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Facts
The Revenue appealed against the orders of the CIT(A) which deleted additions made by the AO concerning the sale price of commercial space and reimbursement of expenses. The case involved search and seizure operations and subsequent assessment orders.
Held
The Tribunal held that the sale consideration adopted by the AO based on third-party statements was incorrect without concrete evidence. Regarding reimbursement of expenses, it was held that such payments were reimbursement of expenditure and not income, and thus, not taxable.
Key Issues
Whether the sale consideration adopted by the AO is valid without corroborating evidence, and whether the reimbursement of expenses constitutes taxable income for the assessee.
Sections Cited
132, 153A, 143(3), 131, 46A
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Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
per Rule 46 of IT Rules, 1962 (“the Rules”), the Ld. CIT(A) should have called for a remand report from Ld. AO, which the Ld. CIT(A) failed to do so. Therefore the Ld. DR submitted that, the order passed by the Ld. CIT(A) is in contravention of Rule 46 of the Rules and is required to be set aside. He prayed before the bench to set aside the issue to the file of Ld. AO for verification of the bills / vouchers / evidence in support of expenditure of Rs.6,23,10,775/- and to decide the allowability of the same. 20. Per contra, the Ld. AR submitted that, the assessee had filed all the ledger accounts of the relevant expenditure of Rs.6,23,10,775/- containing the details of expenditure along with the corresponding bank statements from which the payments had been made. However, only the relevant bills / vouchers could not be produced before the Ld. AO. He further submitted that, all the relevant vouchers / bills / evidences produced before the Ld. CIT(A) in support of claim of expenditure of Rs.6,23,10,775/- and after verifying the same, the Ld. CIT(A) has deleted the addition made by the Ld. AO. Therefore, the Ld. AR prayed before the bench to uphold the order of Ld. CIT(A). 21. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We found that, the assessee had filed all the ledger accounts of the relevant expenditure of Rs.6,23,10,775/- containing the details of expenditure along with the corresponding bank statements from which the payments had been made. However, only the relevant bills / vouchers could not be produced before the Ld. Assessing Officer and consequently for want of bills and vouchers, the Ld. AO made the addition. To make up the said deficiency, all the relevant vouchers / bills / evidences produced by the assessee before the Ld. CIT(A) in support of claim of expenditure of Rs.6,23,10,775/. Therefore, the claim of assessee has been substantiated by the extracts in the book of account and supporting bills and vouchers which was further corroborated by independent evidence in the shape of Bank Account Statement. Once the claim has been supported by Books of Account and bills & vouchers as well as independent evidence of Bank Account Statement, the need of further verification was right not felt by Ld. CIT(A). After going through all the vouchers / bills / evidences in support of expenditure of Rs.6,23,10,775/-, the Ld. CIT(A) has given factual finding at para no.4.2 of his order that the expenditure incurred by the assessee are mostly by cheque / banking channel and the assessee furnished details of all these expenses and accordingly deleted the addition made by the Ld. AO. Therefore, the decision of Ld. CIT(A) is based on proper evaluation of evidence. As far as the objection of the Ld. DR regarding not calling of remand report is concerned, where the evidence filed are from independent source and are sufficient to decide the matter and no defect or shortcoming in the said evidence is brought on record, then we do not find any merit in the said objection of Revenue. Accordingly, we do not find any infirmity in the order of Ld. CIT(A) and therefore, we uphold the order of Ld. CIT(A). Accordingly, the appeal of the Revenue is dismissed.