BHAYANA INTERIORS & FURNISHERS PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI

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ITA 3206/DEL/2015Status: DisposedITAT Delhi03 February 2020AY 2007-084 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the addition of Rs 16,52,905/- as the assessee failed to provide cogent evidence for the sales difference, with parties denying sales returns. The disallowance of Rs 15,00,000/- was also confirmed as the assessee admitted it was not for the impugned assessment year.

What were the facts?

The assessee challenged additions made to its income, including Rs 16,52,905/- for unexplained sales differences and Rs 15,00,000/- for disallowed foreign travelling expenses. The sales difference arose because parties denied sales returns, and the travelling expenses were admitted by the assessee as not pertaining to the assessment year.

What were the issues?

Whether the addition for unexplained sales difference is justified, and whether the disallowance of travelling expenses is correct when admitted as not pertaining to the assessment year.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI

Before: SH.SUDHANSHU SRIVASTAVA & SH. PRASHANT MAHARISHI

Hearing: 07/11/2019Pronounced: 03/02/2020

PER PRASHANT MAHARISHI, AM:

1.

This appeal is filed by the assessee against the order of the ld CIT(A)-14, New Delhi dated 13.03.2015 for Assessment Year 2007-08 raising effectively Ground Nos. 2 and 3 of the appeal as under:- “2. The Learned Commissioner of Income Tax (Appeals)-XIV has wrongly, arbitrarily and without appreciating the facts of the case, confirmed addition of Rs 16,52,905/-to the income of the assessee Company amount short received from parties relating to sales, even though all the necessary ledger accounts with confirmations have been filed during the course of fr assessment proceedings. 3. The Learned Commissioner of Income Tax (Appeals)-XIV has wrongly, arbitrarily and without appreciating the facts of the case, confirmed the disallowance of Rs 15,00,000/- out of foreign gravelling on the ground that the same has not been incurred for the purpose of the business of the assessee Company.”

2.

Brief facts of the case shows that assessee filed its return of income on 31.10.2007 declaring income of Rs. 1,78,961/-. The assessment u/s 143(3)

of the Income Tax Act, 1961 was completed on 07/12/2009 at Rs. 1,98,699/-. The ld CIT(A) passed an order u/s 263 of the Act on 27.03.2012, pursuant to that the assessment u/s 143(3) read with section 263 was passed on 26.03.2012 at Rs. 65,28,297/-. The assessee challenged the same before the ld CIT(A) who dismissed the appeal of the assessee. The ld CIT(A) confirmed the addition of Rs. 1652905/- on account of difference in the sale proceeds in painting. He also confirmed the disallowance out of traveling expenditure amounting to Rs. 15 lakhs which is pending to Assessment Year 2008-09. Against these two additions the appeal of the assessee is filed. The ground No. 2 is of addition of Rs. 16,52,905/-. The assessee has shown sales of Rs. 16032453/- in profit and loss account however, the details filed during the course of assessment proceedings it was found that assessee has sold paintings of Rs. 1,76,85,000/-. The assessee was asked to explain the same. The assessee tried to explain and submit the difference is on account of sales return. He also filed the confirmation with respect to three parties. The ld AO issued noticed u/s 133(6) out of these three parties, two parties denied to have made any sales return to the assessee. The third party could not be served such notice. Therefore, the ld AO issued further notice to the assessee to show cause why the above addition should not be made to the income of the assessee. To this the assessee did not reply. In view of this the ld AO made the addition. Before the ld CIT(A) the above addition was confirmed. Therefore, the assessee has challenged it vide ground No. 2.

3.

The second addition challenged is the addition of Rs. 15 lakhs out of travelling expenditure. The assessee has claimed Rs. 3998135/- on account of various travelling expenditure during the 143(3) assessment itself the assessee admitted that Rs. 15 lakhs was paid to Uniglobe Mode Tours and Travels which did not pertain to the impugned assessment year. The assessee surrendered the above disallowance before the ld AO vide letter dated 09.02.2013 and therefore, same was disallowed. Before the ld CIT(A) assessee challenged the same and he confirmed it.

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