2021 (9) TMI 1270 - AT - Income Tax

Addition of 20% of the expenses and addition u/s 68 - non-appearance of the assessee before the A.O. and non-filing of the details - HELD THAT - It is an admitted fact that due to non-appearance of the assessee before the A.O. and non-filing of the details, the A.O. made various additions to the total income of the assessee. We find the Ld. CIT(A) in his elaborate order has sustained the various additions made by the A.O. So far as the disallowance of 20% of the expenses perusal of the detail of the expenses show that the entire expenses have been incurred by the appellant in cash. Thus, there is always possibility to inflate the expenditure on the basis of self-made vouchers/in absence of proper bills/vouchers. Further, without producing bills/vouchers of various expenses, the authenticity of the expenses cannot be ascertained. Under these circumstances, I find that the AO was justified to disallow out of the claim of the appellant. Upholding the addition of 20% sundry creditors above confirmations did not contain the PAN of the party and were undated. Even the Ledger account of these parties filed by the assessee only shows that the assessee had been making only cash payment to these parties against purchases of ₹ 20,000/- each on continuous dates. Hardly any payment has been made through cheques. Unexplained cash deposit in the Bank A/c under section 68 appellant has offered no creditable explanation about the amounts credited in his bank account, the entire receipts therefore cannot be treated as explained. In appeal, the additional evidence filed by the appellant has been examined, and perused, however, in the absence of application for admission of additional evidence, the same has not been admitted and taken cognizance of. The additions made by the Assessing Officer is therefore upheld. Since the assessee did not to appear before the Tribunal and since there is no other evidence before us to take a contrary view than the view taken by the Ld. CIT(A) in sustaining the various additions made by the A.O, we do not find any infirmity in his order. - Decided against assessee.

Summary

Issues:
Non-appearance of the assessee before the A.O., Validity of assessment, Disallowance of expenses, Addition of sundry creditors, Addition of cash deposit in bank account

Analysis:
The appeal was filed against the Order of the Ld. CIT(A)-17, New Delhi, for the A.Y. 2012-2013. The assessee did not appear before the A.O. despite multiple notices, leading to various additions to the total income. The A.O. disallowed expenses and made additions on an estimate basis due to lack of justification. The Ld. CIT(A) upheld these additions, stating that without proper evidence, authenticity cannot be ascertained. The disallowance of 20% of expenses and addition of sundry creditors were justified based on lack of supporting documentation. The Ld. CIT(A) also confirmed the addition of unexplained cash deposits in the bank account under section 68 of the I.T. Act, 1961, as the assessee failed to provide satisfactory explanations or evidence regarding the source of the deposits. The Ld. CIT(A) noted that the burden was on the assessee to rebut the evidence, which was not done effectively. The Tribunal upheld the Ld. CIT(A)'s decision, as the assessee did not present any contrary evidence or arguments. Consequently, the appeal was dismissed, and the order of the Ld. CIT(A) was upheld.

In conclusion, the Tribunal affirmed the decision of the Ld. CIT(A) regarding the various additions made by the A.O. due to the non-appearance of the assessee and lack of supporting evidence. The Tribunal found no infirmity in the Ld. CIT(A)'s order and dismissed the appeal of the assessee.