2017 (11) TMI 998

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....: 1. "The Ld. CIT (A) has erred in law and facts of the case in confirming the addition of Rs. 51,00,000/- made by the AO by rejecting the claim of expenses incurred for the business, which is arbitrary, baseless, unjustified and bad in law. 2. The assessee craves to leave the right to add, amend or modify the grounds of appeal." 2. Briefly stated facts are that the assessee is a company engaged in the business of providing IT enabled connectivity, management and control of buildings, integrated facilities and public infrastructure leading to remote facility management. Copy of profit and loss account, balance sheet and audit report u/s 44AB of the Act, for the year under consideration, was submitted by the assessee dur....

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....2011 issued by Nesma Trading Company, Ld. CIT (A) recorded that the assessee's name is not to be found on the invoice dated 16.03.2010, whereas under invoice dated 30.01.2011 issued by Tridonic Atco and Nesma Trading Company the goods were delivered one and half year and one year respectively earlier to the issuance of the invoice, as such, Ld. CIT (A) thought that it is quite unlikely, as such, they cannot be believed. On this score, he rejected the expenses to a tune of Rs. 20,49,100/- covered by the invoices referred to above. In respect of the balance amount of Rs. 30,50,900/- the Ld. CIT (A) stated that in spite of number of demands the assessee failed to furnish the details in respect of the expenditure covered by this amount, as such....

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.... these circumstances, the assessee considered the balance provision amount of Rs. 30,50,900/- as no longer necessary and written off the liability to the tune of Rs. 30,50,900/- in the next year and paid the taxes thereon. However, without appreciating these facts Ld. CIT (A) dismissed the appeal stating that no details for Rs. 30,50,900/- were furnished, as such, such expenses are liable to the disallowed and in so far as the balance amount of Rs. 20,40,900/-, the invoices were not found to be satisfactory, as such, that amount is also liable to be disallowed. 5. Ld. DR argued that there is an attempt to over write the invoices as is evident from the invoice dated 30.01.2011 said to have been issued by Nesma Trading Company and the auth....

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....f expenses for which the provision was created in the year under consideration. Ld. CIT (A) further recorded a finding that the assessee produced three invoices namely two invoices issued by one Tridonic Atco and one by Nesma Trading Company, whereas no details in respect of the expense of Rs. 30,50,900/- was ever produced. There is no dispute in respect of the observations of the Ld. CIT (A) that the delivery of goods under the vouchers submitted by the assessee took place more than one year prior to the date of invoices. In such an event, we do not find any reasonable explanation from the assessee as to why the provision is created for the amounts more than twice the expenditure that was incurred towards purchase of goods. 7. Further e....

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....ishing of the primary details at any stage of proceedings and the infirmities in the documents that were produced at the appellate stage, created a reasonable doubt as to the authenticity of the provision and the expenditure. We do not find anything unusual in the Ld. CIT (A) entertaining a doubt that it is very unlikely that a foreign supplier waits for a year or so for issuing the invoices and receiving the payments after delivery of goods. Certainly this unusual commercial transaction requires the proof in the form of the terms and conditions, correspondence and other evidence like delivery note, shipment note, etc. Assessee failed to plead before us any reasons for their inability in securing such evidence at least by now in support of ....