Rejection of books of accounts by invoking provisions of Section 145(3) of the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR

BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM

ITA. No. 339/JP/2019

Assessment Years : 2012-13

Shri Anil Kumar Garg
60, Rajmal Ka Talab, Chandi Ki Taksal,
Jaipur

vs

The ITO,
Ward-5(1),
Jaipur.

Assessee by : Shri Vedant Agarwal (Adv.)

Revenue by : Smt. Monisha Chaudhory (Addl.CIT)

Date of Hearing : 13/10/2021

Date of Pronouncement : 21/10/2021

ORDER

This is an appeal filed by the assessee against the order of ld. CIT(A)-1, Jodhpur (Camp at Jaipur) dated 18.12.2018 pertaining to assessment year 2012-13.

2. In ground No. 1, the assessee has challenged the rejecting of books of account by invoking the provisions of Section 145(3) of the Act. During the course of hearing, the ld. AR of the assessee has not pressed the ground No. 1. Hence, the same is dismissed as not pressed.

3. In ground No. 3, the assessee has challenged the lump sum disallowance of Rs. 20,000/- out of certain expenses claimed in its profit/loss account. During the course of hearing, the ld. AR submitted that these expenses relates to telephone, mobile, vehicle running & maintenance and depreciation on car and submitted that all these expenses were reasonable and incurred for business purposes only and no specific expenditure has been identified by the Assessing Officer which is not related to the assessee’s business. It was accordingly submitted that the disallowance so confirmed by the ld. CIT(A) may kindly be deleted. Per contra, the ld. DR has relied on the lower authorities and submitted that during the course of assessment proceedings, the Assessing Officer on perusal of tax audit report noted that the tax auditor has reported that “it is not possible to identify the personal element involved, if any, in the telephone expenses and running and maintenance expenses incurred during the year”. Accordingly, the Assessing Officer has disallowed an amount of Rs. 20,000/- only out of total expenditure of Rs. 1,82,510/- on account of personal and non business used. was accordingly submitted that considering the above facts and circumstances of the case, the nature and involvement of the assessee’s business, the ld. CIT(A) has rightly upheld the disallowances of Rs. 20,000/- to cover possible leakage on account of personal expenses. It was accordingly submitted that there is no infirmity in the order so passed by the ld. CIT(A) and the same may be confirmed.

4. In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open Court on 21/10/2021.

Please find attached the enclosed file for the full judgement.