Disallowance made by AO due to Non-Submission of Business Vouchers: ITAT Directs Re-adjudication [Read Order]

The Pune bench of the Income Tax Appellate Tribunal (ITAT) directed re-adjudication to the assessing officer for the disallowance made on the ground of the nonsubmission of business vouchers. 

Garve Motors Private Limited, the appellant assessee was a private limited company that was an authorized dealer of Hyundai Cars. The assessee claimed deduction of expenses under the head “Other Expenses” the details of which were reproduced by the assessing officer. The explanation and documents filed by the assessee, on verification, that some of the vouchers are not supported by the evidence and are handmade. Thus the assessing officer disallowed the deduction of expenses to 10%. 

Thus the assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the disallowance made by the assessing officer. 

Deepa Khare, the counsel for the assessee contended that the assessing officer did not comment about the genuineness of the expenditure and only doubted that some of the vouchers by holding they are handmade. 

It was also submitted that the assessee cannot submit the supporting evidence for every expenditure incurred during the business for which the assessee made such vouchers on its own and the inability to produce the same as they were running into huge volumes of vouchers. Therefore, in the absence of such vouchers for the examination there was no alternative except to concur with the finding of authorities. 

Ramnath P. Murkunde, the counsel for the revenue contended that the assessee failed to furnish evidence in support of expenditure incurred and supported the decisions made by the lower authorities. 

The bench observed that the only remark made by the assessing officer was that no evidence was furnished by the assessee in respect of some of the vouchers which are handmade and doubting the same disallowed on an ad-hoc basis and the counsel for the assessee submitted the inability to produce all the vouchers. 

The two-member bench comprising S.S. Viswanethra Ravi ( Judicial ) and G.D. Padmahshali (Accountant) directed the assessing officer to re-adjudicate the matter and directed to restrict the disallowance to 5% in the interest of justice while allowing the appeal filed by the assessee.

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