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Facts
The assessee, a director, filed a return which was subsequently reopened under Section 147. During reassessment proceedings, the AO disallowed various deductions, including expenses and interest on a loan for share purchase, citing lack of supporting evidence. The CIT(A) upheld these disallowances for the same reason.
Held
The Tribunal, in the interest of justice, granted the assessee one final opportunity to present all supporting evidence before the CIT(A). It clarified that no further chances would be provided if the assessee failed to comply with this requirement.
Key Issues
Whether the disallowances made by the lower authorities for lack of evidence were justified, and if the assessee should be afforded another opportunity to furnish the requisite documents.
Sections Cited
147, 148, 57(iii), 143(3)
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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI. LAXMI PRASAD SAHU & SHRI. SOUNDARARAJAN K
ORDER Per Laxmi Prasad Sahu, Accountant Member : All these three appeals filed by the assessee against the separate Orders passed by CIT(A), raising various grounds as per the grounds of appeals. The grounds raised by the assessee for all the three years are similar. For the sake of brevity and convenience, we are first taking appeal in . The decision taken in shall apply mutatis mutandis to appeals in & 2504/Bang/2024.
2. Briefly stated, the facts of the case are that assessee is a Director of M/s. Yojaka India Private Limited. Assessee filed return of income on 31.03.2014 declaring income of Rs.41,48,630/-. The case was reopened under section 147 of the Act and notice under section 148 of the Act was issued to the assessee on 27.03.2019. The assessee did not file return of to 2504/Bang/2024 Page 2 of 3 income within the stipulated within 30 days and hence letter was issued to the assessee requesting to file return of income and assessee did not respond to the show cause notice issued. Thereafter, assessee filed return of income on 23.09.2019 declaring income of Rs.59,92,280/-. Subsequently, other statutory notices were issued to the assessee. During the course of reassessment proceedings, the AO observed that without any supporting evidences, assessee has claimed deduction of Rs.6,93,229/- which is wrong and erroneous. Therefore, those deductions claimed by the assessee without supporting evidences were disallowed (reimbursement of expenses, uniform allowance, medical allowance, etc) (disallowance of Rs.6,93,229 + Rs.11,800 + Rs.15,000). The AO further observed that assessee has claimed deduction of Rs.12,23,279/- under section 57(iii) of the Act and assessee claimed that this deduction is in respect of interest paid on loan borrowed from bank to purchase shares of M/s. Yojaka India Private Limited. The AO called for the evidences and the same were not provided in spite of sufficient time being granted to the assessee. Therefore, it was disallowed for want of supporting evidence.
3. Aggrieved from the above Order, assessee filed appeal before the CIT(A). During the course of appellate proceedings, written submissions were filed and the CIT(A), NFAC was not satisfied with the submissions and disallowed for want of evidences in support of the expenditures claimed by the assessee.
Aggrieved from the above Order, assessee filed appeal before the Tribunal. The learned Counsel for the assessee submitted that assessee has sufficient evidences in support of expenditures claimed under different heads but due to oversight and no proper representation from the assessee's side, assessee was unable to produce the requisite documents in support of its claim and undertook that if a chance is given to the assessee, assessee shall comply with the requirements. to 2504/Bang/2024 Page 3 of 3 5. The learned DR objected to give further opportunities to the assessee as the lower authorities had provided sufficient opportunities to the assessee to furnish the supporting documents in support of its claim.
Considering the rival submissions, we noted that assessee claimed expenditure in the return of income as observed by the AO while passing Order under section 143(3) r.w.s. 147 of the Act for want of supporting evidences. The expenditures were not allowed and before the ld. CIT(A) no evidences were produced by the assessee. Considering the facts of the case and in the interest of justice, assessee is given one more opportunity to represent his case before the CIT(A). In case assessee does not comply with the requirement, no leniency of providing second chance will be accorded.
In the result, appeals filed by the assessee are allowed for statistical purposes.
Pronounced in the court on the date mentioned on the caption page.