2020 (1) TMI 495 - AT - Income Tax

Addition made u/s 68 - Addition on account of bogus purchases on fixed assets - assessee could not justify the genuineness of the cash credits nor could furnish any evidences in support of its claim of purchases of its assets - HELD THAT - Since the fixed assets were treated as bogus, denial of depreciation was also confirmed. As carefully perused the findings of the ld. CIT(A). As mentioned elsewhere, none appeared on behalf of the assessee. Since nothing has been provided to us by the assessee, we decline to interfere with the findings of the ld. CIT(A). Grounds raised by the assessee stand dismissed. Bogus claim of depreciation - HELD THAT - Since in A.Y 2010-11 supra we have treated the entire purchases of fixed assets as bogus, there is no question of any allowance of depreciation. In respect of other assets, we find that no supporting evidences have been furnished and, therefore, denial of depreciation is justified. Claim of expenditure - onus is upon the assessee to furnish necessary evidences in support of its claim of expenditure. Since no documentary evidences have been furnished, the addition on account of non availability of bills in respect of expenses is confirmed. Accordingly, all the Grounds raised by the assessee stand dismissed.

Summary

Issues:
1. Assessment Years 2010-11 and 2011-12 - Common issues in two separate appeals.

Analysis:

Assessment Year 2010-11:
1. The case involved a search and seizure action under section 132 of the Income Tax Act, 1961, on a group of cases, including the assessee.
2. The Assessing Officer made additions of unexplained cash credit, bogus claim of depreciation, unexplained investment in properties, and treated purchases of fixed assets as bogus.
3. The assessee failed to provide necessary evidence or explanations during the assessment and appellate proceedings.
4. The ld. CIT(A) upheld the additions, emphasizing the failure of the assessee to meet the primary requirements of identifying creditors/shareholders, creditworthiness, and genuineness of transactions.
5. The appellate tribunal, after perusing the findings, declined to interfere with the CIT(A)'s decision due to the absence of the assessee's representation, thereby dismissing the grounds raised by the assessee.

Assessment Year 2011-12:
1. The Assessing Officer disallowed depreciation and made additions due to lack of documentation and maintenance of books of account by the assessee.
2. The assessee failed to substantiate its claims during the assessment and appellate proceedings.
3. The tribunal, considering the disallowance of fixed assets purchases in the previous year, denied depreciation and upheld the addition of expenses due to the absence of supporting evidence.
4. The onus was on the assessee to provide necessary documentation for expenditure claims, which the assessee failed to do, resulting in the confirmation of additions.
5. Consequently, all grounds raised by the assessee for both assessment years were dismissed, and the appeals were ultimately rejected by the tribunal on 09.01.2020.