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Facts
The assessee's appeal is against the order sustaining an addition of Rs. 15,00,000/- made by the AO for AY 2014-15. The AO made the addition because some vouchers were self-made or missing and not verifiable, and the assessee had offered additional income.
Held
The Tribunal held that the AO failed to specify the defects in the vouchers and the addition was not supported by corroborative evidence. The CIT(A) also confirmed the addition without proper consideration of the assessee's submissions and evidence.
Key Issues
Whether the addition made by the AO, sustained by the CIT(A), is sustainable in law when the AO failed to specify defects in vouchers and the assessee produced supporting documents.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
The instant appeal filed by the assessee is directed against the order dated 20.02.2024 passed by the Ld. CIT(A)-3, Noida [DIN: ITBA/APL/M/250/2023- 24/1061206214(1)], arising out of the order dated 26.12.2016 passed by the DCIT, Central Circle, Meerut under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year 2014-15, sustaining the addition of Rs. 15,00,000/- made by the AO. finding while making addition that some of the vouchers submitted by the assessee were self made and some were missing and, therefore, not verifiable. Ld. AO was of the further opinion that since the assessee offered additional income of Rs. 15 lakh for taxation, the addition thereof was made to the income of the assessee. It was further submitted by him that the Ld. CIT(A) without considering the particular aspects of the matter that the Ld. AO failed to specify the bills/ vouchers which were raised and were not verifiable and made the addition; the addition since not supported by any corroborative evidence, the confirmation of addition by Ld. CIT(A) is also not sustainable in the eye of law. In this regard he has drawn Bench’s attention to pages 38 to 41 of the paper book filed by the assessee where the assessee by way of two representations/ replies dated 14.12.2016 and 25.11..2016, entire set of documents in respect of the trading/business of the assessee were placed along with the relevant documents in respect of the expenditure made by the assessee, contents whereof seem to be genuine. In fact the Ld. AO also took into consideration all those documents claimed to have been placed before him as is evident from the annexures but failed to specify the defects particularly the missing vouchers and number of self made vouchers placed by the assessee. offered addition of Rs. 15,00,000/- and in the absence of the vouchers relating to the business and trading expenses of the assessee seems not verifiable the addition is sustained.
On the other hand, it is the case of the assessee that as the entire set of documents placed before the AO without pointing out any specific defect in those documents, the addition made by the Ld. AO is not sustainable, more so, when the assessee subsequently retracted the statement already made during assessment proceedings.
The Ld. DR on the other hand supported the orders of authorities below and prayed for rejection of the instant appeal filed by the assessee.
Having heard the Ld. counsel appearing for the parties and having regard to the facts and circumstances of the case, particularly the documents placed by the assessee appearing at pages 38 to 41 of the paper book filed before us, which is found to have been duly acknowledged by the DCIT, Meerut on 25.11.2016, is found to have not been considered in proper perspective by the Ld. AO; neither the AO has been able to specify the defect of the missing vouchers or the number of self made vouchers and solely on the basis of the additional income so offered by the assessee during that material point of time of Rs. 15,00,000/- though before filing of the appeal before the First Appellate Authority when the assessee duly retracted from the statement already made to the AO no deliberation to that effect has been given by the Ld. CIT(A) in a positive matter., rather upholding the addition, which was made without supporting evidence by the Ld. AO, is found to be bad in law and therefore the entire addition is deleted.
In the result, assessee’s appeal is allowed.
Order pronounced in open court on 22.04.2025.