedings. The assessee has claimed total travel and conveyance expenses to the tune of Rs. 1,90,14,831/- during the year under consideration , as against Rs. 1,20,24,307/- in the immediately preceding year, and such substantial increase in the travelling and conveyance expenses led AO to make further enquiries during the course of assessment proceedings. The assessee merely submitted ledger account of traveling and conveyance expenses before the AO during the course of assessment proceedings, despite being asked by the AO to submit complete details and justification for the travel and conveyance expenses. The AO had observed that the assessee has reimbursed traveling and conveyance expenses incurred by Directors and employees incurred through credit card.No details were forthcoming from the assessee and merely ledger account was submitted by assessee before the AO during the course of assessment proceedings. It is the assessee who is claiming these expenses as deduction from the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment and order of Hon ble Allahabad High Court in the case of Pr. CIT v. RimjhimIspat Limited (supra), wherein the Hon ble Allahabad High Court held as under: 7. Having heard the learned counsel for the parties, we find that there is an express finding given by the Assessing Authority as well as by the Ist Appellate Authority with regard to non-production of bills and vouchers and for not maintaining the stock register. In the absence of non-production of bills and vouchers, the Assessing Officer was justified in disallowing certain expenditure by 10%, which was reduced by the Ist Appellate Authority to 5%. This aspect had not at all been considered by the Tribunal and the same had only been allowed on the ground that the turnover has increased by 5% and the expenditure has reduced. The Tribunal has lost sight of the fact that the expenditure claimed under the head manufacturing expenses, which forms part of the profit and loss account , showing expenses made by the assessee are required to be proved by production of bills and vouchers. In the absence of production of bills and vouchers, an inference can be drawn by the Assessing Authority that such expenses shown under thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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