2020 (2) TMI 942 - ITAT JAIPUR - Income Tax

Head Note / Extract:
Addition on account of service charges receipts - ad hoc disallowance of vehicle and telephone expenses on estimated basis - Rectification u/s 154 - HELD THAT:- No basis has been given by any of the lower authorities for making ad hoc addition on account of service charges income. Even during the course of scrutiny assessment, no defect was pointed out by the A.O. in the books of account nor the same were rejected. In absence of any specific defect or discrepancy, no valid addition can be made. In the present case, the Authorities Below have failed to point out any specific instance of suppression of service income, or any discrepancy or mistake in any manner. Under these circumstances, no such addition was legally maintainable. Even the order of the ld. CIT(A) for the A.Y. 2009-10 clearly indicates that the addition was made by the A.O. on presumption without pointing out any defect. Even the rectification order passed by the ld CIT(A) U/s 154 of the Act reversing his earlier findings, appears to be not legally sustainable in so far as there was no apparent mistake in his earlier order which could be rectified in garb of Section 154 of the Act. However, without commenting on the order passed by the ld. CIT(A) U/s 154 for the A.Y. 2009-10 reversing his earlier order passed, I do not find any merit in the ad hoc addition made during the years under consideration. Accordingly, the A.O. is directed to delete the addition Disallowance has been made by the lower authorities on estimate basis and without pointing out any specific mistake or instance of disallowable nature of expenditure. Keeping in view the totality of facts and circumstances of the case, I restrict the disallowance on account of vehicle expenses to the extent of ₹ 25,000/- and ₹ 2,500/- on account of telephone expenses.