2015 (12) TMI 1413 - AT - Income Tax

Undisclosed income - Held that - The assessee submits that this addition sum comprises of access money collection of ₹ 2,02,350/- as per a diary seized . The same is stated to have been received from four parties namely; Prasam Hajarnis, Mrs Anila, Mr. Dinesh, Mr. Kaushik and Mr. Jai Prakash to the tune of ₹ 20,750/- each in first two cases and ₹ 95,125/- , ₹ 45,125/- and ₹ 20,600/- respectively. These figures form part of record Annexure A- 4 page 65 of the paper book. The assessee claims to have returned these sums back to its above stated parties. We put up a specific query in the course of hearing as to whether it had filed any material on record in the shape of seized diary or other evidence proving the same. The reply given is in negative. This leads us to a conclusion that since the impugned excess collection is proved without any rebuttal of its being returned back to the payers, the Assessing Officer has rightly made the corresponding addition of ₹ 2,02,350/- in assessee s case. - Decided against assessee Disallowance of expenditure - Held that - The Assessing Officer has accepted assessee s expenses claimed regarding brokerage, misc. items and the once pertaining to specific payees in question. The assessee takes us to paper book containing names of four parties to have received the same. However, we do not find any vouchers, bills, and other documentary evidence forthcoming from the case file. The same appears to be the reason on Assessing Officer s part in disallowing these expenses. This position continues before us as well. We uphold the Assessing Officer s corresponding findings and hold that the assessee has not been able to substantiate its expenditure claim - Decided against assessee

Summary

Issues Involved:
Assessment of undisclosed income for block period, compliance with ITAT directions, method of accounting, estimation of undisclosed income, disallowance of expenses, computation of total income, appropriation of cash seized.

Analysis:

1. Assessment of Undisclosed Income for Block Period:
The appeal pertains to the block period from 01-04-1985 to 31-03-1995 & 01-04-1995 to 21-09-1995. The Assessing Officer had computed the total income at Rs. 15,66,759, which included an addition of Rs. 4,16,759 as undisclosed income. The assessee challenged this addition, specifically related to access money collection of Rs. 2,02,350. The Tribunal upheld the Assessing Officer's decision, as the assessee failed to provide evidence that the amount was returned to the payers, leading to the conclusion that the addition was justified.

2. Compliance with ITAT Directions:
The appellant contended that the Assessing Officer did not follow the directions of the Income Tax Appellate Tribunal (ITAT) while framing the order. However, the Tribunal did not find merit in this argument, as the appellant did not substantiate its claim with evidence, resulting in the dismissal of this ground.

3. Method of Accounting and Estimation of Undisclosed Income:
The appellant disputed the method of accounting followed by the Assessing Officer and the estimation of undisclosed income. The Tribunal noted that the Assessing Officer's estimation of undisclosed income and disallowance of expenses were based on lack of documentary evidence provided by the appellant. Consequently, the Tribunal upheld the Assessing Officer's findings in this regard.

4. Disallowance of Expenses and Computation of Total Income:
The Assessing Officer disallowed expenses claimed by the appellant, amounting to Rs. 2,14,409, due to the absence of supporting vouchers and bills. The Tribunal concurred with the Assessing Officer's decision, stating that the appellant failed to substantiate the expenditure claim, leading to the dismissal of this argument.

5. Appropriation of Cash Seized:
The appellant argued that the Assessing Officer did not properly compute the tax payable and failed to consider the appropriation available from cash seized during the proceedings under section 132. The Tribunal, however, did not find merit in this argument and dismissed the appeal.

In conclusion, the Tribunal dismissed the assessee's appeal, upholding the Assessing Officer's additions and disallowances due to the lack of substantiating evidence provided by the appellant. The judgment highlights the importance of maintaining proper documentation and evidence to support income, expenses, and other financial transactions during assessment proceedings.