2013 (10) TMI 646 - AT - Income Tax

Addition u/s 68 - Unproved booking amount Held that - The names, address and PAN of the creditors was known to the Revenue, still the AO has insisted on the assessee to furnish the confirmation and in the absence thereof, he made the addition u/s. 68 of the I.T. Act - assessee has duly discharged its onus - If the AO was not satisfied, he could have summoned the creditor by issuing the notice u/s. 131 of the I.T. Act - AO has not done this exercise the amount received cannot be treated as undisclosed income of the assessee. Addition out of total vehicle expenses - AO has not pointed out as to which of the vouchers were not available - He has made an addition on estimate basis without pointing out the specific shortcomings - when the AO has not been able to point out the specific defects, the addition in this regard is not sustainable - the orders of the authorities below set aside Decided in favour of Assessee.

Summary

Issues:
1. Addition of Rs. 5.20 lacs to assessee's income as unproved booking amount.
2. Estimated addition of Rs. 25,000/- out of total vehicle expenses.

Analysis:

Issue 1: Addition of Rs. 5.20 lacs
The assessee, engaged in civil construction business, claimed to have received an advance of Rs. 5.20 lacs from a party but failed to provide confirmation despite multiple opportunities. The Assessing Officer (AO) invoked section 68 of the Income Tax Act, considering the amount as undisclosed income. The assessee argued that the creditor's details were submitted to the AO, and the amount was later repaid. The Commissioner of Income Tax (Appeals) upheld the addition. However, the ITAT Delhi found that the assessee had fulfilled its onus by providing creditor details, and the AO should have issued a notice under section 131 for verification. Referring to case law, the tribunal ruled in favor of the assessee, setting aside the lower authorities' orders.

Issue 2: Estimated addition of Rs. 25,000/-
The AO disallowed Rs. 25,000 from the claimed vehicle expenses of Rs. 1,11,208 due to missing supporting bills and vouchers. The Commissioner (Appeals) upheld this addition. The ITAT Delhi observed that the AO did not specify the exact deficiencies in vouchers and made an estimate-based addition without clear identification of shortcomings. Consequently, the tribunal deemed the addition unsustainable and ruled in favor of the assessee, setting aside the lower authorities' decisions.

In conclusion, the ITAT Delhi allowed the appeal filed by the assessee, setting aside the additions made by the lower authorities in both issues.