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Income Tax Appellate Tribunal, I Bench, Mumbai
Before: Shri P K Bansal & Shri Pawan Singh
Per P.K. Bansal, Vice President
This appeal has been filed by the assessee against the order of the CIT(A)-44, Mumbai dated 14.02.2017 for A.Y. 2011-12 by taking the following effective ground of appeal: -
1) The Ld. C.I.T. (Appeal) erred in confirming ads of Rs.14,04,320/- as Unproved expenses and Rs.1,00,000/- as Unexplained brokerage expenses as per the Income Tax Act, 1961.
2. The brief facts of the case are that the AO noted that the assessee while calculating the profit on sale of property shown cost of constructions excluding cost of land at `58,32,742/-. The AO found that the assessee claimed painting work charges, electrical & fixtures, other purchases and wages paid totalling to `14,04,320/-. The AO was of the view that when the assessee has already incurred expenses for getting the major contract work through M/s. United Construction Company and Narayan Contractor who whom a sums of `25,34,542/- and `11,45,680/- respectively paid there is no reason for incurring these additional expenses and therefore he added
Mr. Sohil Solanki the same as unproved expenses. When the matter went before the CIT(A), the CIT(A) confirmed the said addition. Aggrieved, assessee is in appeal before us.
After hearing the rival submissions and going through the orders of the tax authorities below we noted that the assessee has submitted bills and vouchers related to the expenses disallowed by the AO as appearing from para 3.2 of the order the CIT(A). The CIT(A) did not consider these evidences as in his opinion no additional evidence could have been filed by the assessee before him unless the assessee is covered by exceptions provided in rule 46A. We noted that the said disallowance have been made by the AO merely on the basis that since the assessee has given the construction work on contract and the major contract work has been carried out by contractor M/s. United Construction Co. and Narayan Contractor to whom assessee has made separate payments, the assessee need not to incur additional expenses. In our view the disallowance was made by the AO merely on presumptions without bringing any evidence on record. Even the CIT(A) did not took the details of such expenses on record while the details of such expenses, in our view was necessary to adjudicate this issue and the AO has never asked the assessee for submission of evidences. We, therefore, delete the said disallowance.
The second issue relates to brokerage expenses paid amount to `1,00,000/-. After hearing the rival submissions and going through the orders of the tax authorities below we noted that the AO disallowed the said expenditure as the assessee could not file any details of such expenses. When the matter went before he CIT(A), the CIT(A) has not separately dealt with this issue and confirmed the order of the AO. We, therefore, in the interest of justice and fair play to both the parties set aside this issue to the file of the AO with the direction that the AO shall redecide this issue afresh after giving opportunity to the assessee to produce necessary evidences and details of proof in respect of these expenses. Thus this, ground is allowed for statistical purposes.
Mr. Sohil Solanki 5. In the result, the appeal filed by the assessee is allowed for statistical purposes.