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Facts
The assessee filed a return declaring a business loss of Rs. 2,61,463 for AY 2020-21. During scrutiny, the AO made an addition of Rs. 70,509 for incorrect transactions and Rs. 1,46,81,618 for unsubstantiated expenditure related to toll charges (difference between debited and paid amounts to RSRDC). The CIT(A) upheld these additions, leading the assessee to appeal before the Tribunal.
Held
The Tribunal noted the assessee's failure to furnish required documents and explanations to the lower authorities. In the interest of justice, the Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer for fresh adjudication, directing the assessee to provide all relevant bank statements, documents, and details of toll charges.
Key Issues
Whether the additions made by the AO for incorrect business transactions and unsubstantiated toll charges were justified, and the validity of the claim for deduction under Section 80C, particularly given the assessee's failure to produce supporting documentation before the lower authorities.
Sections Cited
143(2), 80C
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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-SHRI SIDDHARTHA NAUTIYAL
PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 20.06.2025 passed by the Commissioner of Income Tax (Appeals)National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2020-21.
Asst. Year : 2020-21 - 2– 2. The assessee has raised the following grounds of appeal:
1. In law, on facts and in the circumstances of the case, the Hon'ble CIT(A) is not justified in upholding the addition of Rs. 70,509 made by the AO instead of Loss of Rs. 2,61,463 declared in the Return of Income. 2.In law, on facts and in the circumstances of the case, when complete explanation was furnished still the Hon'ble CIT(A) is not justified in upholding the addition of Rs.1,46,81,618 made by the AO on account of discrepancy in toll charges paid to RSRDC.
3. In law, on facts and in the circumstances of the case, the Hon'ble CIT(A) is not justified in upholding the action of the AO whereby Id AO computed the total income at Rs. 1,43,40,660 as against the Returned Loss of Rs.2,61,463.
4. In law, on facts and in the circumstances of the case, the Hon'ble CIT(A) is not justified in upholding the incorrect finding of the AO regarding claim of deduction u/s 80C of the Act.
5. The appellant craves leave to add, alter, delete and amend any ground/s of an appeal on or before hearing of the appeal.
3. The assessee is an individual. The return of income for the year under consideration was filed on 20.01.2021, declaring a current year business loss of Rs. 2,61,463/-. The case was selected for complete scrutiny, and a notice under section 143(2) of the Act was issued on 29.06.2021, specifically to examine the issue of “Income from toll plaza.” During the assessment proceedings, the Assessing Officer (AO) observed certain discrepancies between the details disclosed in the ITR and the records submitted. The assessee had claimed carry forward of current year loss of Rs. 2,61,463/- (as per row XIII of Schedule CFL). Upon verification, the AO detected errors in the computation of income and found that the assessee had shown incorrect transactions in the books of accounts. Accordingly, the AO made an addition of Rs. 70,509/- as business income for the relevant year. Further, the AO noted that the assessee had Asst. Year : 2020-21 - 3– debited toll charges of Rs. 3,62,39,768/- payable to RSRDC in the ITR. However, on verification, it was found that only Rs. 2,15,58,150/- had actually been paid, as evident from the computation of income. A show- cause notice was issued requiring the assessee to substantiate the claim of toll charges paid to Rajasthan State Road Development and Construction Corporation Ltd. The assessee, however, failed to comply with the notice. Therefore, the AO added the difference of Rs. 1,46,81,618/- (i.e., Rs. 3,62,39,768/- minus Rs. 2,15,58,150/-) to the total income, treating the same as unsubstantiated expenditure.
4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), however, upheld the order of the Assessing Officer as the assessee failed to furnish any substantive documents or evidence to support and substantiate his claims.
Aggrieved, the assessee has filed the present appeal before the Tribunal.
We have carefully considered the rival submissions and perused the material available on record. It is an undisputed fact that the Assessing Officer based his conclusions on certain discrepancies noticed in the ITR. However, the assessee failed to furnish the required documents or explanations either during the assessment proceedings or before the Ld. CIT(A).The Ld. Counsel for the assessee submitted that, if provided an opportunity, the assessee would furnish all requisite details and supporting evidence before the Revenue authorities. We also note that the assessee did not produce the necessary documents or explanations before the Asst. Year : 2020-21 - 4– lower authorities. Considering the facts of the case and in the interest of justice, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the Assessing Officer for proper verification and fresh adjudication. The assessee is directed to submit all relevant bank statements, documents, evidence, computation of income, and details of toll charges paid to RSRDC before the Assessing Officer. The assessee shall comply with the notices issued by the Assessing Officer without seeking unnecessary adjournments.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
The order is pronounced in the open Court on 27.11.2025.
/- Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 27.11.2025 MV आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy