2022 (9) TMI 1515 - AT - Income Tax

Addition of expenditure incurred u/s 57 - assessee during the assessment proceedings failed to furnish the details of the expenses - HELD THAT - In the case on hand, the assessee has shown gross income from other sources against which a deduction of was claimed u/s 57 - But both the authorities below have disallowed the same i.e. deduction/expenses in the absence of necessary documentary evidence. Even at the time of hearing before us, AR in the written submission has submitted that the gross amount of income cannot be taxed without allowing the corresponding expenses which were claimed in the return of income. However, the onus lies upon the assessee to furnish the necessary documentary evidences in support of the claim made in the income tax return. If the assessee fails to discharge the onus, there is no remedy available to the revenue to disallow the claim of the assessee. Nevertheless, in the interest of justice and fair play we are inclined to give one more opportunity to the assessee to produce the necessary documentary evidence in support of his contention before the AO. Hence, the ground of appeal raised by the assessee is allowed for the statistical purposes.

Summary

Issues:
1. Appeal against the order of the Ld. Commissioner of Income Tax-(Appeals) regarding assessment order under Section 144 of the Income Tax Act, 1961 for Assessment Year 2011-12.
2. Challenge on various grounds including lack of opportunity, improper service of notice, violation of principles of natural justice, and addition of specific amounts.
3. Dispute over confirming the addition made by the AO for Rs. 9,73,562/- representing expenditure under Section 57 of the Act.

Analysis:

Issue 1: Appeal against the CIT(A) order
The appellant challenged the assessment order under Section 144 of the Income Tax Act, 1961 before the Appellate Tribunal. Various grounds were raised, including errors in law and facts, lack of opportunity, improper service of notice, and violation of principles of natural justice. The appellant sought annulment of the order based on these grounds, citing legal precedents to support the arguments.

Issue 2: Grounds raised by the assessee
The appellant raised multiple grounds of appeal, contesting the addition made by the AO, lack of notice, denial of material, and violation of natural justice principles. The appellant also disputed the addition of Rs. 9,73,562/- and other specific amounts, arguing for their deletion based on irrelevant material and non-consideration of available provisions under the Act. The appellant sought suitable reduction, citing legal guidelines and precedents.

Issue 3: Dispute over addition under Section 57
The main issue raised by the assessee was the confirmation of the addition of Rs. 9,73,562/- representing expenditure under Section 57 of the Act. The assessee failed to furnish details of the expenses during assessment proceedings, leading to the disallowance by the AO. The CIT(A) upheld the AO's decision, emphasizing the onus on the assessee to provide evidence for claimed deductions. The Tribunal allowed the appeal for statistical purposes, granting the assessee another opportunity to produce necessary documentary evidence before the AO.

In conclusion, the Appellate Tribunal allowed the appeal for statistical purposes, providing the assessee with another chance to present documentary evidence supporting the claimed deductions. The judgment highlighted the importance of fulfilling the onus to substantiate deductions and emphasized the principles of natural justice and fair play in tax assessments.