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Income Tax Appellate Tribunal, RANCHI BENCH
Before: SHRI SONJOY SARMA & SHRI GIRISH AGRAWAL
O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi vide Order No. ITBA/NFAC/S/250/2022-23/1042663012(1) dated 08.04.2022 against the order of Assessing Officer, National e-Assessment Centre, Delhi u/s. 143(3) read with sections 143(3A) & 143(3B) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 03.03.2021 for AY 2018-19.
Grounds of appeal raised by the assessee are reproduced as under:
“1. Petitioner firm is engaged in Business or franchise agency for readymade clothes. Firm get commission income from sales effected from show room. Expenses like show room maintenance, Salary, Electricity charges, stationery etc. are borne by firm. That Ld. CIT(A) erred in law as well fact of case in confirming addition of Rs.18,96,108/- under section 40A(3) of I. T. Act,1961.
Vivid Vestures, AY: 2018-19. 2, Addition was made u/s 40A(3) on the basis of entries in cash book produced by appellant on receipt of show cause notice appellant submitted payment vouchers . It is submitted to AO that entries in cash book are for total payment made in a day, However from vouchers. It is evident that payment to each payee is less than Rs.10000 section 40A(3) of income tax reads as under Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in n day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure. Appellant requested AO to take note of words to a person in a day.
3. AO rejected the payment vouchers on the ground that the payments vouchers are after thought attempt whereas payment vouchers were submitted first time. Ld CIT (appeal) confirmed the addition on same grounds. Whereas payment vouchers was submitted first time. Ld AO has made the addition on the basis of doubt, he has no evidence to suggest that evidences submitted were after thought. That other ground if any shall be urged at the time of hearing.”
Brief facts of the case are that assessee filed its return of income on 18.08.2018 reporting total income at Rs.8,95,060/-. In the course of assessment, Ld. AO noted that assessee had made certain payments in cash exceeding Rs.10,000/- mainly relating to salary paid. Assessee had furnished the payment vouchers in respect of salary paid to staff in cash. On their verification, Ld. AO observed that there are more than one payee in a single voucher in many cases whereas under proper accounting norms, each voucher has to be for one single payee. Ld. CIT(A) while giving his finding has observed that there are two sets of details which have been furnished by the assessee in respect of data pertaining to salaries paid to various persons. Before us, Ld. Counsel has referred to a paper book containing 58 pages and pointed out to certain entries in respect of salary payments. From the perusal of the material placed on record, it is not discernible as to which is the proper set of documents to be relied upon for the purpose of considering the claim of the assessee. There are many names in the vouchers which are not reflected in the replies filed by Vivid Vestures, AY: 2018-19. the assessee to whom salary has been paid and claimed as an expenditure as noted by the Ld. AO in respect of data furnished by the assessee.
Ld. Counsel before the Bench prayed to remit the mater back to the file of Ld. AO by giving an assurance that assessee would furnish all the documents and books of account so as to enable the Ld. AO to verify the claim of the assessee from the records. Considering the observations of Ld. CIT(A) referring to two sets of details furnished by the assessee vis-à-vis prayer made by the Ld. Counsel by giving an assurance as stated above, we find it proper to remit the matter back to the file of Ld. AO with a direction to both the assessee as well as the Ld. AO to get the proper set of records and details verified in respect of the claim of salary expenses by the assessee. Based upon verification and satisfaction, Ld. AO may consider the claim of the assessee in accordance with the provisions of law.