×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
These appeals by two different assessees are directed against orders of the CIT(A), Ujjain dated 5.5.2017 for the assessment year 2014-15. We have heard the appeals together and dispose off by this consolidated order for the sake of convenience and brevity. First we take up appeal filed ini ITA No.594/Ind/2017 for the A.Y. 2014-15. The grounds raised in this appeal are as under:-
1. “That on the facts and in the circumstances of the case the Ld. CIT(A) erred in maintaining the addition of Rs.21,245/- as made by the assessing officer out of labour expenses without properly appreciating the facts of the case and submission made before him.
2. That on the facts and in the circumstances of the case the Ld. CIT(A) erred in maintaining the addition of Rs.1,14,540/- as made by the assessing officer on account of Low household withdrawal without properly appreciating the facts of the case and submission made before him.
3. That on the facts and in the circumstances of the case the Ld. CIT(A) erred in not reducing the total income of the assessee by the amount of excess stock as found and declared during the course of survey of Rs.15,00,580/- without properly appreciating the facts of the case and submission made before him.
4. The appellant reserves its right to add, alter or delete any ground of appeal on or before the date of hearing.”
2. Brief facts giving rise to the present appeal are that a survey action was carried out on 18.2.2016. The case was selected for scrutiny and the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) was framed vide order dated 20.12.2016. While framing the assessment, the A.O. made addition on account of disproportionate claim of expenses of Rs.21,245/- and additions made on account of low household expenses of Rs.1,14,540/-. Against this, the assessee preferred an appeal before Ld. CIT(A), who after considering the submissions dismissed the appeal.
3. Ground No.1 is against sustaining addition of Rs.21,245/-. Ld. Counsel for the assessee submitted that both the authorities below were not justified in making the addition and sustaining the same. It was stated before Ld. CIT(A) that the assessee had filed return of income as per section 44AD of the Act on the basis of percentage of net profit. Therefore, the A.O. ought not to have made disallowance of the expenses.
4. On the contrary, Ld. D.R. opposed the submissions and supported order of the A.O.
5. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. We find that the A.O. has made addition by estimating the expenses. The A.O. has not given any reason to disallow the claim of the assessee merely stating that these are excessive, in our view is not sufficient. There has to be some reason for treating the expenses as disproportionate or excessive as wages are never remained constant. Therefore, we direct the A.O. to delete this addition. Ground No.1 of the assessee is allowed.