Case Number: ITA 1449/DEL/2020
Appellant: Rajiv Gupta, New Delhi
Respondent: ITO Ward-63(5), New Delhi
Assessment Year: 2015-16
Case Filed On: 2020-07-30
Order Type: Final Tribunal Order
Date of Order: 2021-12-17
Date of Pronouncement: 2021-12-17
The Income Tax Appellate Tribunal (ITAT) Delhi “SMC-2” Bench heard the appeal filed by Rajiv Gupta, New Delhi, against the Income Tax Officer (ITO) Ward-63(5), New Delhi, for the assessment year 2015-16. The appeal was directed against the orders of the learned Commissioner of Income Tax (Appeals) [CIT(A)]-20, New Delhi, dated 26.02.2020.
The appellant, Rajiv Gupta, had filed a return of income on 30.07.2015 declaring an income of Rs. 9,42,580/-. The case was selected for scrutiny, and the assessment was initially framed by the Assessing Officer (AO) under section 143(3) of the Income Tax Act, 1961, on 25.04.2016, assessing the income at Rs. 9,42,580/-. However, the assessment was revised by the Pr.CIT, Delhi-21, directing the AO to re-examine the issues. The revised order assessed the income at Rs. 27,75,170/-, making several disallowances, including:
Aggrieved by the revised assessment, Rajiv Gupta appealed before the CIT(A), who partly allowed the appeal but confirmed the addition of Rs. 13,93,501/- and the interest of Rs. 1,50,000/- claimed under section 24(b).
Rajiv Gupta then appealed to the ITAT. The appeal was delayed by 75 days, which the appellant attributed to the spread of COVID-19. The Tribunal condoned the delay, considering the extraordinary circumstances.
The effective ground of the appeal was against the confirmation of the addition of Rs. 13,93,501/- made on account of disallowance of expenses related to salary, staff welfare, and bonus.
The Tribunal observed that the addition was made purely on the basis of conjectures and surmises without any adverse material on record. The disallowance was made on the basis of guesswork, which is not permissible under law. The Tribunal noted that the authorities had not brought any evidence to show that the expenses claimed were excessive or unreasonable.
The Tribunal held that such a casual approach by the authorities could not be affirmed. No disallowance is permissible purely on the basis of guesswork. The Tribunal directed the AO to delete the addition, allowing the appeal in favor of Rajiv Gupta.
The ITAT Delhi “SMC-2” Bench ruled in favor of Rajiv Gupta, New Delhi, allowing the appeal and directing the deletion of the disallowed expenses related to salary, staff welfare, and bonus. This decision underscores the importance of substantiating disallowances with concrete evidence rather than making additions based on conjecture.
Order: Appeals allowed; disallowed expenses to be deleted.
Date of Order: 2021-12-17
Date of Pronouncement: 2021-12-17
Bench: Delhi “SMC-2” Bench
Members: Shri Kul Bharat, Judicial Member
Appellant Representative: Sh. S.L. Deepak, CA
Respondent Representative: Sh. Om Prakash, Sr. DR
Case Conclusion: The ITAT directed the AO to delete the addition of Rs. 13,93,501/-, ruling in favor of Rajiv Gupta.
ITA 1449/DEL/2020: Rajiv Gupta New Delhi vs. ITO Ward-63(5) New Delhi – Tax Dispute Resolution
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