2019 (6) TMI 1039 - AT - Income Tax

Disallowance of labour charges - addition on account of sundry creditor Sri SN Gupta - HELD THAT - The fact remains the same that assessee did not produce any documentary evidences in respect of the claim of labour charges. No evidence adduced before assessing officer or the Learned CIT(A). Same is the position before the Tribunal. Therefore, in the absence of any supporting documents, the claim of assessee cannot be accepted. The burden is upon assessee to prove the claim of labour expenses because assessee claimed deduction. The onus upon assessee has not been discharged. Thus, the Orders of the authorities below were justified in disallowing the labour expenses. This Ground of appeal of assessee is dismissed. Addition u/s 68 - unexplained cash credit - HELD THAT - It is clear that assessee failed to prove identity of the creditor, his creditworthiness and genuineness of the transaction in the matter before the authorities below because the assessee did not produce any documentary evidences to prove all the three conditions of Section 68. Though the assessee filed affidavit, confirmation and bank statement of the creditor before the Tribunal, but, no steps have been taken by the assessee to make prayer for admission of the additional evidences. No reasons have been given as to why the same were not filed before the authorities below. Therefore, such documents which were not filed before the authorities below, could not be entertained at this stage. - Decided against assessee.

Summary

Issues: Disallowance of labor charges and addition of sundry creditor amount.

Disallowed Labor Charges Analysis:
The assessee claimed labor charges of ?2,17,500 but failed to provide detailed substantiating documents, only submitting a copy of the ledger account. The assessing officer disallowed ?1 lakh due to lack of evidence. The CIT(A) upheld the disallowance, emphasizing the onus on the party to provide evidence. The Tribunal affirmed the decision, stating the burden was on the assessee to prove the claim, which was not done, leading to the dismissal of the appeal.

Addition of Sundry Creditor Analysis:
The assessee received a credit of ?2 lakhs from a creditor, but failed to prove its genuineness despite attempts like issuing a notice under section 133(6). The CIT(A) confirmed the addition as the assessee could not substantiate the credit's authenticity with proper evidence. The Tribunal noted the lack of documentary evidence to prove the creditor's identity, creditworthiness, and genuineness, as required by Section 68 of the Income Tax Act. The Tribunal rejected the additional evidence submitted during the appeal, as it was not presented before the lower authorities, leading to the dismissal of the appeal.

In conclusion, the Tribunal upheld the disallowance of labor charges and the addition of the sundry creditor amount, as the assessee failed to provide sufficient evidence to substantiate both claims. The appeal was dismissed, emphasizing the importance of meeting the burden of proof in such cases.