2019 (2) TMI 625 - AT - Income Tax

Addition made on account of understatement of two receipts in respect of BHEL - Held that - We are unable to endorse the finding of CIT(A) in the absence of any assistance from the assessee or its counsel. It is needless to mention it is the responsibility and onus is on the respondent assessee to file all the documents in support of its claim before this Tribunal. Since there is no documents evidencing support of assessee s claim and view of CIT(A), we set aside the order of CIT(A) and restore the order of Assessing Officer. Thus grounds raised by the revenue are allowed.

Issues Involved:
1. Validity of the Assessing Officer's addition of ?41,09,398/- and ?10,43,637/- to the total income of the assessee.
2. Examination of the evidence provided by the assessee regarding contract receipts from SNC Power Corporation Pvt. Ltd. and BHEL.
3. Justification of the CIT(A)'s decision to delete the additions made by the Assessing Officer.
4. The responsibility of the assessee to provide supporting documents before the Tribunal.

Issue-wise Detailed Analysis:

1. Validity of the Assessing Officer's Addition:
The Assessing Officer (AO) added ?41,09,398/- and ?10,43,637/- to the total income of the assessee, citing non-corroborating evidence for the opening balance as on 01.04.2009 and the deliberate non-production of party ledger accounts for BHEL. The AO claimed a shortfall in contract receipts from SNC Power Corporation Pvt. Ltd. and an understatement of contract receipts from BHEL.

2. Examination of Evidence Provided by the Assessee:
The assessee challenged the AO's additions before the CIT(A). The CIT(A) examined the audited balance sheet and found that the contract receipts from SNC Power Corporation Pvt. Ltd. were correctly shown as ?2,27,80,457/-. The CIT(A) noted that SNC Power Corporation Pvt. Ltd. did not deny the receipt and that adjustments such as TDS and security deposits were made. Regarding BHEL, the CIT(A) found that the AO did not follow proper accounting policies and that the receipts were accurately reflected in the profit and loss account and TDS certificate.

3. Justification of CIT(A)'s Decision:
The CIT(A) held that the AO's method of deriving the understatement of contract receipts was flawed and not supported by accounting principles. The CIT(A) explained that the AO's calculations involved a mix of mercantile and cash accounting systems, which was incorrect. The CIT(A) concluded that the addition of ?41,09,398/- was not sustainable and deleted it. Similarly, for BHEL, the CIT(A) found that the AO's addition of ?10,43,637/- was unjustified as the amount was settled in the subsequent assessment year and was reflected in the TDS certificate and ledger.

4. Responsibility of the Assessee to Provide Supporting Documents:
The Tribunal noted that the assessee did not appear for the hearing nor provided any supporting documents to substantiate its claims. The Tribunal emphasized that it is the responsibility of the assessee to file all necessary documents in support of its claims. Due to the lack of evidence from the assessee, the Tribunal set aside the order of the CIT(A) and restored the order of the Assessing Officer, allowing the revenue's appeal.

Conclusion:
The Tribunal allowed the revenue's appeal and dismissed the assessee's cross objection, emphasizing the importance of the assessee's responsibility to provide supporting documents. The Tribunal restored the AO's additions to the total income of the assessee, highlighting flaws in the CIT(A)'s reasoning and the absence of evidence from the assessee.

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