9911796707
TMI Blog2024 (9) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... e allowable u/s. 37 - Hence, we allow this expenditure and set aside the order of AO as well as that of the CIT(A) on this issue. Hence, this issue is allowed. Addition on ad hoc basis without specifying which voucher is not verifiable - Even the Revenue has accepted that these are normal business expenses but only quantification is in dispute. In the absence of bills and vouchers, the AO estimated the disallowance at 20% and confirmed by CIT(A). We feel that a reasonable disallowance of 10% will serve the interest of justice and hence, we restrict the disallowance at 10% and direct the AO to re-compute the income accordingly. In term of the above, we partly-allow the claim of assessee and this ground raised by assessee is partly-allowed. Disallowance of 40(a)(ia) - most of the deductees filed a nil deduction certificate (foreign liner) - assessee made only submission that this issue can be remitted back to the file of the AO and assessee will file CA certificate in view of second proviso to section 40(a)(ia) of the Act, where the recipient parties have included the income in their respective returns of income - HELD THAT:- After hearing both the sides and going through the facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entically worded grounds in all the years and hence, we will take the facts and circumstances and grounds raised in assessment year 2013-14 in ITA No.532/CHNY/2024 and will decide the issue. The relevant ground raised by the assessee in ground No.5 reads as under:- 5. On the facts and circumstances of the case, the ld.CIT(A) has erred both in law and facts confirming the action of the ld.AO despite the fact that the condition precedent to invoke u/s 69C of IT Act was not satisfied. However, the chart of addition on this issue reads as under:- Assessment year Disallowance u/s. 69C of the Act 2013-14 4,38,480/- 2014-15 8,49,144/- 2015-16 13,26,300/- 2016-17 10,62,360/- 2018-19 10,63,680/- 3. Brief facts are that the assessee M/s. Prakash Shipping Agencies, a partnership firm is engaged in the business of customs brokers and holding customs brokers license issued by Custom House. A survey u/s. 133A of the Act was conducted on the business premises of the assessee by the Department on 12.11.2018 and during the course of survey, the survey party of the Department noticed that the assessee has incurred expenses towards examination charges, which represents amount paid to P.O/E.O/A.O of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng partner of the above assessee firm clearly admitted in response to question no.8 of the sworn statement recorded u/s. 133A of Income Tax Act, 1961 dated 13.11.2018 that the above expenditure actually incurred towards the payments made to PO/EO/AO and not towards travel expenses, lunch expenses, loading and unloading of goods to/from containers during inspection of AO or EO or PO as stated by the assessee in its submissions during assessment proceedings. The assessee has stated that he has incurred the expenses but the same has not been recorded in books of accounts. The AO further observed that the assessee agreed for a disclosure of Rs. 1.50 crores for assessment years 2017-18 2018-19 for the discrepancies found for covering the entire addition as stated in assessment years 2017-18 2018-19 amounting to Rs. 40,00,000/- Rs. 1,10,00,000/- respectively. However, the AO added this amount of Rs. 4,38,480/-. Aggrieved, assessee preferred appeal before the CIT(A). 4. The CIT(A) after considering the submissions of the assessee confirmed the action of the AO by observing in paras 7.3.11 to 7.3.16 as under:- 7.3.11 It is noticed that while finalizing the assessment, the AO has not disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned above and from the beginning this was the stand of assessee and it is a normal business expense. The ld.counsel for the assessee before us stated that all these expenditure are recorded in the books of accounts and it is not unrecorded expenditure and hence, there is no application of section 69C of the Act as sought for by the AO and CIT(A). According to ld.counsel, section 69C of the Act envisages that expenditure whose source is unexplained by the assessee but not the expenditure which is recorded in the books of accounts is to be added. Here, he explained that expenditure recorded in the books of accounts is evidenced by self-made vouchers. On the other hand, the ld. Senior DR relied on the assessment order and the order of CIT(A). We noted that there is no evidence that these amounts are paid by the assessee either to the government employees i.e., AO/EO/PO and these payments are made by assessee or expenditure is incurred by the assessee for the purpose, which is an offence or which is prohibited by law, as envisaged in the Explanation to Section 37(1) of the Act. Hence, in the given facts and circumstances and the fact that expenditure is incurred by the assessee towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10,41,544 --- 10,41,544 3 Shipping and Handling Expenses --- (-) 33,43,820 The AO noted during the course of assessment proceedings that the assessee has not submitted documentary evidences i.e., bills and vouchers during assessment proceedings despite multiple opportunities and hence, he made disallowance of 20% of the above mentioned expenses and accordingly made disallowance of Rs. 8,16,770/- out of the total expenditure claimed by assessee of Rs. 40,83,853/-. Aggrieved, assessee preferred appeal before CIT(A). 9. Before CIT(A), the assessee filed documents to prove genuineness of expenditure i.e., ledger copies of salaries and wages, ledger copies of other expenses amounting to Rs. 30,42,309/- and Rs. 10,41,544/- respectively. But the assessee could not produce bills and vouchers and therefore, the CIT(A) also confirmed the action of the AO. Aggrieved, assessee is in appeal before the Tribunal. 10. We have heard rival contentions and gone through facts and circumstances of the case. Admittedly, the expenditure claimed under the head like salary and wages, other expenses, shipping and handling expenses in the return were claimed in the return originally filed as well as in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having less than 10 goods carriage vehicle but CIT(A) noted that no nil deduction certificate was filed either before AO nor during appeal proceedings before CIT(A). Hence, he dismissed this issue by observing in para 7.5.5 as under:- 7.5.5. However, it is noticed that in the return of income entire expenditure of Rs. 1,96,74,408/- (para 7, page 4 of assessment order) is shown to have incurred towards freight. It is the contention of appellant that all the payees have Nil TDS deduction certificates with assessee because of which no TDS was made. However, it is noticed that copies of NIL deduction certificates were neither filed before AO nor during appeal proceedings. Hence disallowance made by AO is confirmed. Accordingly, Ground of appeal No.6 is dismissed. Aggrieved, assessee came in appeal before the Tribunal. 15. Before us, the ld.counsel for the assessee made only submission that this issue can be remitted back to the file of the AO and assessee will file CA certificate in view of second proviso to section 40(a)(ia) of the Act, where the recipient parties have included the income in their respective returns of income. To this proposition, the ld. Senior DR also not objected. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady declared a sum of Rs. 40,00,000/- in the disclosure including this under this head and hence, we delete this addition. Accordingly, this issue of assessee s appeal is allowed. ITA No.536/CHNY/2024, AY 2017-18 21. The only issue in this appeal of assessee is as regards to the order of CIT(A) restricting the action of AO in confirming addition of Rs. 14,44,200/- on account of incidental expenditure out of the total amount admitted by the assessee during the course of survey at Rs. 1.10 crores. For this, assessee has raised the following ground No.3:- 3. On the facts and circumstances of the case, the ld.CIT(A) has erred both in law and in facts in confirming the addition of Rs. 14,44,200/- despite the fact that the expenditure was exclusively incurred for the purpose of business. 22. We have heard rival contentions and gone through facts and circumstances of the case. The facts are that the AO while completing assessment added additional income admitted by the assessee during the course of survey relating to this assessment year at Rs. 1.10 crores. The AO added the sum as under:- Returned Income : Rs. 11,29,480/- Add: Additional income as admitted by the assessee during the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of Rs. 14,44,200/- on account of expenditure incurred during the year on account of incidental expenditure not supported by bills, the same tantamount to double addition. We noted that this plea of the assessee that this amount tantamount to double addition seems logical as the assessee has already disclosed a sum of Rs. 1.10 crores as additional income and further, making addition of this expenditure of incidental expenses of Rs. 14,44,200/- makes no sense. Hence, we delete this addition and allow this issue of assessee s appeal. Accordingly, this appeal of the assessee is allowed. ITA No.537/CHNY/2024, AY 2018-19 25. The next issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the AO in disallowing a sum of Rs. 20,59,900/- on adhoc basis being 15% of entire expenditure debited in the P L account. For this, assessee has raised the following ground No.6:- 6. On the facts and circumstances of the case, the ld.CIT(A) has erred both in law and in facts in confirming the action of the ld.AO despite the fact that the ld.AO disallowed a sum of Rs. 20,59,900/- on ad hoc basis, being 15% of entire expenditure debited in P L Account without s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
