2022 (12) TMI 392 - AT - Income Tax

Revision u/s 263 - additions made by the A.O. as commission received after allowing 50% expenses against the impugned commission - HELD THAT - We are of the considered opinion that the assessee even during the second round of litigation has failed to substantiate its claim for allowing 95% of the expenses alleged to be incurred in earning the commission income received by the assessee from MSEDCL. The assessee neither before us, nor before the lower authorities have filed any additional evidences pertaining to its claim. We are of the considered view that the assessee has been given sufficient relief by the lower authorities in allowing 50% of the expenses claimed by the assessee in earning the impugned commission received from MSEDCL. Assessee has failed to prove that the said expenses were incurred wholly and exclusively for the purpose of earning the commission income. Sale of loan application form - As observed that the assessee has failed to furnish relevant details pertaining to the expenses claimed by the assessee for the above mentioned heads. Even during the second round of litigation, the assessee has not submitted any additional evidences pertaining to the said claim either before us or before the lower authorities. Interest on deposit on security from MSEDCL - AR submitted that similar receipts were derived by the assessee society in A.Y. 2008-09 and no addition was made for the same by the A.O. thereon. In view of this, we deem it fit and appropriate, as a last and final opportunity, to remand this issue to the file of the A.O. Miscellaneous Receipt, Recovery Expenses AND Interest on loan to staff interest on employees housing loan - AR submitted that similar receipts were derived by the assessee society in A.Y. 2008-09 and no addition was made for the same by the A.O. thereon. In view of this, we deem it fit and appropriate, as a last and final opportunity, to remand this issue to the file of the ld. A.O.

Issues:
Challenging order of CIT(A) regarding addition made by AO under section 80P for AYs 2008-09, 2009-10, and 2010-11.

Analysis:
1. The appellant, a co-operative credit society, challenged the CIT(A)'s order confirming the addition made by the AO. The appeals were consolidated for the lead case of AY 2008-09.
2. Proceedings under section 263 were initiated due to income derived from MSEDCL, leading to an addition of Rs. 2,88,534 as 'income from other sources'.
3. The CIT(A) allowed 50% of the expenses against the commission from MSEDCL and directed to tax the balance under section 56 of the Act.
4. The Tribunal set aside the CIT(A)'s order and remanded the matter to the AO for fresh examination, emphasizing the need for relevant details.
5. The CIT(A) confirmed the addition, citing the appellant's failure to substantiate its claim even in the second appeal.
6. The appellant raised grounds related to reopening under section 147 and additions made by the AO as commission received from MSEDCL.
7. The expenses claimed were disallowed as not wholly and exclusively for earning exempt income, despite the appellant's contentions.
8. The Tribunal found the appellant failed to substantiate the claim for allowing 95% of expenses incurred in earning the commission income.
9. The appellant's reliance on case laws was deemed irrelevant to the present case, and the Tribunal upheld the lower authorities' decision.
10. Grounds raised by the appellant were dismissed, and the Tribunal upheld the CIT(A)'s decision on the expenses claimed.
11. The Tribunal dismissed identical grounds in other appeals for AYs 2009-10 and 2010-11 due to lack of substantiating evidence.
12. The Tribunal remanded the issue of expenses claimed under different heads for further examination by the AO for AYs 2009-10 and 2010-11.
13. The appeal for AY 2008-09 was dismissed, while appeals for AYs 2009-10 and 2010-11 were partly allowed for statistical purposes.

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