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TMI Blog2022 (5) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has not verified from any of the party despite having the power under the statute under the provisions of section 131(1)/133(6). Assessee has not furnished the details of the TDS - On perusal of the paper book filed by the assessee, particularly pages 693 to 724, we note that the assessee has furnished details of TDS deducted and the copies of the TDS return acknowledgment. Assessee has not furnished the bills of the parties as well as the copies of the vouchers for payment - On perusal of the paper book, we also note that such details were not furnished by the assessee. However, in our considered view in the absence of such details, there cannot be any disallowance of the expenses. It is for the reason that the AO was provided the addresses of the parties to whom the payment was made, their ledger accounts showing the amount was paid through the banking channel after the deducting the TDS against such exp.nses. If the AO had any doubt on the genuineness of the expenses in the absence of the bills and vouchers, the AO was very much empowered to call for the details from the respective parties. But he has not done so. Moreover, there were other details which were availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO in these details. Accordingly we are of the view that there cannot be any disallowance of depreciation as alleged by the AO. DR at the time of hearing has not brought anything on record contrary to the finding of the learned CIT (A). In view of the above and after considering the facts in totality, we do not find any reason to interfere in the finding of the learned CIT (A). Accordingly we uphold the same. Hence the ground of appeal of the Revenue is dismissed. CIT (A) has admitted the additional evidences in contravention to the provisions of rule 46A of income tax rule - On perusal of the above provisions, we note that the learned CIT (A) has been empowered to admit the additional evidences. In the present case, the learned CIT (A) has exercised his power granted to him under section 250 of the Act and sub rule 4 of rule 46A of Income Tax Rule and therefore has admitted the additional evidences. Thus, we do not find any merit in the ground of appeal raised by the Revenue. Hence, we dismiss the same. Revenue appeal dismissed. - ITA No.1715/Ahd/2019 - - - Dated:- 10-11-2021 - SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER Revenue b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in the present case is a private limited company and engaged in the business of manufacturing, processing and trading of castor oil and other related products. The assessee for the year under consideration filed its return of income declaring loss of Rs. 6,17,50,097/- only. The assessee revised its return of income time to time and finally declared the loss of Rs. 5,86,29,312/- in the return revised dated 09th May 2010. 5. The AO during the assessment proceedings required the assessee to furnish the necessary details by issuing show cause notice time and again but the assessee failed to furnish the same. However, the assessee in response to the final show cause notice issued by the AO submitted certain details, vide letter 22nd December 2011 which was filed on 27-12-2011 at the fag end of the assessment. The details furnished by the assessee are given as under: 1. Reply of Para (b) of your letter Details of labour expenses for Rs.85,60,426/- alongwith name and address of Parties are enclosed marked Annexure-P 2. Copy of acknowledgement receipt of TDS returns (From No.26Q) for current Asst.Year 2008-09 are enclosed marked Annexure-Q. Labour charges o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses, loading unloading expenses, stores and spares and packing materials. 5.3 The AO found that the assessee has not filed complete details and associated evidences in support of genuineness of expenses to justify that these were incurred wholly and exclusively for the purpose of the business. As such, the assessee only submitted the list of names of persons to whom amount was paid against alleged expenses. But no detail was given that of how much amount was paid to the specific person. Likewise, no PAN or other detail was submitted of the person to whom amount was paid. Accordingly, the AO in the absence of adequate supporting documents held that the genuineness of the expenses have not been proven completely. Thus, the AO disallowed part expenses in the following manner: i. Labour charges Rs. 25,68,128/- being 30% of total amount claimed ii. Freight inward exp. Rs. 48,62,169/- being 25% of total amount claimed iii. Freight outward exp. Rs. 20,69,876/- being 25% of total amount claimed iv. Loading unloading exp. Rs. 8,77,735/- being 25% of total amount claimed v. Stores and spares exp. Rs. 25,67,185 being 25% of total amount claimed vi. Packing material e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rieved preferred an appeal to the learned CIT (A) and filed certain additional documents which were forwarded to the AO for the remand report. 6.1 The AO vide remand report dated 24th August 2018 submitted that the assessee deliberately has not submitted required document/ evidences till fag end of assessment proceeding despite issuing several notices. Thus the same were not verified due non availability of time. The AO further submitted that the additional document is nothing but same set of documents which were submitted during assessment proceeding which were furnished just before the expiry of the time for the assessment proceedings. However, on verification of the same during remand proceeding it was found that no supporting evidence was filed such as whether the payment was made in cash or through banking channel, bank book, cash book, vouchers, TDS details etc. Hence the same cannot be accepted. 6.2 The assessee in rejoinder submitted that all the payments were made through banking channel. The assessee also claimed that the ledger copies of the parties along their name, addresses and cheque detail were already submitted. Therefore, the finding of the AO to this extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the supporting evidence. However, the assessee in suo- moto has disallowed the same in the revised return of income for Rs. 4,48,168/- only. Therefore, further disallowance is not required. Depreciation: 7.5 The learned CIT(A) held that the majority of the bills with respect to the addition of assets were duly submitted by the assessee. Hence, the disallowance of depreciation is not justified and accordingly the ld. CIT-A directed the AO to delete the addition made by him. 8. Being aggrieved by the order of the learned CIT(A), the Revenue is in appeal before us. 8.1 The learned DR before us contended that the necessary supporting documents were not furnished by the assessee even during the remand proceedings. 8.2 On the contrary the learned AR before us filed paper book running from the pages 1 to 732 and submitted that all the details in support of the expenses were duly furnished before the authorities below. For this purpose, the learned AR drew our attention on the ledgers of Labour expenses, party wise ledger with the name and addresses, details of TDS which are placed on pages 45 to 109 and 706 to 710 of the paper book. 8.3 The learned AR also drew ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional submissions before the AO vide letter dated 29th of December 2010 which has not been referred by the AO in the remand report. Indeed, the assessment order was passed by the AO dated 29th December 2010. Hence, it was not possible for the AO to consider the details furnished by the assessee at the fag and of the assessment proceedings. 9.4 Be that as may be, all the above details filed by the assessee vide letter dated 22 December 2010 and 29th of December 2010 were also submitted before learned CIT (A) vide submission dated 19th June 2012 which were duly forwarded by the learned CIT (A) for the remand report. But the details filed by the assessee dated 29th December 2010 has not been referred by the AO in the remand report. 9.5 On perusal of the remand report of the AO dated 24th April 2018, we note that the AO has made the disallowance of the expenses for various reasons. One of the reason was that the details were not furnished by the assessee whether the expenses were paid through the banking channel or in cash. We disagree with the finding of the AO for the reason that the assessee has duly furnished the copies of the expenses ledgers and the ledger of all the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respective parties. But he has not done so. Moreover, there were other details which were available on record wherein no defect was pointed out by the AO. Thus, in our considered view there cannot be any disallowance of the expenses in the given facts and circumstances in ad hoc manner. 9.9 The next allegation ( No. 5 and 6) was that the assessee failed to furnish the copy of the bank book and the bank statement. In this regard we find that, the assessee was maintaining 7 bank accounts and has filed the copies of all the bank statement which are available on pages 251 to 438 of the paper book. Likewise, the assessee before learned CIT(A) in rejoinder to remand report claimed that it has furnished bank book during assessment proceeding vide letter dated 12th October 2010, but the same not controverted by DR. Thus to this extent, we disagree with the comments of the AO in the remand report. 9.10 With respect to the cash book, the learned AR before us contended that the copy of the cash book was never demanded by the AO during the assessment proceedings. Accordingly, the assessee has not furnished the same. This contention of the learned AR was not controverted by the learned DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the total income of the assessee. The assessee has filed the necessary details showing the amount of disallowance of the impugned expenses which is placed on pages 6 of the paper book. However, the question arises that the assessee in the subsequent year can claim the deduction of such expenses after complying the provisions of TDS whereas the disallowance has been made by the AO for the impugned expenses on account of 2 reasons namely prior period expenses and secondly non-availability of supporting evidence. As regards the prior period expenses, we note that the courts have taken the view that prior period expense cannot be disallowed as there is no effect on the tax liability of the assessee. In holding so we draw support and guidance from the judgment of Hon ble Bombay High Court in case of CIT vs. Nagri Mills Co. Ltd. reported in 33 ITR 681 where the Hon ble court held as under: We have often wondered why the Income-tax authorities, in a matter such as this where the deduction is obviously a permissible deduction under the Income-tax Act, raise disputes as to the year in which the deduction should be allowed. The question as to the year in which a deduction is allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted the additional evidences in contravention to the provisions of rule 46A of income tax rule. In this regard, we refer subsection 4 and 5 of section 250 of the Act which reads as under: (4) The Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals). (5) The Commissioner (Appeals) may, at the hearing of an appeal, allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if the Commissioner (Appeals) is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable. 9.19 We also refer sub rule 4 of rule 46A of the income tax rule which reads as under: (4) Nothing contained in this rule shall affect the power of the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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