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TMI Blog2014 (7) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... son of lack of proper address, etc.), the initial onus having not been discharged in its respect, expenditure to that extent, i.e., 26,54,460/-, stands to be disallowed. Expenditure with reference to any particular payee (sub-broker) - HELD THAT:- We are in agreement with the ld. DR that the Revenue has in fact acted liberally, allowing the claim for expenditure where as much as a valid confirmation as to the receipt of payment stands filed. We may further add that the figures stated by us in this order have been adopted as furnished by the assessee before us, upon being sourced from the A.O. under RTI Act. The same, therefore, would be subject to confirmation by the A.O. while giving appeal effect to this order. Further, there being admittedly a difference of 59,103/-, the assessee shall either explain or reconcile the said difference by locating the source of error. In case, however, the same cannot be and neither is the same found by the A.O.; the total expenditure claimed being at a amount lower (by that amount) for which the detail stands submitted, the benefit of doubt would go to the assessee, so that the expenditure to be allowed with reference to any particular payee (sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.2009/PB pgs.79-85). 2.2 In the set aside proceedings, the assessee furnished the names and addresses of the 34 persons to whom sub-brokerage for the impugned amount of ₹ 63.53 lacs was paid. Notices u/s. 133(6) were issued by the A.O. to confirm the receipt of the brokerage by them. Most of the notices were either received back un-served or the persons receiving them did not reply. One entity by the name, Merchant Navy Officer Welfare Fund, responded by denying having received any brokerage. Accordingly, the A.O. allowed the assessee's claim in respect of six parties from whom (photo copies of) latest confirmations were filed (for ₹ 9,85,582/-) and qua two parties who responded positively to the notices u/s.133(6), claiming to have received the brokerage (₹ 2,00,714/-), i.e., for a total of ₹ 11,86,266/-, disallowing the balance ₹ 51,67,026/-. The same stood confirmed in appeal in-as-much as the assessee was unable to improve its case thereat in any manner; even the genuineness of the transactions being in the view of the ld. CIT(A) not beyond doubt. Aggrieved, the assessee is in second appeal. 3. We have heard the parties, and perused the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show, as well as the arguments advanced before us, the assessee's case is that it cannot be put to a disadvantage on account of some parties, to whom verification notices u/s. 133(6) stood issued, not responding or responding by stating that they are in the absence of the old records not in a position to confirm the transaction. Payments to them, after all, stand made through the banking channel. Again, the A.O. had the power to enforce attendance and, therefore, the plea of the parties having not responded could not hold. The Revenue's case, on the other hand, is that the assessee itself is responsible for the delay in the verification and, as such, it cannot take advantage of its own wrong. Two, the burden of proof for the claim u/s. 37(1) has, in the facts and circumstances of the case, not been met. Rather, as the ld. Departmental Representative (DR) would submit, the A.O. in allowing the assessee its claim in respect of the expenditure for which confirmations (as to payment) stood furnished has only acted liberally in the matter. Toward this, reliance stands placed by him on the decisions in the case of ITO vs. Maddi Laxmaiah & Co. (P.) Ltd. [1988] 31 TTJ 71 (Hyd) and G.R. Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, be said to be or considered as in discharge of the burden of proof on the assessee. This becomes relevant where, for instance, the A.O. subjects the material furnished by the assessee to verification. He may, seeking to verify a claim of expenditure, for example - speaking in context of the present case, issue notice u/s.133(6) to the payee, confirmation from whom has been furnished by the assessee. A response from the noticee may be either corroborative (i.e., in agreement) or not so. While the former would ordinarily resolve the matter, unless of course the assessing authority wishes to further investigate the same, a non-corroborative response would operate to shift the onus back on the assessee, of-course by and upon being confronted with the noticee's response and the information furnished by him u/s. 133(6). Then, again, is the scenario of non-response, which could be due to a variety of underlying causes. The notice itself may have not been served, or even if served, the noticee states of his inability to furnish the required information in view of the matter being old; the records being not available/ destroyed, etc., or may even simply choose not to respond. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so does not bear the PAN/GIR (or even the ward or circle where assessed) of the said broker, or his name or address, i.e., below his signature, as required per the confirmation letter itself. Even his address, therefore, cannot be said to be confirmed, and which may be responsible for the non-service. The confirmation is also not accompanied by a ledger account, i.e., of the assessee or of the income account, as appearing in the payee's books of account. Neither, therefore, is the confirmation complete nor under the circumstances subject to verification. The disallowance of the expenditure claimed is, therefore, apposite; the assessee having not been able to improve its case, i.e., as before the A.O., in any manner thereafter. We decide accordingly. 3.6.4 Finally, we come to the tranche (for ₹ 21.52 lacs). The notices stand responded to by the noticees, though by way of a disclaimer, stating that in view of the records being old, they are not in a position to confirm the receipt of payment ascribed to them as subbrokerage by the assessee. We find this as anomalous. On what basis, then, one may ask, they had issued the confirmations in the first place? This would be particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h. Thirdly, and equally importantly, it is the assessee itself which is responsible for its state of affairs. Even the primary details of the payees, i.e., the names and addresses, were not furnished to the assessing authority despite abundant opportunity granted for the same in the first round. The relief allowed by the first appellate authority in the first round being not on the basis of any specific factual finding/s by him, but solely on the basis of the addresses having been furnished, so that there was no verification, and the disallowance restricted by him to the amount for which the same could not be furnished even before him, led the Revenue to challenge his order before the tribunal, even as the same stood accepted by the assessee. Finally, as we observe, the set aside proceedings have found one of the payees to have denied having received the payment, and which has not been disputed by the assessee nor any explanation furnished in its respect, as indeed for the amount for which the particulars could not be furnished before the first appellate authority in the first round (₹ 10.52 lacs). This, despite the claim of the payments being made to the brokers under a stan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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