At, Income Tax Appellate Tribunal Chandigarh
By, THE HONOURABLE MR. SANJAY GARG
By, JUDICIAL MEMBER & THE HONOURABLE DR. B.R.R. KUMAR
By, ACCOUNTANT MEMBER
For the Appellant: T.N. Singla, Advocate. For the Respondent: Manjeet Singh, Advocate.
DR. B.R.R. Kumar, A.M:
1. The present appeal has been filed by the Assessee against the order of the Ld. CIT(A)-1 Chandigarh dt. 29/09/2017.
2. In the present appeal Assessee has raised following grounds:
1. That the order of Hon'ble CIT(A) is bad, against the facts & Law.
2. That the Hon'ble CIT(A) has wrongly upheld the disallowance of expenses of Rs. 20,000/- paid for club membership and subscription.
3. That the Hon'ble CIT(A) has wrongly upheld disallowance of EPF and ESI expenses of Rs. 32,139/-
4. That the Hon'ble CIT(A) has wrongly disallowed part of the expenses incurred on running and maintenance of car.
5. That the Hon'ble CIT(A) has wrongly given direction to enhance the income of A.Y. 2014-15 by Rs. 5,51,000/- without appreciation of facts and without giving any show caused in this regard.
3. Ground no. 1 is general in nature.
4. Ground no. 2 not pressed.
5. Ground no. 3 relates to addition of Rs. 32,139/- on account of non- payment of EPF and ESI in the respective accounts. The Ld. AR submitted that it was paid before the due date of filing of the return. Hence as per provision to the Section 43B(b) this addition made by the Assessing Officer is not warranted and hence hereby directed to be deleted.
6. Ground no. 4 pertains to disallowance of expenses of Rs. 1,91,626/- on account of Car maintenance. The Ld. AR submitted that the payment of the car was made from the funds of the company and used by the company though the RC shows the name of the Director. All the running expenses were for the business of the company and claimed in the books of accounts and so as the depreciation.
7. Ld. DR relied on the order of the Ld. CIT(A) who restricted the disallowance to 1/5th of the total expenses.
8. Since the Car was purchased and used by the company wholly for the business purpose and Revenue has not brought anything on record to prove the non business use of the car, no disallowance is called for.
9. Ground No. 5 relates to enhancement of income for the A.Y. 2014-15. Brief facts of the issue are that the assessee has received advance payment from one entity namely Laxmi Trading Co. of Rs. 5,51,000/- on 01/02/2011 vide Cheque No. 463496 and the material was dispatched to Laxmi Trading Co. on 03/02/2011 through Shauryaveer Enterprises vide Bill No. 1366 and Vehicle No. H.P. 12C 2335 weighing 14.10 Tons. The documents pertaining to the transport of goods were produced and were accepted by the Revenue the fact of which was accepted by the Ld. CIT(A) also.
10. However, the Ld. CIT(A) directed that since the amount was squared off on 31/03/2014 with Shauryaveer Enterprises in 2014 it should be assessed in the A.Y. 2014-15. It was submitted before us, that the advance has received, and the material was supplied through the sister concern Shauryaveer Enterprise in the same year no addition was called for in the subsequent years. The assessee produced the ledger copies of Shauryaveer Enterprise in the books of account of the assessee
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, ledger copy of the assessee and the books of account of Shauryaveer Enterprise, and also copy of account of Laxmi Trading Co. in the books of the assessee which proves the completion of the transaction to the hilt. Hence the directions of the Ld. CIT(A) are found to be invalid. 11. As a result, the appeal of the Assessee is allowed.