The Income Tax Appellate Tribunal (ITAT), Amritsar bench has held that expenses vouched and verified incompletely will invalidate the addition to the Income.
Shri Kul Bharat, Judicial member observed that the Assessing Officer acted purely ad-hoc and has not specified the vouchers that were not available and directed to delete the addition of Rs.1,02,350/-.
The appellant challenged the order of CIT (A) which sustained the addition to the extent of Rs. 1,02,350/- made by ITO on the ground of non-availability of vouchers etc. in support of expenses claimed in books of account.
The appellant assessee is a partnership firm which has filed its return of income through electronic mode declaring an income of Rs.13,98,726/-. The Assessing Officer made an ad-hoc disallowance out of various expenses of Rs. 1,02,350/-. Further, it was observed by the Assessing Officer that the assessee claimed an amount of Rs.20,91,883/- under the head of ‘Building Repairs and Renovations’ and disallowed the sum of Rs. 4,76,068/- allowed depreciation of Rs. 29,455/-.
The AO noticed that the assessee claimed excessive depreciation of Rs.67,500/- and the same was added to the income of the assessee. CIT(A) on appeal confirmed the disallowance of expenditure of Rs.1,02,350/-, disallowance of Rs. 4,76,068/- and deleted the addition of Rs. 8,714/-.
It was contended that the AO has made a sweeping statement without specifying the vouchers that were not available. The assessee has stated that the expenditure was on account of renovation and replacing of existing worn-out & damaged wooden flooring with new wooden flooring by treating it as a capital expenditure instead of Revenue expenditure. In contra, revenue contended that the assessee failed to prove that he has not enjoyed the enduring benefit of such expenditure.
It was observed by the Tribunal that there was no material suggesting that expenditure did not give enduring benefit to the assessee and such expenditure was a regular feature which was claimed earlier. It was observed that the expenses were not completely vouched and were not fully verifiable. The appeals filed by the assessee were partly allowed. Shri Manpreet Singh Duggal appeared on behalf of the respondent.
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