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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI
Before: SHRI SUDHANSHU SRIVASTAVA & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the order of the ld CIT(A)-31, New Delhi dated 31.03.2017 for the Assessment Year 2013-14. 2. The assessee has raised the following grounds of appeal:- “1. The learned Commissioner of Income-tax (Appeals) - 31, New Delhi, has erred law as well as in fact by enhancing the assessee’s income by an amount Rs.47,99,100/-.
2. The learned Commissioner of Income-tax (Appeals) - 31, New Delhi, has erred in law as well as in fact by not appreciating the fact that the expenditure was met through the banking channels and thus incorrectly relied upon the decision of the Hon'ble Bombay High court in the case of Mount Finance Ltd.
3. The learned Commissioner of Income-tax (Appeals) - 31, New Delhi, has erred in law as well as in fact by not appreciating the fact that the expenditure was met through the banking channels and thus incorrectly relied upon the decision of the Hon'ble Delhi High court in the case of Modi Stone Ltd.
4. The learned Commissioner of Income-tax (Appeals) - 31, New Delhi, has erred in law as well as in fact and failed to give any finding on the submission made by the 3. The brief facts of the case shows that the assessee filed its return of income on 29.09.2013 declaring taxable income of Rs. 75,88,02,240/-. The Page | 1 assessment u/s 143(3) was made at Rs. 76,31,80,250/-. The assessee preferred an appeal before the ld CIT(A) but in fact he enhanced the income of the assessee and dismissed the appeal. Therefore, the assessee is in appeal before us.
The assessee is engaged in the business of the wholesale distribution of country liquor and deriving its income from business and other sources.
Despite notice to the assessee none appeared, therefore, the issue is decided on the merits of the case as per information available on record.
The first ground of appeal
with respect to the enhancement of income by the ld CIT(A). The ld AO disallowed a sum of Rs. 30 lakhs under the head “truck running and maintenance expenditure” out of total expenditure of Rs. 6,64,94,362/- as the assessee did not furnish the details of large number of small expenses for which proper bills and vouchers before the ld AO and therefore, he made an estimated disallowance of Rs. 30 lakhs.
7. On appeal before the ld CIT(A) against the submission of the assessee, the remand report of the AO was sought for, in the remand report after detailed verification the ld AO held that the assessee did not have verifiable details of expenditure amounting to Rs. 77,99,100/-. Therefore, the ld CIT(A) issued notice for enhancement of income of Rs. 4799100/-. No explanation was given by the assessee before the ld CIT(A) and therefore, income was enhanced TO Rs. 47,99,100/-. This is challenged as per ground No. 1 to 4 of the appeal.
8. The ld DR referred to the order of the ld CIT(A) as well as the remand report incorporated by the ld CIT(A) in his order. The crux of the submission was that the ld AO has found the details of non verifiable expenditure for which assessee did not have any poof and such amount has been disallowed by the ld CIT(A). He, therefore, submitted that the above disallowance may be confirmed.
9. We have carefully considered the rival contentions. It is apparent that out of total expenditure of Rs. 6,64,94,362/- the ld AO made disallowance of Rs. 30 lakhs on ad hoc basis. Before the ld CIT(A) the matter was remanded to AO for verification of truck running and maintenance expenditure. In the remand proceedings the ld AO examined the complete details and found that sum of Rs. 77,99,100/- was not substantiate with corresponding proof