2022 (2) TMI 168 - AT - Income Tax

Disallowance on account of Bank Guarantee written off - as per revenue assessee could not prove its claim with the supporting evidences - HELD THAT - As the appellant did not submit any documentary proof regarding the amount written off. Being a private limited enterprise, it is difficult to assume that an amount being a bank guarantee was not traceable by the appellant nor does has it have any documentary proof regarding the same. The appellant claims that it does not have any clue regarding the amount being capital or revenue in nature nor has any evidences regarding whether the amount was actually a part of the income in the earlier years. Thus, as the onus was on the appellant to prove the genuineness of the claim, the ground of appeal is dismissed as nothing was placed on record to prove that the amount regarding Bank Guarantee written off was actually part of the income in the current or earlier year(s) - Decided against assessee. Disallowance on account of depreciation - assessee could not prove the higher depreciation with material evidences even the facts as per audit report claimed depreciation - HELD THAT - The assessee has not given any supporting evidences to substantiate its contention that the disallowance of depreciation was uncalled for when the closing WDV of Assessment Year 2012-13 has been taken as closing WDV of Assessment Year 2011-12. All other additions and adjustments for purchase and sales have been accepted, depreciation has been claimed as the figure had been wrongly taken from the computation of taxable income given erroneously as against the correct computation which was subsequently submitted and reason for difference in computation and return for income was taken for wrong depreciation. As find that the auditor has computed depreciation in the audit report. The assessee has not furnished any certificate from the Auditor as there was any error or mistake in his audit report. Therefore, in the absence of such certificate by the Tax Auditor, we do not see any reason to interfere in the findings of the authorities below, the same is hereby affirmed. - Decided against assessee.

Summary

Issues:
1. Disallowance of ?6,60,000 on account of Bank Guarantee written off.
2. Disallowance of ?1,03,664 on account of Depreciation.

Issue 1: Disallowance of ?6,60,000 on account of Bank Guarantee written off:

The assessee claimed ?6,60,000 as expenses under "DBD for Bank Guarantee Written off," stating the amount was untraceable and unrecoverable. The Assessing Officer (AO) disallowed this claim as the assessee failed to prove the genuineness of the amount written off. The CIT(A) upheld the disallowance as the appellant provided no evidence to substantiate the claim. The Tribunal affirmed the CIT(A)'s decision, noting the lack of proof from the assessee to establish the amount's nature or its inclusion in previous income. The onus was on the appellant to prove the claim's genuineness, which was not fulfilled, resulting in the dismissal of the appeal.

Issue 2: Disallowance of ?1,03,664 on account of Depreciation:

The AO disallowed ?1,03,664 from the depreciation claimed by the appellant, as discrepancies were found in the depreciation charts submitted. The appellant failed to explain the anomalies pointed out by the AO, leading to the depreciation being restricted to ?9,10,491, as per the Tax Audit Report. The CIT(A) upheld this decision, as the appellant could not provide any supporting evidence to justify the disallowance. The Tribunal affirmed the CIT(A)'s ruling, emphasizing the lack of a certificate from the Tax Auditor to validate any error in the audit report. Without such certification, the authorities' findings were upheld, resulting in the dismissal of the appeal.

In conclusion, the Tribunal dismissed the appeal of the assessee concerning the disallowance of ?6,60,000 on account of Bank Guarantee written off and the disallowance of ?1,03,664 on account of Depreciation. The decisions were based on the lack of substantiating evidence and failure to meet the burden of proof required to support the claims made by the appellant.