TaxTMI 
TaxTMI 
2025 (12) TMI 1165
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.... Sanda Wellbeing Pvt. Ltd., it was noticed that during FY 2012-13 the employer had credited/transferred a total sum of Rs. 1,70,57,344/- into the bank account of the assessee, including salary of Rs. 42,01,612/- and TDS of Rs. 9,21,627/-. Based on this information and the failure of the assessee to file a return, the AO recorded reasons to believe that income had escaped assessment and issued a notice under section 148 on 22.07.2022, which was duly served. The assessee thereafter filed a return on 22.08.2022, declaring total income of Rs. 19,11,780/- which included Rs. 21,61,780/- as salary income. 3. In his reply dated 02.01.2023assessee stated that the other monies credited to his account was towards various expenses done on behalf of the company (M/s Sanda Wellbeing Pvt Ltd.). As per reply dated 25.03.2023 the assessee submitted bank statement and list of expenses incurred for the company. Again vide reply dated 22.04.2023 the assessee submitted Form 16, Form 26AS, letter from the employer (dated 03.09.2014) stating that the Company had advanced money which was recorded as staff advances in their books. 4. The Assessing Officer recorded that the employer, in response to no....
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....f these expenses by the appellant. Also, perusal of the bank account of the appellant shows that the appellant has received customer acquisition amounts of over Rs. 20 lakhs and Rs. 25 lakhs on 03.07.2012 and 31.07.2012 respectively and the amounts have been withdrawn only partially which to my mind cannot be the practice of a company of advancing further amounts while the other previous advances had not been spent. Even otherwise, a perusal of the bank account shows substantial cash withdrawals making it difficult to accept the contention of the appellant that the money received from the company is an advance and is duly explained. More so, it is important also not to ignore that the appellant failed to give all due evidence during the assessment proceedings and the AO was constrained to pass the order by invoking section 144 of the IT Act. In the given circumstances, the action of the AO cannot be faulted with and the appeal of the appellant is accordingly dismissed." 10. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising following grounds of appeal: GROUND I a) On the facts and circumstances of the case, and in Law, The CIT(A) erre....
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....cording to the AR, this demonstrates that the company itself never regarded these amounts as the assessee's personal income. 13. The learned Departmental Representative, on the other hand, relied on the findings recorded by the Assessing Officer, particularly the conclusion in para 3.5 at page 8 of the assessment order, wherein the AO noted that, based on the letter dated 03-09-2014 issued by the company to the assessee, Mr. Mahesh Matta had clearly treated the amounts as advances and bonuses and such treatment, according to the AO, indicated that the assessee had considered the same as his personal income. The DR accordingly submitted that the assessee failed to substantiate the utilization of the advances and therefore the addition was rightly made. 14. We also notice that the assessee has placed at page 72 of the paper book a summary statement consolidated from the monthly expense sheets submitted during employment. The said summarized report reflects the following figures:- • Salary: Rs. 31,07,339/- • Customer Acquisition: Rs. 1,20,00,000/- • Expenses: Rs. 1,15,20,581.83 • Less: Adjustment: Rs. 4,79,418.17 •....
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....ther the company wrote off the alleged advances in subsequent years is not examined. The reply received under section 133(6) is neither placed on record nor confronted to the assessee. The absence of this vital document creates a lacuna in the fact-finding process. 20. Monthly statements placed in the paper book prima facie indicate that the assessee was operating a structured field-level expense system under instructions of the Sales Director. The company claims that the Sales Director has later filed an affidavit before a court stating that certain amounts were appropriated against incentives. This dimension also remains unverified. 21. In our considered view, the factual matrix is mixed and incomplete. While there is material to show that the assessee was regularly incurring expenditure on behalf of the company, the lack of primary vouchers cannot be ignored. Equally, the failure of the AO to examine foundational aspects such as TDS reversal, treatment of amounts in the employer's books, exact details of reply to notice u/s 133(6), and utilization of cash withdrawals renders the assessment unsustainable in its present form. 22. It is a well-settled judicial principle th....