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Income Tax Appellate Tribunal, KOLKATA BENCH “D” KOLKATA
Before: Shri Waseem Ahmed & Shri S.S. Viswanethra Ravi
O R D E R
PER Waseem Ahmed, Accountant Member:
- This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-18, Kolkata dated 12.09.2016. Assessment was framed by DCIT, Circle-12 Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 25.03.2013 for assessment year 2009-10. Shri K.R. Vasudevan, Ld. Senior Counsel appeared on behalf of assessee and Shri Soumyajit Dasgupta, Ld. Departmental Representative appeared on behalf of Revenue.
The assessee has taken the following grounds of appeal:-
1. Addition of Rs.6,973,469/- towards unexplained expenditure (a) That on the facts of the case the Ld. CIT(Appeals) erred in appreciating the fact that the amount paid to American Express Bank (‘Amex’) during Financial Year 2008-09 (b) That on the facts of the Ld. CIT(Appeals)erred in confirming addition of an amount of Rs.6,973,469 to the total income as unexplained expenditure.
Linde India Ltd. Vs. DCIT, Cir-12 Kol. Page 2 (c) That on the facts and circumstances of the case the Ld. CIT(Appeals) erred in disregarding the judicial pronouncements submitted by the appellant during the course of hearing as per which additions merely on account of mismatches in the AIR statement were liable to be deleted.
2. Levy of interest under section 234C of the Act amounting to Rs.174,522 2.1 That on the fats and in the circumstances of the case, the Ld. CIT(Appeals) erred in considering the ground as infructuous even though no relief was given to the appellant. The appellant craves leave to add, alter, amend, amplify or modify any or all the of the above grounds of appeal
at or before the time of hearing of the appeal. The appellant submits that the above grounds are independent and without prejudice to one another.
3. First issue raised by assessee is as regards that Ld. CIT(A) erred in confirming the order of Assessing Officer by sustaining the disallowance of ₹6,973,469/- as unexplained expenditure.
4. Briefly stated facts are that assessee is a limited company and engaged in business of manufacturing and sale of various industrial and medical gases and cryogenic and non-cryogenic plant & vessels. The assessee in its books of account has shown payment of American Express Bank for credit card for ₹3,05,81,521/- only. However, AO in addition of AIR information observed that the payments have made for ₹3,75,54,990/-. Thus a discrepancy of ₹69,73,469/- was observed by AO which was not explained by assessee. Therefore, the same was added to the total income of assessee.
5. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that it has incurred an expense of ₹3,05,81,520/- only and therefore no addition on the basis of AIR can be made without bringing any additional evidence. The assessee in support of its claimed relied on the following case laws:- “i) M/s Kroner Investments Ltd. vs. DCIT [ITA No.5125/M/2013] ii) M/s ANS Law Associates vs. ACIT [ITA No.5181/M/2012](copy enclosed as Annexure 3) iii) A.F.Ferguson & Co. JCIT [ITA No.5037/M/2012] iv) DCIT Vs. Reliance Broadcast Network Ltd. [ITA No.3531/M/2013] v) DCIT vs. Shri G. Selva Kumar [ITA No.868/Bang/2009] vi) Mrs. Arati Raman vs. DCIT [ITA No.245/Bang/2012] Linde India Ltd. Vs. DCIT, Cir-12 Kol. Page 3 However, Ld. CIT(A) disregarded the contention of assessee and confirmed the order of AO by observing as under:- “I have carefully considered the facts of the case and the submissions of the assessee. During appeal proceedings the AR was asked whether appellant had made any efforts in getting the information from American Express Bank regarding the expenditure reported by them, which was reflected in the AIR information. However, the AR explained that the appellant has not made any effort to get any clarification from the American Express Bank but insisted that it was the responsibility of thee tax authorities to get additional evidences in support of the AIR information. In this regard I would like to add that things would have been simpler if the assessee had made little inquiry from American Express Bank. Being a valuable customer an otherwise also, bank would not have denied a clarification in this regard. Data in AIR information is furnished by the respective Banks. More often, mistake is on the part of the source which leads to such discrepancies. Hence, assessee’s insistence that only tax authorities should be making efforts is not justifiable. Now coming to the case laws relied on the appellant, it I seen that these case laws are regarding under reporting of income. assessee’s case is regarding expenditure from unexplained sources. Hence, the facts of assessee’s case are different. As assessee has failed to provide any explanation for excess expenditure of Rs.69,73,470/-, which was reported by American Express Bank, this expenditure is held to be from unexplained expenditure. Hence, addition of Rs.69,73,474/- is confirmed.” Being aggrieved by this order of Ld. CIT(A) assessee came in second appeal before us.
Ld. AR for the assessee before us filed paper book which is running pages from 1 to 158 and submitted that all the expenditures incurred through American Express Bank credit cards were duly accounted for in the books of account. Ld. AR in support of assessee’s claim drew our attention on the details of the expenses incurred through credit card which is placed on page 19 of the paper book. On the other hand, Ld. DR submitted that it was the duty of assessee to reconcile the difference as observed by AO between expenditure claimed by assessee vis-à-vis expenditure reported in AIR. He also submitted that cited case laws relied upon by Ld. AR are not applicable to the facts of the case on hand. Ld. DR further submitted that the matter can be restored back to the file of AO for the purpose of reconciliation.
We have heard the rival contentions of both the parties and perused and carefully considered the material on record; including the judicial pronouncements cited and placed reliance upon. In the instant case relates the disallowance made by AO on account of mismatch observed between the expenditure claimed by assessee