2023 (7) TMI 792 - AT - Income Tax

Addition u/s 68 - assessee had taken loan from 4 persons, which remained unexplained and cannot be treated as genuine - HELD THAT - As assessee has not been able to furnish any plausible explanation to establish the creditworthiness and the genuineness of the parties. Accordingly, CIT(Appeals) has not erred in facts and in law in confirming the aforesaid addition in the hands of the assessee. TDS u/s 194A - assessee had made interest payment to 11 parties without deducting tax at source - CIT(Appeals) dismissed the appeal of the assessee on the ground that during the course of assessment, the assessing officer had found certain discrepancies in the information furnished by the assessee, which still remained uncontroverted during the course of appellate proceedings as well - HELD THAT - We observe that the assessee had made interest payment to several parties without deduction of tax at source. Before Ld. CIT(Appeals), the assessee made no specific arguments to controvert the findings made by the assessing officer and gave no specifics explanation for non-deduction of tax at source. Accordingly, we are of the considered view that CIT(Appeals) has not erred in facts and in law in confirming the disallowance made by the assessing officer on account of non-deduction of tax on interest payments by the assessee. Addition u/s 24 - income from house property - HELD THAT - CIT(Appeals) observed that on verification of facts it emerged that Tata Projects Ltd had made payment of Rs. 6 lakhs to the assessee after deducting tax at source under section 194J of the Act, as professional/ technical fee. Accordingly, the income against which deduction under section 24 of the Act was claimed by the assessee is not income from house property . Accordingly, the AO had correctly disallowed the claim of deduction u/s 24. Addition on account of donation expenses - AO disallowed a sum claimed as deduction by the assessee u/s 80G - CIT(A) restricted disallowance - HELD THAT - CIT(Appeals) has taken into consideration the material placed on record by the assessee during the course of appellate proceedings, and has appropriately given relief to the assessee on the basis of documents furnished. Accordingly, we find no infirmity in the order of Ld. CIT(Appeals) so as to call for any interference. Addition on account of interest expenses - assessee has not produced any evidence in support of its contention to controvert the findings made by the AO - HELD THAT - As appellant though was given opportunity to produce evidences in respect of the claim of interest income, it failed to produce any evidences before the AO. No claim can be allowed without producing documentary evidences. Since appellant has not produced any evidences in spite of giving opportunities, the claim cannot be allowed and the disallowance is hereby confirmed. Decided against assessee. Disallowance of job work charges - HELD THAT - CIT(Appeals) has not erred in facts and in law in confirming the aforesaid disallowance in absence of any explanation/documentary evidence having been submitted by the assessee during the course of assessment proceedings or in appellate proceedings before Ld. CIT(Appeals). Disallowance u/s 40A(3) - payments on account of job work expenses in cash - HELD THAT - Even during the appellate proceedings, appellant has not attended the proceedings before the undersigned to submit the reasons or circumstances for making such a huge payment in cash. In such circumstances, the disallowance and addition made by the AO u/s 40A(3) of the Act is hereby held justified - Decided against assessee. Disallowance for donation expenses - HELD THAT - CIT(Appeals) has not erred in facts and in law in confirming the above addition in absence of any documentary evidences having been furnished by the assessee either during the course of assessment order during the course of appellate proceedings before Ld. CIT(Appeals) with respect to the aforesaid donation. Disallowance of telephone expenses, travelling expenses, vehicle expenses, petrol and diesel expenses and depreciation expenses etc. on account of personal use - HELD THAT - As disallowance made by the assessing officer to the extent of 10% of those expenses, in absence of any documentary evidence having been placed on record by the assessee either during the course of assessment proceedings or appellate proceedings.

Issues Involved:
1. Condonation of Delay
2. Addition under Section 68 of the Income Tax Act, 1961
3. Disallowance under Section 40(a)(ia) of the Income Tax Act, 1961
4. Addition under Section 24 of the Income Tax Act, 1961
5. Disallowance of Donation Expenses
6. Addition on Account of Interest Expenses
7. Disallowance of Job Work Charges/Expenses
8. Disallowance under Section 40A(3) of the Income Tax Act, 1961
9. Disallowance of Various Expenses (Telephone, Travelling, Vehicle, Petrol & Diesel, Depreciation)

Condonation of Delay:
The appeals for assessment years 2010-11 and 2011-12 were time-barred by 427 days and 243 days respectively. The delay was condoned due to the medical conditions of the working partners of the assessee firm.

Addition under Section 68:
The assessee failed to prove the creditworthiness and genuineness of loans amounting to Rs. 37,50,000/- from four parties. The CIT(A) confirmed the addition, noting inconsistencies and lack of supporting evidence regarding the financial capacity of the loan providers.

Disallowance under Section 40(a)(ia):
For the assessment year 2010-11, the AO disallowed Rs. 2,21,745/- for non-deduction of TDS on interest payments. The CIT(A) upheld this disallowance due to the assessee's failure to provide a satisfactory explanation or rebut the AO's findings.

Addition under Section 24:
The AO disallowed a deduction of Rs. 1,80,000/- claimed under Section 24, as the income from Tata Projects Ltd. was categorized as professional/technical fees, not as rental income. The CIT(A) confirmed this disallowance based on documentary evidence.

Disallowance of Donation Expenses:
The AO disallowed Rs. 7,400/- under Section 80G, which was partially allowed by the CIT(A) to Rs. 1,250/- based on documentary evidence provided by the assessee.

Addition on Account of Interest Expenses:
The AO added Rs. 1,87,418/- as interest income not offered to tax. The CIT(A) confirmed this addition due to the assessee's failure to provide supporting evidence.

Disallowance of Job Work Charges/Expenses:
For the assessment year 2011-12, the AO disallowed Rs. 5,23,165/- paid to M/s. Amba Oil Industries for non-deduction of TDS. The CIT(A) upheld this disallowance due to lack of details or explanation from the assessee.

Disallowance under Section 40A(3):
The AO disallowed Rs. 6,35,960/- for payments made in cash exceeding Rs. 20,000/-. The CIT(A) confirmed this disallowance as the assessee provided no explanation for the cash payments.

Disallowance of Various Expenses:
The AO disallowed 10% of expenses on telephone, travelling, vehicle, petrol & diesel, and depreciation due to lack of evidence for exclusive business use. The CIT(A) upheld these disallowances, referencing judicial precedents supporting such actions in the absence of adequate documentation.

Conclusion:
The appeals for both assessment years 2010-11 and 2011-12 were dismissed, with the Tribunal upholding the CIT(A)'s decisions on all grounds of appeal. The order was pronounced in the open court on 05-07-2023.

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