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2022 (9) TMI 79
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....ion. 3. None appeared on behalf of the assessee. Shri Rupesh Agrawal, Ld. Sr. DR appeared for the revenue. 4. The assessee in appeal before the Tribunal raising the following grounds of appeal: "1) For that the order passed u/s. 250(6) dated 30-05-2018 is bad both in law and in facts. 2) For that the CIT(A) erred in sustaining the addition made of Rs.5,00,000 by the A.O. on a/c. of unexplained capital. 3) For that the CIT(A) erred in sustaining an addition of Rs.1,50,000 on a/c of tanker. 4) For that the CIT(A) erred in sustaining an addition of Rs.52,685 on a/c VAT payable. 5) For that the CIT(A) erred in sustaining an addition of Rs.2,00,000 on a/c of security deposit. 6) For that the CIT(A) erred in sustaining an addition of Rs.2,50,343 on a/c unexplained purchases. 7) For that the CIT(A) erred in sustaining the addition of Rs.3,34,947 being 30% of expenses claimed of Rs.11,16,490 under the head fuel & repairs. 8. For that the CIT(A) erred in sustaining an addition of Rs.1,09,600 out of expenses claimed under the head bonus of Rs.4,02,600. 9) For that the CIT(A) erred in sustaining an addition....
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....ses claimed of Rs. 7,62,075 2,28,622 10. 30% of expenses claimed of Rs.4,96,280 under the head staff welfare 1,48,884 11. Out of Misc. expenses & general expenses 20% of expenses claimed of Rs. 5,45,085 1,09,017 12. Out of office expenses & stationery expenses 15% of expenses claimed of Rs. 6,96,283 1,04,442 13. Disallowance u/s. 80C 80,892 Total 26,45,647/- 7. Dissatisfied with the above order, the assessee preferred an appeal before the Ld. CIT(A). However, the appeal of the assessee was dismissed by the Ld. CIT(A). Dissatisfied with the above order passed by the Ld. CIT(A), the assessee preferred an appeal before this Tribunal. 8. While going through the grounds of appeal raised by the assessee before this Tribunal there are almost 14 grounds raised by the assessee. The ground no. 1 raised by the assessee is general in nature, therefore, need not to be adjudicated. 9. Ground no. 2 raised by the assessee stating that Ld. CIT(A) erred in sustaining the addition made Rs.5,00,000/- by the AO on account of unexplained cash introduced as capital. While deciding this issue, the Ld. AO while framing the assessment observed ....
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....ld be shortfall of Rs. 3 lakhs in the capital account of the appellant, even after crediting the net profit for the year under appeal. On the contrary, on the verification of the capital account of the appellant, it was found that there was net addition of Rs. 5 lakhs along with net profit for the year. Since, the appellant has not produced any credible evidence whatsoever in this regard, therefore, I'am constrained to confirm the action of AO in invoking the provisions of section 69 of the Act and accordingly, the addition made on this account is being upheld." 9.2. We have heard at length the Ld. Sr. DR and note that the Ld. CIT(A) has passed a speaking order in respect of addition of Rs. 5 lakh as unexplained capital, in respect of this issue, the AO had put questionnaire dated 11.07.2014 and was asked to file the assessee regarding genuineness of capital introduced. But, the assessee had not complied in response to notice issued by the AO, no documentary evidences regarding genuineness of such introduction of capital before AO. Therefore, the AO had no other option but Rs. 5,00,000/- introduced capital was treated as unexplained capital investment u/s 69 of the Act and added....
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....d back to the total income of the assessee as her unexplained investment." 10.1. Aggrieved against the action of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A), who while deciding the issue made the following observations: "In the course of the assessment proceedings of the case, it has been found that the appellant had shown income from transportation but, on verification of the balance sheet of the appellant, no tanker/lorry was found to be disclosed. Further, no evidence has been brought on record as to whether this transportation business was carried by taking the tanker or lorry on hire. However, the AO was very considered to bring to tax and an amount of RS.1.50 lakhs towards unexplained investment into tanker/lorry used for the purposes of the transportation business of appellant for tax which being very reasonable, is, being upheld and this ground of appeal is, therefore, dismissed." 10.2. We have heard at length the Ld. Sr. DR and note that the Ld. CIT(A) has passed a speaking order in respect of addition of Rs. 1,50,000 on account of tanker, while ld. AO deciding the instant issue, the AO noticed that an income of transportation has been....
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.... "It has been also found in the course of the assessment proceedings of the case that the appellant had not paid a sum of Rs. 52,685/- shown to be an outstanding amount for VAT, thus hit by the mischief of section 43B of the Act. No explanation whatsoever either in the course of the assessment proceedings of the case or in the course of the appellate proceedings of the case had been produced that such outstanding VAT payment had been made on or before the date of the filing of the return of income. In absence of such details, I'm inclined to confirm the action of AO on this account, and therefore, this ground of appeal is dismissed." 11.2. We have heard at length the Ld. Sr. DR and note that the Ld. CIT(A) has passed a speaking order in respect of addition of Rs. 52,685 on account of VAT liability while we are going through the findings and material available on record in respect of sustaining the addition of Rs. 52,685/- on account of VAT liability, the AO on perusal of audited account, it was noticed by the AO that VAT amounting to Rs. 52,685/- was shown as payable. However, the AO was asked the assessee to submit the copy of challan to support the actual payment of....
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....r during the course of hearing, the amount of security deposit of Rs.2,00,000 is treated as her unexplained investment u/s 69 of the I.T. act and the same is added back to her total income." 12.1. Aggrieved against the action of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A), who while deciding the issue made the following observations: "At the time of assessment proceeding of the case, it has been found out by the AO that there was a security deposit of Rs.2 lakhs made by DD No.808775 dated 17/02/2004 made in favour of IOC. But, said security deposit was not found to be disclosed in the balance sheet of the appellant and no explanation for not disclosing the said security deposit in its account was offered leading AO to invoke the provisions of section 69 of the Act and bringing the amount to tax in the hands of the appellant. In the course of the appellate proceedings of the case, once again, no explanation whatsoever was offered in this regard, accordingly, I have no option but to agree with the action of the AO in invoking the provisions of section 69 of the Act which is being upheld." 12.2. We have heard at length the Ld. Sr. DR and note that....
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....,290/- is treated as her unexplained investment and added back to her total income. Further, as the unaccounted purchase has not been taken into closing stock, it is evident that the assessee must have sold it and had earned profit on it. The assessee has shown GP @ of 2.06 of turnover in her return of income for the A.Y 2012-13. Therefore, this rate of OP is applied on the above unaccounted purchase of Rs. 2,45,290/- and accordingly an amount of Rs. 5,053/- is added as extra profit earned by the assessee on sale of the petroleum products purchased out of books (as discussed above)." 13.1 Aggrieved against the action of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A), who while deciding the issue made the following observations: "In the course of the assessment proceedings of the case, it has been found out by the AO that on comparison of purchases and sales of the appellant, there was difference of Rs.2,45,290/-. No explanation whatsoever in respect of the same was offered at the time of assessment proceeding the case, neither any explanation was put forth at the time of the appellate proceeding of the case. Since, the said difference was found to be....
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.... has observed as under: "The assessee besides gross profit of Rs.83,12,192/- has credited the profit & loss a/c with following income: 1.) Discount received :- Rs. 4,38,540/- 2.) Transportation income :- Rs. 11,44,847/- 3.) Credit Note :- Rs. 4,52,100/- Out of the above, income of Rs. 4,52,109/- through credit note is on account of compensation claim of Xtra care. On perusal of the profit & loss a/c it was found that the assessee against all these income of Rs.98,95,579/- has claimed expenses under twenty two different heads of Rs.95,57,699/- and showing net profit of Rs.7,89,980/- only from all ventures which includes the compensation claim. Therefore factually the assessee has shown net profit of Rs.3,37,880/- only against the total sale of Rs.40.10 crores i.e. 0.08% . Hence the expenses claimed by the assessee appears very excessive, unreasonable and on a very higher side which is also strengthened from the enquiry report of the ITI who on physical verification did not get any supportive bills and vouchers of claimed expenses. The assessee has claimed expenses under the head fuel of Rs.6,18,240/- repair & maintenance of Rs.4,....
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.... "The profit & loss a/c further transpired that the assessee has claimed expenses of Rs.8,72,430/- as sale promotion. Inspite of repeated opportunities, the assessee neither produced her books of a/c nor filed a single evidences of such huge expenses. The claim of such huge expense under the head on sale promotion appears very unrealistic when compared to other petrol pumps of this area. The ITI, who was directed to enquire about the genuineness of expense has submitted in his enquiry report that "it was told that to increase the sale such expenses are made. The customers are given different items like Lungi, Baniyan, Tooth Paste, Glass Spoon etc. A palm plate showing schemes of gifts on purchase of certain item of petrol and diesel has been obtained. But there was no stock of any items which are given as gifts nor get any bills and vouchers of such expense. The staff goes to different cities and states to moblise the truck owners to get the fuel from her pump. But did not submit any evidences of the same." The claim as made by the assessee do not have any evidences like bills vouchers and copy of agreement if any made between the assessee or the truck owners. One importan....
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.... aid at the business premises of the assessee. Besides all, the most important thing is to mention here that she was unable to give any supportive evidences. Hence the genuineness of expenses is doubtful. It is further pertinent to mention here that in addition to the above expenses of Rs.4,96,280/- under the head staff welfare, the assessee has claimed an expo of Rs.3,19,768/- under the head office exp also. Hence in absence of any supportive evidences, there is no doubt that the assessee has deliberately and without any basis has claimed excessive exp. to lower down her income. Therefore, the nature of expenditure and the lack of proper supporting evidences, payments made against the expenses are not fully verifiable in the manner of quantum, authenticity and the purpose. Further it also cannot be ascertained that entire expenditure is attributable to his business activities. Hence considering the above facts 30% of Rs.4,96,280/- i.e. Rs.1,48,884/- is disallowed and added back to the total income of the assessee treating it as excessive and unreasonable." "The profit and loss a/c of the assessee further transpired that the assessee in addition of claiming exp. under all ....
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....r the head Fuel, Repair & transportation income, Rs.1,09,600/- on account of Bonus, Rs.4,36,215/- on account of sales promotion, Rs.2,28,622/- on account of travelling & conveyance , Rs.1,48,884/- on account of staff welfare, Rs.1,09,017/- under the head Misc. & General, Rs.1,04,442/- on account of office expenses and printing & stationary are without any basis and quite fit to be deleted. 9.1. In the course of assessment proceedings of the case, the AO had found out that appellant had incurred expenditure against discount received, transportation income, credit note, sales promotion, travelling and conveyance, miscellaneous in general expenses, festival expenses, head office expenses etc. the appellant was especially requested to justify these expenses being wholly and exclusively laid out for the purposes of the business as mandated under section 37(1) of the Act. But, the appellant could not offer any verifiable explanation in this regard, rather, it was found by the AO that there was no proper bills and vouchers for having incurred these expenditure. In this regard, it would be relevant to look into the provisions of section 37 (1 ) the act which is extracted as under:....
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....he labourers engaged by the assessee were placed on record. The appellant could not produce books of account as the same were alleged to have been lost/not traceable. 9.3. The hon'ble High Court of Delhi in the case of National Industrial Corporation Ltd. 258 ITR 575 held that erroneous or disallowed in expenditure or part of it, it is essential to record in finding that such expenditure or part thereof was for non-business purposes. 9.4 In view of this and also respectfully following the judgments of the honourable courts supra, action of the AO in this regard is being upheld. 10. I have gone through the assessment order and submissions made by the appellant in the course of the appellate proceeding as evident from the Statement of Facts enclosed with the Form 35 forming part of the Appeal Memo. It is found that appellant had claimed expenses under the head bonus amounting to Rs. 4,02,600/- . It has been contended by the appellant that staff at the petrol pumps had been paid bonus on 2 occasions during the year i.e. on Holi and Diwali. The payment of bonus had been claimed to be one month salary of the staff. However, on verification of the salary pa....