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TMI Blog2012 (10) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal for the first time. Considering the facts of the case and the fact that no details were filed before the authorities below to consider the claim of the assessee for depreciation, thus additional ground for claiming depreciation is not maintainable as claim of the assessee for depreciation depends on the factual details which the assessee failed to furnish not only in the return filed but also during the course of assessment proceedings - against assessee. Addition on account of cash in hand - AY 2003-04 - Held that:- Considering the fact that the said amount is appearing in the balance sheet which is duly audited, no justification to treat the said amount as undisclosed income of the assessee. Hence, the addition of Rs.5,09,555 is deleted by reversing the orders of authorities below - in favour of assessee. Disallowance of 50% of administrative expenses - Held that:- The claim can be disallowed if the assessee has not established that amount in question has been wholly and exclusively laid out for the purpose of business. Since in the present case assessee has not been able to furnish the requisite proof to establish that the expenses aggregating to Rs.13,28,150 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to allow depreciation on the assets of the company. Being aggrieved, assessee filed appeal before ld CIT(A). 7. Ld CIT(A) called for a Remand Report from the Assessing Officer as the assessee contended that as per tax audit report, assessee had been trading only during the year. The AO submitted his Remand Report vide letter dated 23.4.2009, copy placed at pages 26 to 30 of PB. The AO in the Remand Report (para 7) stated that assessee filed a list of assets during the remand proceedings under the head plant and machinery on which depreciation is claimed, but no documentary evidence is produced. The AO in the Remand Report has further stated that assessee filed a letter dated 25.2.2008 stating; inter alia, that during the year, manufacturing activity was stopped due to loss, however the other trading and business activity was on wherein, major part of the machinery were used for conversion, mixing and storage purposes. In lieu of the use, the depreciation has been claimed during the financial year relevant to assessment year 2000-2001. The AO stated that assessee has failed to furnish/produce the documentary evidence called for to prove that the machinery was put to use durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant assessment year, assessee debited an amount of Rs.8,52,435 as administrative expenses. The AO stated that the assessee company was closed down during the year 1999 but still debited an amount of Rs.8,52,435 as administrative expenses for which no proof or evidences were produced. Therefore, the AO disallowed 50% of the claim of the assessee which comes to Rs.4,76,220 and added to the taxable income of the assessee. Being aggrieved, assessee filed appeal before ld CIT(A). 13. Ld CIT(A) asked the AO to submit remand report. Ld CIT(A) stated that the AO in his remand report, reiterated that assessee could not able to produce evidence of Rs.1,05,694 as under: a) Conveyance Rs.24,436 b) Professional-others Rs. 1,580 c) Motor car-others Rs.45,753 d) Travelling exp. Rs.10,220 e) Sundry expenses Rs. 3,737 f) Office repairs-others Rs.19,968 Rs.1,05,694 In view of above, ld CIT(A) confirmed the disallowance of Rs.1,05,694 as the assessee could not produce supporting evidences. Hence, assessee is in appeal before the Tribunal. 14. During the course of hearing, ld A,.R. could not controvert the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ives of parties and also considering para 8 of the remand report placed at pages 32 to 36 of PB r.w. 45 to 51 of PB, we restore the issue to the file of ld CIT(A) to decide the claim of the assessee in respect of Rs.1,60,000 on merits by a speaking order. However, in respect of balance amount of Rs.50,000, no submissions were made by ld A.R. We also observe that the assessee failed to produce any documents at the time of remand proceedings and, accordingly, the AO could not verify the claim of the assessee. Hence, the claim of Rs.50,000 made by the assessee is rejected. Accordingly, Ground No.1(i) is allowed in part for statistical purposes by restoring it to ld CIT(A) to decide afresh after giving opportunity of being heard to both parties. 21. In respect of Ground No.1(ii)and (iii), ld A.R. submitted that same are not pressed for. Accordingly, Ground No.1(ii) and (iii) of the revised grounds of appeal taken by the assessee are dismissed as not pressed. 22. The assessee has also taken an additional ground which reads as under: On the facts and in the circumstances of the case, ld CIT(A) erred in not appreciating Explanation 5 to Sub-section 1 of Section 32 of the Income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of authorities below. Ld A.R. also conceded that assessee did not make any claim for depreciation before the AO and no details were filed before him. However, ld A.R. submitted that the list of plant and machineries were filed during the course of remand proceedings before the AO. He submitted that a direction could be given to the AO to allow the claim of depreciation to the assessee as applicable to it. However, ld D.R. submitted that the said additional ground should not be admitted as it is not arising out of orders of authorities below nor assessee made any claim before the authorities below for claim of depreciation. The assessee also did not file any details to claim depreciation before the authorities below. He submitted that additional ground should be rejected. 30. Considering the facts of the case, as mentioned hereinabove, we agree that the claim of depreciation of the assessee by way of additional ground before us is not maintainable as no details were filed by the assessee before authorities below. Moreover, to adjudicate this ground, a proper verification of facts are required to be considered. The relevant facts were not admittedly made available by the assessee d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.4600/M/2011. 32. In Ground No.1 of appeal, assessee has disputed the order of ld CIT(A) in confirming the addition of Rs.5,09,955 on account of cash in hand. 33. The AO has stated that as per return of income in the balance sheet schedule-8 under the head cash and bank balance , cash balance is shown at Rs.5,09,555. The AO has stated that in the absence of any proof/details, the said amount is added to the income of the assessee. In the first appeal, ld CIT(A) confirmed the action of AO by observing that assessee failed to furnish any details or produce books of account. Hence, assessee is in appeal before the Tribunal. 34. At the time of hearing, ld A.R. referred page 21 of PB which is schedule to audited balance sheet and stated that in the head cash and bank balance , the assessee has shown cash balance on hand at Rs.5,09,555.72 as on 31.3.2003. He submitted that the said entry is appearing in the books of account which was duly audited. Ld D.R.could not dispute the above facts. 35. Considering the fact that the said amount of Rs.5,09,555.72 is appearing in the balance sheet which is duly audited, we do not find any justification to treat the said amount as undisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 of PB to which our attention was drawn by ld A.R. Ld A.R. has not disputed the fact as stated by ld CIT(A) that assessee produced copy of bills only for Rs.1,28,945. Further, expense of Rs.11,99,205 was incurred in cash which was supported by internal vouchers and for the balance amount of Rs.13,28,150, assessee failed to produce any particulars or books of account. The Hon ble AP High Court in the case of Commissioner of Income-tax v. Transport Corporation of India Ltd., 256 ITR 701 (AP) held that unsupported payment is not deductible. Further, Hon ble Apex Court has held in the case of CIT vs. Calcutta Agency CO., 19 ITR 191 (SC) that if assessee fails to establish the fact necessary to support his claim for deduction u/s.37(1), the claim is not admissible. Hon ble Madras High Court has held in the case of Ratnaswami (K.S.) v. Additional Income-tax Officer, 42 ITR 568 (Mad) that the claim can be disallowed if the assessee has not established that amount in question has been wholly and exclusively laid out for the purpose of business. Since in the case before us, assessee has not been able to furnish the requisite proof to establish that the expenses aggregating to Rs.13,28,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged payment of commission to M/s. Gurudev Chemox Industries, Bangare. Ld A.R. could not reply anything to establish as to whether any TDS was deducted on the payment of alleged commission. On the other hand, ld D.R. supported the orders of authorities below and submitted that even during the remand proceedings, assessee has not placed any evidence on record to justify the alleged claim of payment of commission. 45. We have considered the orders of authorities below and submissions of ld representatives of parties. Considering the fact that assessee has not been able to establish whether any service was received to the assessee for the alleged payment of commission of Rs.20,02,250 to M/s. Gurudev Chemox Industries, Bangalore. Merely filing of said certificate at page 130 of PB does not establish that any service was received to the assessee on account of which the said commission payment was alleged paid to the assessee to M/s. Gurudev Chemox Industries, Bangalore. In the absence of any documents on record, we do not find any reason to interfere with the order of ld CIT(A). Hence, ground No.3 is rejected. 46. In Ground No.4, assessee has disputed the order of ld CIT(A) in conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n not to accept the claim for the assessment year under consideration. 50. Ld D.R. supported the order of ld CIT(A) and submitted that in the absence of any document of the said cash deposit aggregating to Rs.19 lakhs, in the bank of the assessee out of sale of returned goods, ld CIT(A) is justified to confirm the action of AO. He submitted that even in the remand proceedings, assessee could not produce any evidence to substantiate his submission. 51. We have considered the orders of authorities below and submissions of ld representatives of parties. It is a fact that assessee has not been able to produce any evidence regarding the sale of returned goods from the above named three parties. Ld A.R. conceded to ld CIT(A) that no data was also kept for sale of the said goods. Therefore, the contention of la A.R. is not supported by any document and in the absence of which, we do not find any reason to interfere with the order of ld CIT(A). Accordingly, we uphold the order of ld CIT(A) by rejecting ground No.4 taken by the assessee. 52. Now we take up appeal for assessment year 2004-05 being I.T.A No.4601/M/2011. 53. In ground No.1 of appeal, the assessee has disputed the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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