2022 (10) TMI 493 - AT - Income Tax

Disallowance of depreciation on the Furniture Fixture - Disallowance made u/s 40A(3)(a) - Addition made on account of cash payments exceeding Rs.20,000/- - HELD THAT - When the appeal is filed before the Tribunal by the assessee himself against the orders of the lower authorities, it is expected that the assessee may put forth some documentary evidences in support of his contentions to decide the appeal as it is the duty of the assessee to lead evidence in support of its claim and for the adjudicating authority to decide upon the sustainability of the claim on the basis of the evidence led by the parties before it. However, the assessee did not appear before the Tribunal despite numerous adjournments allowed and notices issued through RPAD. No material has been placed by assessee to controvert the findings of lower authorities. In this view of the aforesaid facts and in absence of any contrary material brought on record to rebut the findings of lower authorities, we find no reason to interfere with the order of CIT(A) and thus we dismiss the grounds of the assessee.

Summary

Issues:
1. Disallowance of depreciation on Furniture and Fixture
2. Disallowance of cash payments exceeding Rs.20,000

Analysis:
The appeal was filed against the order passed by the Commissioner of Income Tax (Appeals) for Assessment Year 2013-14. The assessee, engaged in representation and marketing in Telecom Products and Services, electronically filed its return of income declaring Rs.68,15,819. The assessment was framed under section 143(3) of the Act, determining the total income at Rs.82,80,820. The CIT(A) dismissed the appeal, leading the assessee to file an appeal raising grounds against the disallowance of depreciation on Furniture and Fixture and cash payments exceeding Rs.20,000. Despite multiple hearing dates and notices issued, the assessee did not appear before the Tribunal, resulting in the appeal being disposed of on merits.

Regarding the disallowance of depreciation on Furniture and Fixture, the AO noted that the assessee claimed depreciation for a flat in Gurgaon without proving its business use. The AO disallowed depreciation of Rs.11,67,000 as the property's business use was not substantiated. Similarly, the AO disallowed cash payments exceeding Rs.20,000 under section 40A(3)(a) after finding insufficient justification from the assessee. The CIT(A) upheld these disallowances, leading to the current appeal.

During the Tribunal proceedings, the Learned DR supported the lower authorities' orders, emphasizing the lack of evidence provided by the assessee. The Tribunal noted that the assessee failed to present any documentary evidence or appear before the Tribunal to support its contentions. As it is the assessee's duty to provide evidence for its claims, the Tribunal found no reason to interfere with the CIT(A)'s order, ultimately dismissing the appeal due to the lack of contrary material to rebut the lower authorities' findings.

In conclusion, the Tribunal dismissed the appeal of the assessee due to the absence of evidence and the failure to appear before the Tribunal. The decision was based on the lack of substantiation for the claims made by the assessee, ultimately upholding the lower authorities' orders regarding the disallowances of depreciation on Furniture and Fixture and cash payments exceeding Rs.20,000.