2012 (11) TMI 842 - AT - Income Tax

Tribunal Upholds Disallowances & Additions in Expenses for Assessment Year 2003-04

M/s. Malhotra Book Depot, Versus. Assistant Commissioner of Income Tax, Range-IV,

M/s. Malhotra Book Depot, Versus. Assistant Commissioner of Income Tax, Range-IV, - TMI Issues:1. Disallowance of stipend account expenses2. Disallowance of telephone expenses3. Disallowance of vehicle running and maintenance expenses4. Disallowance of traveling expenses5. Disallowance of expenses of Palwal unit6. Disallowance of bills for telephone, water, electricity, and advertisement7. General grounds raised by both partiesIssue 1: Disallowance of Stipend Account Expenses:The assessee claimed expenses in the stipend account without providing evidence. The AO disallowed the entire amount of Rs.5,00,523. The Ld. CIT(A) upheld 50% disallowance due to lack of evidence. The Tribunal noted the past allowance of similar claims but upheld the 50% disallowance, finding it fair and reasonable given the absence of supporting evidence.Issue 2: Disallowance of Telephone Expenses:The AO disallowed Rs.1,33,124 for personal use of the telephone due to missing bills. The Ld. CIT(A) reduced the disallowance to Rs.20,000 considering the lack of complete records. The Tribunal affirmed this decision as reasonable.Issue 3: Disallowance of Vehicle Running and Maintenance Expenses:A disallowance of Rs.2,00,000 was made for personal vehicle use, reduced to Rs.50,000 by the Ld. CIT(A). The Tribunal upheld this decision, rejecting the claim that vehicles were not used personally.Issue 4: Disallowance of Traveling Expenses:A disallowance of Rs.3,00,000 was made for lack of proper bills. The Ld. CIT(A) limited the disallowance to Rs.10,000, which the Tribunal found appropriate given the circumstances.Issue 5: Disallowance of Expenses of Palwal Unit:A disallowance of Rs.2,00,000 was made due to discrepancies in bills. The Ld. CIT(A) restricted the addition to Rs.25,000, which the Tribunal upheld, considering the evidence presented.Issue 6: Disallowance of Bills for Telephone, Water, Electricity, and Advertisement:An addition of Rs.10,038 was made based on debiting bills of the last year in the current financial year. The Ld. CIT(A) confirmed this action, which the Tribunal found justified due to the evidence presented.General Grounds:General grounds raised by both parties were not adjudicated upon as they were of a general nature.In conclusion, both the assessee's and the Revenue's appeals were dismissed by the Tribunal, upholding the decisions made by the Ld. CIT(A) on various disallowances and additions in expenses for the assessment year 2003-04.