2011 (1) TMI 1503 - AT - Income Tax

Summary

Issues Involved:
1. Unexplained investment u/s 69 of the Act.
2. Travelling & conveyance expenditure.
3. Telephone expenditure.
4. Fooding charges.
5. Fuel charges.
6. Repair and maintenance.

Summary:

1. Unexplained Investment u/s 69 of the Act:
The department contested the deletion of an addition of Rs. 13,08,900/- made by the A.O. as unexplained investment u/s 69 of the Act. The assessee had advanced this amount to M/s. Ashok Leyland Finance Ltd. and showed it in the balance sheet. The A.O. added this amount as unexplained investment based on the Tax Audit Report, which stated that the loan could not be verified due to the absence of a balance confirmation certificate. However, the ld. C.I.T.(A) directed the deletion of this addition, noting that the investment was duly recorded in the books of accounts and supported by a confirmation certificate from M/s. Ashok Leyland Finance Ltd. The Tribunal upheld the ld. C.I.T.(A)'s order, emphasizing that the basic requirement of section 69 was not fulfilled since the investment was recorded in the books of accounts and adequately explained by the assessee.

2. Travelling & Conveyance Expenditure:
The A.O. disallowed Rs. 24,665/- out of the travelling & conveyance expenditure claimed by the assessee, citing that all bills were not produced. The ld. C.I.T.(A) deleted this addition, stating that the A.O. failed to point out specific instances where bills were not produced. The Tribunal upheld this decision, noting that the disallowance was made on an estimated basis without specific evidence.

3. Telephone Expenditure:
Similarly, the A.O. disallowed Rs. 9,371/- out of the telephone expenditure on the grounds of non-production of all bills. The ld. C.I.T.(A) deleted this addition, and the Tribunal upheld this decision, reiterating that the A.O. did not provide specific instances of missing bills and made an adhoc addition.

4. Fooding Charges:
The A.O. disallowed Rs. 32,459/- out of the fooding charges claimed by the assessee, again due to the non-production of all bills. The ld. C.I.T.(A) deleted this addition, and the Tribunal upheld this decision, emphasizing the lack of specific evidence from the A.O. to justify the disallowance.

5. Fuel Charges:
The A.O. disallowed Rs. 1,92,900/- out of the fuel charges, alleging non-production of supporting bills. The ld. C.I.T.(A) found that the assessee had furnished various details and supporting bills during the assessment proceedings and that the A.O. did not point out specific instances of missing bills. The Tribunal upheld the deletion of this addition, noting the A.O.'s failure to indicate specific defects or omissions.

6. Repair and Maintenance:
The A.O. disallowed Rs. 15,780/- out of the repair and maintenance charges on similar grounds of non-production of supporting bills. The ld. C.I.T.(A) deleted this addition, and the Tribunal upheld this decision, citing the same reasons as for the fuel charges.

Conclusion:
The Tribunal dismissed the department's appeal, upholding the ld. C.I.T.(A)'s order to delete all the additions made by the A.O. The Tribunal emphasized the importance of specific evidence and proper justification for any disallowance or addition made by the A.O.