The Delhi Bench of Income Tax Appellate Tribunal has held that Assessing Officer fails to point out on which bills and vouchers disallowance is made and deletes estimated addition.
The appellant, Agarwal Print Media, is a partnership firm and filed its return of income declaring income at Nil. While conducting scrutiny assessment the AO made ad hoc disallowance of Rs. 3,00,000/- out of salary & wages expenses; Rs. 1,00,000/- out of other expenses; and Rs. 1,00,000/- out of job work. The CIT (A) sustained the addition and hence, the assessee filed an appeal before ITAT.
The counsel for the appellant submitted that the appellant discharged its onus by bringing on record complete details of the expenses incurred and there is no allegation of the bogus expenditure. The firm maintains books of account, cash books, ledger bills,s, etc. which have been duly audited.
The Coram of Mr. Kul Bharat, Judicial Member has observed that the three items of the expenses have been disallowed on an estimate basis. The basis of such disallowances is the incompleteness of the bills and vouchers. The Assessing Officer failed to point out as to which bills and vouchers were found to be wanting.
The Tribunal by relying on its own judgment in Tripat Kaur Vs. ACIT has held that “the assessing authority has disallowed the expenses purely on the basis of estimation without specifying the instances where the vouchers were found to be incomplete or missing. Therefore, respectfully following the binding precedence, I direct the Assessing Officer to delete the addition. Grounds of appeal are allowed”.
Advocates Mr. Devashish Bhadouria and Mr. Shamsher Singh appeared on behalf of the appellant and Mr. Om Prakash appeared on behalf of the respondent.
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