SINDHUJA HOSPITALS,TRICHY vs. ACIT CIRCLE 1, TRICHY

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ITA 2574/CHNY/2018Status: DisposedITAT Chennai31 January 2022AY 2014-153 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the salary folder, being part of the assessee's day-to-day records, should be accepted as true salary payments unless proven otherwise. The AO did not make efforts to confirm payments from payees.

What were the facts?

During a survey, the assessee's salary registers showed a lower expenditure than claimed in the return. The Assessing Officer (AO) added the difference to the assessee's income. The assessee presented a salary folder with a higher total payment, but the AO rejected it due to lack of signatures and impact on PF liability.

What were the issues?

Whether the salary payments as per the salary folder should be accepted as true, and if the AO's addition was justified based on the available evidence.

Which sections of the Income-tax Act were involved?

Section 133A,Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHENNAI

Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri N.Arjunraj (C.A)-Ld. AR, Shri P.Sajit Kumar (Addl.CIT)-Ld. DR
For Respondent: Shri P.Sajit Kumar (Addl.CIT)-Ld. DR

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aggrieved by confirmation of addition of Rs.40,57,451/-, the assessee is in further appeal before us. The impugned order has been passed by Ld. Commissioner of Income Tax-1, Tiruchirapalli [CIT(A)] on 25.07.2018 in the matter of assessment framed by Ld. Assessing Officer u/s 143(3) r.w.s. 147 on 30.12.2016. 2. Facts leading to addition are that during survey u/s 133A on 07.05.2014, salary acquittance registers as maintained by the assessee 2 - were verified. The assessee claimed salary expenses of Rs.166.65 Lacs in the return of income. However, as per register the total expenditure on salary worked out to be Rs.116.94 Lacs. Accordingly, Ld. AO proceeded to add the differential of Rs.49.70 Lacs to the income of the assessee. The assessee controverted the stand of Ld. AO by submitting that as per salary folder impounded during survey at serial no. 54, total salary payments work out to be Rs.157.52 Lacs and therefore the same was to be accepted. However, finding that the salary folder did not contain signatures of staff members and further, the said amount was not considered for the purpose of computing provident fund liability, Ld. AO rejected the plea of the assessee and added the differential to the income of the assessee. It could be seen that instead of adding Rs.49,70,294/-, Ld. AO has added only an amount of Rs.40,57,451/- while computing the income of the assessee. The stand of Ld. AO, upon confirmation by Ld. CIT(A), is in further challenge before us.

3.

Having considered material facts, it could be seen that aggregate salary as per document found by the survey team was Rs.157.52 Lacs. These registers were maintained by the assessee in normal course of business and were part of day-to-day records of the assessee. Therefore, unless contrary was shown, the content of these documents were to be accepted to be true. Further, no efforts have been made by Ld. AO to confirm the authenticity of these payments from payees. Therefore, the amount of Rs.1,57,52,306/- was to be accepted as true salary payment. Therefore, we direct Ld. AO to restrict the addition to the extent of Rs.9,12,843/- (Rs.1,66,65,149/- Less Rs.1,57,52,306/-). The balance addition stand deleted.

4.

The appeal stands partly allowed in terms of our above order.

Order pronounced on 31st January, 2022.

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