The Surat bench of Income Tax Appellate Tribunal (ITAT) recently allowed Tax Deduction at source credit because the documents of assessee were lost due to flood.
During the assessment proceedings, the assessee Sheel Engineers was asked to furnish the bills and vouchers of expenses debited to Profit and Loss account. However, no such bills and vouchers were produced by the assessee. Further during the course of revision proceedings under section 263 of the Income Tax Act 1961 assessee did not submit the bill required by the assessing officer.
Further Assesee submit their contention before the assessing officer which was not accepted and disallowed the claim.Against this order assesee filed appeal before Commissioner of Income Tax Appeal who has deleted the addition made by Assessing Officer observed that payments were made by assessee through crossed account payee cheques, and TDS are deducted wherever applicable and assessee`s net profit ratio and gross profit ratio did not show major changes. Against this order revenue filed an appeal before ITAT.
Suresh K. Kabra counsel for the assessee contended that due to flood the bills and Vouchers were destroyed in the flood, therefore the assessee could not submit the bills, vouchers before the Assessing Officer.
Ashok B. Koli counsel for revenue submit that “assessee has neither submitted bills and vouchers before the assessing officer nor before CIT(A) without bills and vouchers, the scrutiny assessment is not completed, therefore the matter may be remitted back to the file of the Assessing Officer for fresh adjudication with the direction to the assessee to submit bills and vouchers”.
After considering the contentions of the both parties the division bench of ITAT comprising Pawan Singh, (Judicial Member) and Dr. A. L. Saini, (Accountant Member) allow the dismiss the appeal filed by the revenue and “observed that CIT(A) had gone through the Gross Profit, Net Profit chart, which are indicating the percentage of major expenses over turnover and it is observed that labour charges for current assessment year is 20.49 % of the turnover as compared to labour charges of 21.60% of the turnover in immediately preceding assessment year 2011-12. Similarly, all other major expenses did not show any major deviation when compared with immediate preceding assessment year”
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