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Facts
A search was conducted on the assessee's premises on 11.04.2012. Due to the director's judicial custody, the assessee could not fully respond to notices. The CIT(A) reduced some additions based on a remand report, but upheld additions related to bogus expenditure for AY 2011-12 and AY 2012-13.
Held
The Tribunal noted that the disclosure statement was signed by the director and chartered accountant after the search, negating the assessee's claim of not being aware of it. The Tribunal found no reason to interfere with the CIT(A)'s order as the assessee failed to explain the expenditure in its entirety.
Key Issues
Whether the additions made on account of unexplained expenditure are justified when the assessee claims the disclosure statement was not provided at the time of recording.
Sections Cited
IT Act
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
आदेश / O R D E R Per Bench : These are appeals filed by the assessee against the orders of the Ld.CIT(Appeals)-2, Bhubaneswar both dated 22/03//2023 passed in Appeal Nos. Bhubaneswar-2/10188/2017-18 and Bhubaneswar- 2/10189/2017-18 for the assessment year 2011-2012 and 2012-2013. 2. It was submitted by the ld. AR that there was a search in the premises of the assessee on 11.04.2012. It was the submission that as the director of the assessee company was under judicial custody, the assessee could not respond to the various notices issued and, consequently, all details could not be furnished. It was the submission that in the appeal before the ld.CIT(A), details have been produced. It was the submission that the remand report had also been called for by the ld. CIT(A) and after considering the remand report, substantial portion of the addition had been deleted. In respect of one particular addition, being bogus expenditure, the ld.CIT(A) had reduced the addition and had not deleted the entire addition. It was the submission that in respect of the issue of bogus expenditure, the AO had disallowed 10% of the entire expenditure for both the assessment years under appeal. The details had been produced before the AO in the remand proceedings. It was the submission that, in page 7 of the order of the ld. CIT(A) for the assessment year 2011-2012 and for the assessment year 2012-2013, the ld.CIT(A) had considered the remand report wherein the AO had specifically mentioned that he had examined the books of accounts with supporting bills and vouchers and had found that for the assessment year 2011-2012 there was a difference of Rs.45 lakhs and for the assessment year 2012-2013 there was a difference of Rs.50 lakhs. It was the submission that the AO had made this observation on the basis of a disclosure statement filed in the course of search, which is as follows :-
It was the submission that the said disclosure statement had been provided to the assessee only at the Tribunal level and not when the statement was recorded. It was the submission that it is an admitted fact that the assessee has filed all the evidences before the AO and ld.CIT(A)
even in the remand proceedings also. It was the submission that the addition as confirmed by the ld. CIT(A) for Rs.45 lakhs for A.Y.2011-2012 and Rs.50 lakhs for A.Y.2012-2013 may be deleted.
In reply, ld.SR. DR vehemently supported the orders of the AO and ld. CIT(A). It was the submission that the ld.CIT(A) had already granted relief to the assessee and the assessee has not been able to prove the expenditure of Rs.45 lakhs for the assessment year 2011-2012 and Rs.50 lakhs for A.Y.2012-2013. It was the prayer that the addition made by the AO and confirmed by the ld. CIT(A) for both the years under consideration should be upheld.
We have considered the rival submissions. A perusal of the disclosure statement clearly shows that such statement has been signed by the director of the assessee group as also the chartered accountant. This has been done on 18.07.2012. The search admittedly has been conducted on 11.04.2012. This disclosure has been given much after the search. This being so, it no more lies in the mouth of the assessee to say that such disclosure statement was not known to the assessee. A perusal of the disclosure of the statement clearly shows that for the two assessment years in the case of the assessee categorical disclosures have been made. A perusal of the statement recorded from Shri Sagar Kumar Ray, one of the directors of the assessee company, also clearly shows that he has categorically given a statement in reply to question No.14 that he has disclosed Rs.45 lakhs for the financial year 2010-2011