TaxTMI 
TaxTMI 
2024 (9) TMI 1116
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....nses incurred towards "examination/inspection charges which actually represents amount paid to PO/EO/AO of the Government agencies". For this, assessee has raised identically 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 ....
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....go/container by AO/EO/PO. The AO has not considered the submissions of the assessee but made addition by observing in para 6.3 as under:- "The assessee's submission is duly considered and found to be not acceptable as Shri P.G. Sundarrajan, who is the managing 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/-. Aggr....
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....penses allowable u/s. 37 of the Act. He stated that these expenditure are not hit by firstly Explanation to Section 37(1) of the Act, for the reason that no payment is made to government employee or for any purpose which is an offence or which is prohibited by law. The ld.counsel claimed that these expenditures were paid for the purpose mentioned 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 e....
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....2012-13 to 2016-17 & 2018-19 that the assessee has not incurred expenditure to the extent it is claimed. The AO reproduced the relevant details for assessment year 2013-14 in assessment order as under:- Sl. No Nature of Expense Amount as per return of income filed Actual as per the financial statements furnished during the course of survey Difference 1 Salaries and Wages 30,42,309 28,87,960 1,54,349 2 Other expenses 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/- ....
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....ated 23.03.2022 to explain as to why 30% of shipping and handling expenses should not be disallowed due to non-deduction of TDS. The assessee has not submitted any documentary evidence and since the assessee has not deducted TDS, 30% of the expenses amounting to Rs. 59,02,322/- was disallowed. Aggrieved, assessee preferred appeal before CIT(A). 14. The assessee before CIT(A) claimed that TDS is not applicable as the expenditure relates to freight, transport and foreign liner, who have filed 'nil deduction' certificates 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....
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.... 20. We have heard rival contentions and gone through facts and circumstances of the case. The ld.counsel for the assessee before us claimed that this expenditure has already been considered while computing addition offered by assessee of Rs. 40,00,000/- in this assessment year. He stated that these expenses are part of declaration made by assessee of Rs. 40,00,000/- and hence, it cannot be separately treated. We find considerable force in the plea of assessee as the Revenue could not point out what is the bifurcation of Rs. 40,00,000/-. We noted that the assessee has already 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,....
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....e and it is not supported by any bill and thus, he referred to question Nos.8,10 & 11. The CIT(A) recorded this fact in para 7.9 as under:- "7.9 However, it is noticed from statement u/s 133A reproduced above that an amount Rs. 14,44,200/- has been incurred during the year towards 'Incidental Expenditure' and it is not supported by any Bills. This fact was admitted by appellant while replying to question number 8,10 and 11." 24. At the time of hearing before us, the ld.counsel for the assessee read out question Nos.10, 11 & 11 and answer to the same and stated that the assessee has disclosed this sum of Rs. 1.10 crores and if separate addition is made for this amount 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 iss....