2020 (11) TMI 136 - AT - Income Tax

Tribunal overturns income addition due to lack of proper consideration of evidence

The Tribunal allowed the appeal, deleting the disputed addition of Rs. 5,00,000 in disallowed job charges. The revenue authorities failed to properly ... Disallowance of job charges paid - TDS deducted on such payment - HELD THAT:- Evidences filed by the assessee are very much important on the addition in dispute which have not been properly appreciated by the revenue authorities below. Assessee has furnished all the complete evidences of expenses and the list of names with amount of payment, mode of payment and detail of TDS deducted for which CIT(A) has given the benefit of credit of TDS and we also observe that major payments have been made by cheques and TDS has been deducted. Proper appreciation of evidences has not been done by the revenue authorities which is very much important and in our view the AO and the Ld. CIT(A) has not contradict the same - sufficient evidences have been filed by the assessee before the revenue authorities for substantiating the claim of the assessee especially on the expenditure in dispute and the TDS deducted which has not been disputed by the revenue authorities, hence, the addition in dispute has wrongly been made in the case of the assessee which deserve to be deleted. - Decided in favour of assessee. Issues:Addition of disallowed job charges without evidenceAnalysis:The appeal was filed against an order confirming the addition of Rs. 5,00,000 disallowed out of job charges paid by the assessee without any evidence on record. The assessee, engaged in civil construction, filed returns declaring income and was selected for scrutiny. The AO disallowed Rs. 5,00,000 out of job work charges claimed by the assessee, despite the AR providing documentary evidence. The Ld. CIT(A) partly allowed the appeal by granting TDS benefit but upheld the addition of Rs. 5,00,000. The assessee contended that all major payments were made through cheques with proper TDS deductions, supported by documentary evidence. The revenue authorities claimed the assessee failed to provide party-wise details of job work done. However, the Tribunal found that the assessee had submitted crucial evidence, including payment details, TDS deductions, and names of parties, which were not properly considered by the revenue authorities. The Tribunal concluded that the addition was wrongly made, and the appeal of the assessee was allowed, deleting the disputed addition.This case highlights the importance of providing comprehensive evidence to substantiate claims and the duty of revenue authorities to properly appreciate the evidence presented. The Tribunal emphasized that the assessee had fulfilled the burden of proof by submitting detailed documentation, including payment specifics and TDS deductions. The failure of the revenue authorities to adequately consider this evidence led to the erroneous addition. The decision underscores the necessity for a thorough examination of evidence before making additions to an assessee's income, ensuring a fair and just assessment process.