2022 (9) TMI 79 - AT - Income Tax

Addition of unexplained cash introduced as capital - HELD THAT - Assessee had not complied in response to notice issued by the AO no documentary evidences regarding genuineness of such introduction of capital before AO - AO had no other option but Rs. 5, 00, 000/- introduced capital was treated as unexplained capital investment u/s 69 of the Act and added back to her total income. Subsequently at the time of hearing before the CIT(A) also the assessee contended that a sum of Rs. 8, 00, 000/- was withdrawn from assessee s capital towards intended expenses on 15.04.2011 and part of such withdrawal amounting to Rs. 5, 00, 000/- was re-deposited to the capital account. Assessee s submission was not admitted by CIT(A) as because it would be shortfall of Rs. 3, 00, 000/- in assessee s capital account even after crediting the net profit for the assessment year in question and the CIT(A) sustained the addition made by the ld. AO even before us appellant also did not appear and cannot proved any contrary findings of the lower authorities below and accordingly we do not find any infirmity in the impugned order therefore we uphold the same. Accordingly this issue raised by the assessee is dismissed. Addition on account of tanker - HELD THAT - The value of asset was found missing subsequently the details in this regard was called for from the assessee. But the assessee never complied to such notices nor file any details during entire assessment proceeding and ultimately the AO had no other option but to estimated at Rs. 1, 50, 000/- value of tanker for relevant assessment year and added back to the total income of the assessee. Before the CIT(A) also the assessee did not produce any supported documents to prove the fact contrary and the CIT(a) upheld the order passed by the AO. Even before this Tribunal also the assessee did not appear and submit any additional evidence or document to prove the fact that the addition was not sustainable - We do not find any infirmity in the findings of ld. CIT(A) and accordingly confirmed the findings made by CIT(A). Accordingly this issue raised by the assessee is also dismissed. Addition of VAT liability - HELD THAT - AO on perusal of audited account it was noticed by the AO that VAT was shown as payable. However the AO was asked the assessee to submit the copy of challan to support the actual payment of VAT was discharged and accordingly the AO had added back the amount to the total income of the assessee and the assessee while raising this issue before the CIT(A) and the assessee completely failed to show that payment of VAT was discharged and the ld. CIT(A) accordingly confirmed the action taken by the AO in respect of addition made by the AO. While we going through the findings of both the lower authority perusing the orders passed by the authorities below. We do not find any contrary view in respect of the order passed by the authorities below and while deciding this issue and we confirmed the view taken by the ld. CIT(A) in respect of deciding this issue and accordingly this issue raised by the assessee is dismissed. Accordingly this issue raised by the assessee is dismissed. Addition on account of security deposit - HELD THAT - AO found that the investment made made as security with LOC never appeared in balance sheet of assessee further the assessee did not comply and filed any submission to prove the fact contrary to the findings of AO accordingly the AO treated the deposit as unexplained income of the assessee u/s 69 of the Act and added to the income of the assessee and even before the CIT(A) the assessee did not able to show any submission and documents to prove the fact that the AO was taken contrary view ultimately the ld. CIT(A) affirmed the addition made by the ld. AO. We after going through the findings of the authorities below and material available on record we do not find any infirmity in the order passed by the ld. CIT(A) while deciding this issue therefore we confirmed the view taken by the ld. CIT(A). Accordingly this issue raised by the assessee is dismissed. Unexplained purchase - HELD THAT - AO while doing the assessment he called for details from the IOC who had sold goods to assessee whereas the assessee had shown purchases from IOC and therefore it was believed by the AO that the difference amount of purchase was unexplained purchase in the hands of assessee and was added as extra profit earned by the assessee and before the ld. CIT(A) assessee could not demonstrated any verifiable evidence the ld. CIT(A) confirmed the action of AO. At the time of hearing before this Tribunal assessee did not appear and submit any evidence or documents to prove the fact contrary therefore we do not find any infirmity in the action of ld. CIT(A) while confirming the addition made by the AO. Accordingly this issue raised by the assessee is dismissed. Disallowance being 30% of expenses claim under the head fuel and repairs addition on account of bonus and addition on account of sales promotion travelling conveyance under the head staff welfare Misc. and general expenses and addition on account of office expenses and printing and stationery are without any basis made by the lower authorities - HELD THAT - AO had found that assessee had incurred expenditure under various heads however no proper bills and vouchers for having incurred such expenses assessee could not produce before the AO and even before the ld. CIT(A) assessee could not able to produce any supported bills vouchers for such expenses and the ld. CIT(A) confirmed the order passed by the AO in this regard to the above issues. We after perusing the record and going through the material available on record and examining the order passed by the authorities below. We also do not find any infirmity in the impugned orders passed by the ld. CIT(A) while deciding the issues raised by the assessee. Accordingly the issues raised by the assessee are dismissed.

Summary

Issues Involved:

1. Condonation of delay in filing the appeal.
2. Addition of Rs. 5,00,000 on account of unexplained capital.
3. Addition of Rs. 1,50,000 on account of tanker.
4. Addition of Rs. 52,685 on account of VAT payable.
5. Addition of Rs. 2,00,000 on account of security deposit.
6. Addition of Rs. 2,50,343 on account of unexplained purchases.
7. Disallowance of Rs. 3,34,947 (30%) of expenses claimed under fuel and repairs.
8. Disallowance of Rs. 1,09,600 out of expenses claimed under bonus.
9. Disallowance of Rs. 4,36,215 out of expenses claimed under sales promotion.
10. Disallowance of Rs. 2,28,622 under travelling and conveyance.
11. Disallowance of Rs. 1,48,884 under staff welfare.
12. Disallowance of Rs. 1,09,017 being 20% of expenses claimed under Misc. & General expenses.
13. Disallowance of Rs. 1,04,442 being 15% of expenses claimed under office expenses and printing & stationery.

Issue-Wise Detailed Analysis:

1. Condonation of Delay:
The Tribunal condoned the delay of 11 days in filing the appeal by the assessee, finding reasonable cause for the delay.

2. Addition of Rs. 5,00,000 on Account of Unexplained Capital:
The assessee failed to provide evidence for the capital introduction of Rs. 5,00,000. The AO treated it as unexplained investment under Section 69 of the Act. The CIT(A) upheld this, noting the lack of credible evidence. The Tribunal also upheld the addition, agreeing with the lower authorities' findings.

3. Addition of Rs. 1,50,000 on Account of Tanker:
The AO observed transportation income without corresponding asset value for a tanker in the balance sheet. The value was estimated at Rs. 1,50,000 and added back as unexplained investment. The CIT(A) upheld this, and the Tribunal found no infirmity in the lower authorities' decisions.

4. Addition of Rs. 52,685 on Account of VAT Payable:
The AO disallowed the VAT payable amount as it was not paid by the due date, invoking Section 43B. The CIT(A) confirmed this, and the Tribunal upheld the disallowance due to lack of evidence of payment.

5. Addition of Rs. 2,00,000 on Account of Security Deposit:
The AO added Rs. 2,00,000 as unexplained investment for a security deposit not reflected in the balance sheet. The CIT(A) upheld this, and the Tribunal found no contrary evidence to overturn the decision.

6. Addition of Rs. 2,50,343 on Account of Unexplained Purchases:
The AO noted a discrepancy between purchases reported by the assessee and sales reported by IOC, adding Rs. 2,50,343 as unexplained purchases and profit. The CIT(A) upheld this, and the Tribunal found no evidence to dispute the addition.

7. Disallowance of Rs. 3,34,947 (30%) of Expenses Claimed Under Fuel and Repairs:
The AO disallowed 30% of expenses claimed under fuel and repairs due to lack of evidence. The CIT(A) upheld this, and the Tribunal agreed with the disallowance, noting the assessee's failure to provide supporting documents.

8. Disallowance of Rs. 1,09,600 Out of Expenses Claimed Under Bonus:
The AO disallowed Rs. 1,09,600 of bonus expenses, finding them excessive and unsupported. The CIT(A) confirmed this, and the Tribunal upheld the disallowance due to lack of evidence.

9. Disallowance of Rs. 4,36,215 Out of Expenses Claimed Under Sales Promotion:
The AO disallowed 50% of sales promotion expenses due to lack of evidence. The CIT(A) upheld this, and the Tribunal agreed with the disallowance, noting the absence of supporting documents.

10. Disallowance of Rs. 2,28,622 Under Travelling and Conveyance:
The AO disallowed 30% of travelling and conveyance expenses due to lack of evidence. The CIT(A) upheld this, and the Tribunal found no reason to overturn the disallowance.

11. Disallowance of Rs. 1,48,884 Under Staff Welfare:
The AO disallowed 30% of staff welfare expenses due to lack of evidence. The CIT(A) confirmed this, and the Tribunal upheld the disallowance, noting the absence of supporting documents.

12. Disallowance of Rs. 1,09,017 Being 20% of Expenses Claimed Under Misc. & General Expenses:
The AO disallowed 20% of miscellaneous and general expenses due to lack of evidence. The CIT(A) upheld this, and the Tribunal agreed with the disallowance.

13. Disallowance of Rs. 1,04,442 Being 15% of Expenses Claimed Under Office Expenses and Printing & Stationery:
The AO disallowed 15% of office expenses and printing & stationery due to lack of evidence. The CIT(A) confirmed this, and the Tribunal upheld the disallowance.

Conclusion:
The Tribunal dismissed the appeal, upholding all the additions and disallowances made by the AO and confirmed by the CIT(A), due to the assessee's failure to provide sufficient evidence and supporting documents.