2005 (1) TMI 340 - AT - Income Tax

Summary

Issues:
- Disallowance of Rs. 18,000 claimed as expenditure on professional tour.
- Deletion of addition of Rs. 1,15,000 for suppressed professional receipts.
- Deletion of addition of Rs. 20,004 for cash inflow and outflow difference.
- Deletion of salary of Rs. 19,244.
- Addition of Rs. 1,37,000 under section 68 of the Act.
- Suppressed professional receipts for various assessment years.
- Household expenses.
- Addition of Rs. 35,599 under section 68 of the Act.
- Disallowance of claim of Rs. 13,392 on account of salary expenses.
- Deletion of addition of Rs. 1,42,900 for suppressed professional receipts.
- Disallowance of claim of Rs. 25,763 on account of salary.
- Addition of Rs. 26,000 under section 68 of the Act.

Analysis:

1. Disallowance of Rs. 18,000 for Professional Tour:
The AO disallowed the claimed expenditure as no evidence was produced. However, the assessee provided evidence including letters, certificates, vouchers, and circulars to support the expenditure. The ITAT found the expenditure directly related to the profession of the assessee and allowed the claim based on CBDT clarification. The claim was accepted, and the appeal of the assessee was allowed.

2. Deletion of Addition for Suppressed Professional Receipts:
The Tribunal referred to previous orders favoring the assessee regarding suppressed professional receipts. Following the precedent, the Tribunal dismissed the grounds raised by the Department for adding suppressed professional receipts. The appeal of the Department was dismissed in this regard.

3. Deletion of Addition for Cash Inflow and Outflow Difference:
The AO added Rs. 20,004 for alleged cash flow shortage, which the assessee disputed. The Tribunal found discrepancies in the AO's calculations and considered additional cash receipts and expenses, ultimately concluding that no addition was necessary. The Tribunal dismissed the Department's appeal on this ground.

4. Deletion of Salary of Rs. 19,244:
The issue of deletion of salary was covered by a Tribunal order, and both parties agreed on the matter. The Tribunal confirmed the allowance of the salary, following the previous order. The ground of appeal related to salary was dismissed.

5. Addition under Section 68 of the Act:
The assessee received deposits from individuals, and the AO added Rs. 1,37,000 under section 68. However, the Tribunal found that the assessee had provided sufficient evidence and discharged the burden of proof. The Tribunal upheld the CIT(A)'s decision to delete the addition under section 68.

6. Household Expenses and Other Additions:
Various issues related to household expenses, additions under section 68, and disallowances of salary claims were covered by previous Tribunal orders. The Tribunal dismissed the Department's appeals on these grounds, citing the favorable decisions in previous cases.

7. Overall Decision:
The Tribunal dismissed the appeals of the Department for various assessment years, including the deletion of suppressed professional receipts, salary disallowances, and additions under section 68. The Tribunal accepted the appeals of the assessee, allowing claims related to professional tour expenses, salary, and suppressed receipts.