Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Home Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles News Highlights
Extracts
Home List
← Previous Next →

Mahendra Kumar Saha Versus Assistant Commissioner of Income-Tax

2016 (5) TMI 236 - ITAT CUTTACK

Disallowance made under the head 'staff welfare expenses - Held that:- None of these expenses were incurred for personal benefit of the assessee and the authorities below have not brought out any direct evidence that these expenses were incurred for the personal benefits of the assessee. The learned Commissioner of Income-tax (Appeals) in his order has extensively dealt with the case of CIT v. Lakshmi Vilas Bank Ltd. (2014 (4) TMI 827 - MADRAS HIGH COURT ) wherein suggested that the tax authorit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act. No adverse inference has been drawn by the auditor. Taking the guidance of various judicial pronouncements, we concur with the findings of higher judicial authority that the tax authorities must consider the claims in reasonable and practical manner. The disallowance of petty nature of expenses makes hardly any impact on overall revenue collection but such disallowance creates a lot of dissatisfaction amongst taxpayers. - Decided in favour of assessee - I. T. A. No. 54/CTK/2015 - Dated:- 23 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the learned Commissioner of Income-tax (Appeals) was not justified in law in retaining a disallowance of ₹ 1,00,000 out of the disallowance made under the head 'staff welfare expenses' of ₹ 73,790 and 'repair and maintenance' expenses of ₹ 1,52,736 made by the Assessing Officer totalling to ₹ 2,26,526 even after appreciating that no businessman can be prevented from spending money on the staff member employed by him, and for non-production of bills and vo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

proved. (3) That since the learned Commissioner of Income-tax (Appeals) appreciated the fact that the aforesaid judgment is applicable to the facts of the instance case, he should have applied the same in entirety and is not justified in retaining the disallowance of ₹ 1,00,000 out of the same. (4) That the statement of facts and ground of appeal submitted before the learned Commissioner of Income-tax (Appeals), along with Form 35 may kindly be considered as a part of this ground of appea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se was selected for scrutiny and notices under sections 143(2) and 142(1) were issued and served on the assessee. The Assessing Officer completed the assessment under section143(3) of the Act with the assessed income at ₹ 27,89,830. In the first appeal, the learned Commissioner of Income-tax (Appeals) partly allowed the appeal. 4. During the course of assessment proceedings, the Assessing Officer noticed that the assessee has claimed the expenses of ₹ 73,790 under the head "staf .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s not produced the original bills and vouchers for all the expenses and in some cases handmade vouchers have been produced. Keeping in view of the nature of expenses claimed by the assessee, the Assessing Officer disallowed 10 per cent. of total claim in the absence of original vouchers and added ₹ 1,52,736 to the total income of the assessee. Being aggrieved, the assessee carried the matter on appeal before the learned Commissioner of Income-tax (Appeals). 5. Before the learned Commission .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t these were actually incurred. In this context, amongst various other judicial precedents that allow expenses even in the event of non-production of bills/vouchers, the learned Commissioner of Income-tax (Appeals) referred to the hon'ble Madras High Court in the case of CIT v. Lakshmi Vilas Bank Ltd. 2014 (4) TMI 827 (Mad) (Tax Case (Appeal) No. 896 of 2013, dated April 16, 2014). In that case "the assessee is a bank and an organised and large entity. The banks maintain proper books of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

expenses is not justified. It is true that there can become personal element of expenses but such expenses are incurred by employees. For example, while entertaining the bank customers with tea and snacks, a bank officer also participate, some phone calls may be made to home by officers, sometime banks car may be used for personal purposes. However, all such personal use or expenses are in the course of business and are normal business expenses. Some benefits or privilege might have been derived .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t draw unreasonable inferences based on some unreasonable apprehensions. They must place themselves in a position of the assessee and consider the claims in a reasonable and practical manner. Disallowances of petty nature of expenses makes hardly any impact on overall revenue collection but such disallowances creates a lot of dissatisfaction amongst taxpayers, lot of litigation which causes wasteful expenditure from public funds also". However, while considering the facts of the assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

v. Asst. CIT [2000] 73 ITD 365 (Nagpur) and Lavrids Knudsen Maskinfabrik (India) Ltd. v. Addl. CIT [2006] 102 TTJ (Pune) 882. In the case of Pushpanjali Dyeing and Printing Mills P. Ltd. v. Joint CIT [2001] 72 TTJ (Ahd) 886 it was held that the assessee having maintained complete books of account in accordance with the provisions of the Income-tax Act which are audited by the auditor and no adverse observations having been pointed out by the auditor, there was no justification for rejection of b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mply on the basis of a genera! allegation that the expenses were not verifiable, particularly when the assessee has shown better results than in past. In the case of Lavrids Knudsen Maskinfabrik (India) Ltd. v. Addl. CIT [2006] 102 TTJ (Pune) 882, it was held that estimated ad hoc addition based on suspicion and surmises should be deleted. 7. The learned Department representative supported the order of the learned Commissioner of Income-tax (Appeals). 8. Having heard the rival contentions and pe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Forum
what is new what is new
  ↓     bird's eye view     ↓  


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version