2012 (9) TMI 655 - AT - Income Tax

Assessee is an C&F agent - Incurred expenses on behalf of the company, which were claimed to be reimbursed by it Addition made on account of non-disclosure of receipt Held that - On consideration of record and the assertion made by assessee, issue remand back to the file of AO to examine the correct nature of these expenses. Issue remand back to AO. Addition on account of Same opening & closing balances of creditors in a FY - Assessee firm was having opening balance of Rs. 13,15,955/- as on 31.3.2006 of sundry creditors including debtors and the entire list of 31 sundry creditors in Schedule-C in the balance sheet (as on 31.3.2007) is exactly the same as on 31.3.2006 - These sundry creditors were owing to the trading activities with the assessee firm, carried out until the end of the preceding year Held that - Assessee furnished the ledger accounts of the respective parties for the assessment year 2008- 09 wherein these were paid off. the opening balances have been duly explained by the assessee. These are not in agreement with the finding in the impugned order that new credits were introduced during the year which resulted into sustenance of addition. Appeal decides in favour of assessee. Addition on account of Cash Credit u/s 68 In spite of opportunity given by the AO, no such confirmations was filed by the assessee - Confirmation was filed before CIT(A) - Held that - Issue remand back to the file of the AO with a direction to examine the claim of the assessee.

Summary

Issues:
1. Addition of Rs.2,77,943 on account of non-disclosure of receipts.
2. Addition of Rs.2,98,251 without considering filed evidence.
3. Sustaining the addition of Rs.48,000 under section 68 of the Act.

Analysis:
1. The first issue relates to the addition of Rs.2,77,943 due to non-disclosure of receipts by the assessee. The contention was that the receipts shown as contract receipts were not disclosed in the profit and loss account, leading to the addition. The Assessing Officer considered these receipts as reimbursement of contract receipts and held them as unaccounted. However, the Tribunal remanded this issue back to the Assessing Officer to examine the nature of these expenses and decide accordingly, providing the assessee with an opportunity to substantiate its claim with evidence. The ground was allowed for statistical purposes only.

2. The second issue involves the addition of Rs.2,98,251 without considering the filed evidence. The assessee argued that the sundry creditors mentioned in the balance sheet were the same as the previous year, except for a small amount. The Tribunal found the explanation satisfactory, noting that the ledger accounts of the respective parties were furnished and the opening balances were duly explained. Consequently, this ground was allowed in favor of the assessee.

3. The final issue pertains to the addition of Rs.48,000 under section 68 of the Act. The assessee claimed confirmations were filed before the CIT(A), while the Assessing Officer stated otherwise. The Tribunal decided to remand this issue back to the Assessing Officer for further examination in accordance with the law, providing the assessee with an opportunity to present evidence to support its claim. This ground was also allowed for statistical purposes. Overall, the appeal of the assessee was partly allowed for statistical purposes, with the Tribunal providing detailed reasoning and directions for each issue discussed during the hearing.