The Amritsar bench of Income Tax Appellate Tribunal (ITAT) has held that disallowance of expense is not sustainable when the non-availability of expense vouchers happened due to a flood.
The assessee is a partnership firm that has been carrying out its business under the name of ‘M/s Kashmir Motors’ for which filed its return of income through electronic mode declaring an income of Rs.6,89,072/-. The Assessing Officer made ad-hoc disallowances in respect of vehicle maintenance, loading and unloading expenses etc. @ of 15% which was Rs.3,29,677/- and added into the income of the assessee.
CIT(A) on appeal after considering the submissions and material placed before him sustained the addition to the extent of 10% of the expenses. The assessee contended that due to the flood, material evidence was washed away and FIR was duly registered
On contrary, the revenue stated that the disallowance was made on account of the non-furnishing of the vouchers and bills.
Shri Kul Bharat, Judicial member observed that the assessee failed to substantiate the expenditure and the accounts of the assessee were duly audited. The Tribunal observed that the auditor had no adverse inference regard to the contention of the more particularly the contention of the assessee that the record was washed away due to flood.
The Tribunal viewed that the authorities below have not pointed out any specific absence of the vouchers and directed the AO to delete the addition. The appeal filed by the assessee is allowed. Sh. Manpreet Singh Duggal appeared for the revenue while the assessee made a written submission.
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