DYNAMIC CLEANING SOLUTION LLP,MUMBAI vs. ACIT CIRCLE 24(1), MUMBAI

Ground 1: Arbitrariness and Lack of Specific Finding The learned CIT(A) erred in law and on facts in confirming the addition of Rs.77,25,885/- made by the AO in respect of year-end provisions for business expenses, without appreciating that the appellant follows the mercantile system of accounting and that the said liabilities had accrued during the relevant previous year. The said provisions/ liabilities also included month end statutory dues which were payable in the subsequent month.

Ground 2: Erroneous invocation of Section 68 of the Act

Ground 3: Books of Accounts Not Rejected The learned CIT(A) erred in confirming the ad-hoc disallowance of ₹15,26,441/-being 20% of the alleged expenditure, without rejecting the books of accounts or pointing out any specific defect, discrepancy or non- business nature of expenditure and without invoking any specific provision of the Act.

Ground 4: Violation of Natural Justice The learned CIT(A) erred in law and on facts in confirming the additions without properly appreciating the explanations and evidences furnished by the appellant, thereby violating the principles of natural justice.

The learned CIT(A) failed to appreciate the facts and material available on record and erred in mechanically confirming the additions made by the AO without independent application of mind.

The additions confirmed by the learned CIT(A) are excessive, arbitrary and unjustified, and deserve to be deleted in full.

On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) ["CIT(A)"] erred in confirming the order passed by the Assessing Officer ("AO") under section 143(3) of the Income Tax Act, 1961 ("the Act"), which is bad in law and void ab initio.

Ground 8: Jurisdictional Error in Invoking Section 154

The appellant craves leave to add, amend, alter or withdraw any of the above grounds of appeal at or before the time of hearing.

None appeared despite repeated calls. We also notice that on the last date of hearing, the assessee had sought an adjournment, and accordingly, the matter was fixed for today. Even today, none appeared on behalf of the assessee.

On the contrary, the Ld. Departmental Representative (DR) is present and ready to advance the arguments. Therefore, we proceed to hear the case ex parte.

From the records, we notice that the assessee filed its return of income for AY 2017-18 on 24.10.2017. The assessment proceedings were completed under Section 143(3) of the Income-tax Act, 1961 (the “Act”), wherein the Assessing Officer (AO) made a disallowance of Rs. 15,26,441 and an addition of Rs. 77,25,885 as unexplained credit under Section 68 of the Act.

Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee and specifically observed that, during the appellate proceedings, due and sufficient opportunity had been provided to the assessee to file documentary evidence under Rule 46A of the Income-tax Rules, 1962, and to substantiate the genuineness of the expenditure claimed. However, the assessee failed to furnish complete and verifiable documentary evidence before the Revenue Authorities. 3

Thus, in the absence of proper and supporting documentary evidence, the Ld. CIT(A) observed that the AO was fully justified in concluding that the genuineness of the expenditure could not be verified. Accordingly, the appeal of the assessee was dismissed.

Even otherwise, no new facts, circumstances, or documentary evidence have been placed on record by the assessee to controvert or rebut the findings duly recorded by the Ld. CIT(A). Therefore, we find no reason to interfere with or deviate from the findings so recorded by the Ld. CIT(A).

Accordingly, we dismiss the grounds raised by the assessee and uphold the order of the Ld. CIT(A).

In the result, appeal filed by the Assessee stands dismissed.