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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI H. S. SIDHU
This appeal is filed by assessee against the Order dated 25.5.2016 passed by the Ld. CIT(A), Muzaffarnagar relating to Assessment Year 2012-13.
The grounds raised by the assessee in the appeal read as under:-
That assessment order passed u/s 143(3) by the Assessing officer is illegal, bad in law and without jurisdiction and the CIT(A) has also erred in upholding the same.
2. The addition/disallowances made by the assessing officer are illegal, unjust, highly excessive and are not based on any material on record by the assessing officer. The total income of the assessee appellant has been wrongly and illegally computed by the assessing officer on at Rs.43,15,620.00 as against declared income of Rs.30,13,232.00.
3. That, the Assessing Officer has erred in making the addition ofRs.12,390.00 to the Income of the assessee on account of difference in closing balance, which is highly arbitrary, unjustified and against facts of the case. The CIT (A) has erred in upholding the same.
4. The Assessing Officer has erred in making the additional disallowance of Rs.2,10,000.00 on account of Various Expenses debited to Profit & Loss Account to the income of the assessee company without appreciating the fact. The CIT (A) has erred in upholding the same.
The additions made and the observations made are unjust, unlawful and based on mere surmises and conjunctures. The additions made cannot be justified by any material on record.
6. That the explanation given evidence produced, material placed and available on record has not been properly considered and judicially interpreted and the same do not justify the additions/ allowances made.
7. That the impugned Assessment Order passed by the Assessing Officer and order passed by CIT(A) are against the principles of natural justice
and the same has been passed without affording reasonable and adequate opportunity of being heard.
8. That the interest u/s 234B & 234C has been wrongly and illegally charged as the appellant could not have foreseen the disallowances/additions made and could not have included the same in current income for payment of Advance tax. The interest charged under various sections is also wrongly worked out.
The appellant craves leave to add, amend, alter and or modify the grounds of appeal of the said appeal.
All of the above grounds of appeal are without prejudice and are mutually exclusive to each other.”
The brief facts of the case are that e-Return of income was filed on 21.9.2012 depicting total income of Rs.30,13,230/- as per normal provisions of the I.T. Act, 1961. However higher tax was paid u/s. 115JB at Book Profit of Rs. 51,73,330/-. The return was processed u/s. 143(1) of the Act on 29.3.2014. The case was selected for scrutiny under CASS and an initial statutory notice u/s. 143(2) of the I.T. Act was issued on 6.8.2012. In response to statutory notices, the AR of the assessee appeared from time to time and filed the details. During the year under consideration, the assessee company remained engaged in the business of ‘Manufacturing & Trading activities of Kraft (Packing) Paper and Media paper’ as depicted in the computation of income also. The AO observe that during the course of assessment proceedings, notices u/s. 133(6), inter alia, has been issued to M/s Abhinandan Pershad & Bros. On examination of the copy of account as obtained from the said concern, difference of Rs. 12,390/- in the closing balance was notice. Vide order sheet entry dated 4.3.2015, the said difference in closing balances has been confronted to the AR of the assessee and a copy of the said obtained account has also been given to him.
In response to the same, in rely dated 5.3.2015 of the assessee, it is merely submitted that the said difference is petty one, may be due to oversight clerical mistake. Since, the difference is remained to reconciled, the said difference amount of Rs. 12,390/- was brought to tax. Further, on account of various expenses debited to the profit and loss account, the AO had made addition of Rs. 2,10,000/- on account of various expenses being unverifiable. The assessee has submitted that it has maintained proper audited books of account supported by bills/ vouchers and the AO has made the disallowance on surmises and conjectures without finding any specific defect. However, on going through the assessment order the AO has noted that the supporting bills / vouchers produced by the assessee before the AO were defective, hence, addition was made by assessing the income at Rs. 43,15,620/- and tax on income as per normal provisions of the Act is higher than that of income u/s. 115JB of the Act. Accordingly, tax is chargeable on income of Rs. 43,15,620/- vide order dated 23.3.2015 passed u/s. 143(3) of the Act.
Against the assessment order dated 23.3.2015, the assessee appealed before the Ld. CIT(A), who vide his impugned order dated 25.5.2016 has partly allowed the appeal of the assessee and confirmed the addition of Rs. 12,390/- on account of difference in closing balance and Rs. 2,10,000/- on account of various expenses debited to the profit and loss account. Aggrieved with the impugned order the Assessee is in appeal before the Tribunal.
5. Ld. Counsel of the assessee stated that lower authorities have wrongly made the additions of Rs. 12,390/- on account of difference in closing balance and Rs. 2,10,000/- on account of various expense debited to profit and loss account of the income of the assessee company without appreciating the fact and based on mere surmises and conjectures, which are not tenable in the eyes of law and needs to be deleted.
On the contrary, Ld. DR heavily relied upon the orders of the revenue authorities and stated that both the lower authorities have passed a well reasoned order, which does not need any interference. Hence, the appeal of the assessee may be dismissed.
I have heard the rival contentions and considered the written submissions filed by both the parties and the orders of the authorities below.
7.1 I find that in this case the AO had made addition of Rs.12,390/- on account of non-re-concilation of closing balance of M/s Abhinand Prasad & Brothers and during the appellate proceedings, the reply of the assesse has been vague and non- specific. It was noted that the assesse could not reconcile the closing balance as per books of account and as intimated uls 133(6) by the above entity, accordingly addition of Rs.12,390/- was rightly confirmed by the Ld. CIT(A), which does not need any interference on my part, hence, I uphold the finding of the Ld. CIT(A) on the issue in dispute and reject the ground raised by the Revenue.
7.2 I further find that against the disallowance of Rs. 2,10,000/- on account of various expenses debited to the profit & loss account, the AO had made addition of Rs. 2,10,000/- on account of various expenses being unverifiable and the bills produced before the AO were defective. It was noted that AO has made the addition by following the decision of the ITAT in assessee’s own case for AY 2009-10, hence, Ld. CIT(A) rightly confirmed the addition of Rs.2,10,0000/-, which does not need any interference on my part, hence, I uphold the finding of the Ld. CIT(A) on the issue in dispute and reject the ground raised by the Revenue.
In the result, the Appeal filed by the assessee stands dismissed.
Order pronounced on 04/05/2018.