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Income Tax Appellate Tribunal, “SMC” BENCH CUTTACK
Before: SHRI N.S.SAINI
This is an appeal filed by the assessee against the order of the CIT(A)-2, Bhubaneswar, dated 27.7.2017. 2. The sole grievance of the assessee in this appeal is that the CIT(A) is not justified in confirming the addition of Rs.6,15,957/- treating as income from unexplained sources.
Brief facts of the case are that the AO observed that there was cash deposit of Rs.20,27,910/- in the four bank account of the assessee as under :- Name of the Banks Amount UCO Bank 5,00,000/- AXIS Bank 6,71,000/- HDFC Bank 7,36,910/- Karnataka Bank 1,20,000/- Total 20,27,910/-
2 The assessee explained that it had received TA advance of Rs.5,47,000/- from M/s A.B. Mettalics Pvt. Ltd. and Rs.4,34,000/- from M/s A.B. Commercials aggregating to Rs.9,81,000/- in cash which was deposited in his bank account. The AO called for confirmation and details from the said two concerns of the assessee. M/s AB Mettalics Pvt. Ltd. could submit bills, vouchers tickets of air fare and train, hotel bills etc. of Rs.3,65,403/-. The AO, therefore, held that cash deposit of Rs.3,65,403/- was explained and added Rs.6,52,507/- as unexplained income of the assessee.
Before the CIT(A), the assessee submitted that the AO ignored the audit report of M/s AB Commercial submitted before him at the time of assessment, in which there are cash withdrawals of Rs.17,11,305/- from opening capital balance of Rs.34,47,831/-. The CIT(A) after considering the submissions of the assessee held that it was seen that out of TA advance of Rs.5,47,000/- claimed to have been received from AB Mettalics (P) Ltd., the assessee and the company could submit bills & vouchers of Rs.3,65,403/- only., The remaining amount remained with the assessee. Regarding TA advance of Rs.4,34,000/- claimed to have been drawn from M/s AB Commercial, no bills & vouchers regarding actual expenditure have been furnished either before the AO or before him. Therefore, he confirmed the addition of Rs.6,15,590/- (Rs.9,81,000 – Rs.3,65,403). Regarding balance cash deposit of Rs.10,46,910/- (Rs.20,27,910-Rs.9,81,000), there are sufficient cash withdrawals from M/s.AB Commercial. The opening balance in the partners capital account
3 is of Rs.34,47,831/-. The assessee has withdrawn Rs.17,11,305/- and the closing balance is of Rs.17,36,526/-. Therefore, cash deposit of Rs.10,46,910/- are explained. Therefore, he confirmed the addition of Rs.6,15,957/- and deleted the balance amount of Rs.10,46,910/-.
Being aggrieved against this order of CIT(A), the assessee is in appeal before the Tribunal.
The AR of the assessee submitted that it had filed certificates before the AO and the CIT(A) from AB Mettalics Pvt. Ltd. and M/s AB Commercial wherein it was confirmed that the assessee was given tour and travel expenses advance of Rs.5,47,000/- and Rs.4,34,000/-, respectively. The same was not considered while adjudicating the issue by the CIT(A) and in view of such evidence, the addition made was not justified.
On the other hand, the DR supported the order of CIT(A).
I have heard rival submissions, perused the orders of lower authorities and the materials available on record. In the instant case, it is not in dispute that the assessee has claimed that it has received tour and travel expenses advance of Rs.5,47,000/- from M/s AB Mettalics Pvt. Ltd. and Rs.4,34,000/- from M/s AB Commercial aggregating to Rs.9,81,000/-. The AO called for bills and vouchers of travel expenses. M/s AB Mettalics Pvt. Ltd. could produce bills and vouchers and tickets of air-fare and train tickets and hotel bills for Rs.3,65,403/- and M/s AB Commercial did not produce any bills, therefore, he accepted the amount of Rs.3,65,403/- as advance received by the assessee from M/s AB Mettalics Pvt. Ltd. and did
4 not accept the balance amount of advance of Rs.6,15,957/- and added the same to the income of the assessee. It is not dispute that the assessee filed confirmation from M/s AB Mettalics Pvt. Ltd. and from M/s AB Commercial to the effect that they have given to the assessee tour and travel advance expenses of Rs.5,47,000/- and Rs.4,34,000/-, respectively. In my considered view the advance given to the assessee is on an estimate basis for the expenses which the assessee may be required to incur. The estimate and the actual expenditure cannot be equal. Therefore, the CIT(A) was not justified in confirming the addition on the ground that the companies could produce bills for expenses of travelling to the extent of Rs.3,65,403/-. The AO after making enquiry has not found that the certificate issued to the assessee by M/s AB Mettalics Pvt. Ltd. and by M/s AB Commercial are not correct or false. Therefore, in my considered view, the addition of Rs.6,15,957/- made by the AO is unsustainable in law. I, therefore, set aside the order of CIT(A) and delete the addition of Rs.6,15,597/- and allow the grounds of appeal of the assessee.
In the result, appeal of the assessee is allowed. Order pronounced in the open court on this 29/12/2017. (N. S. SAINI) ऱेखा सदस्य / ACCOUNTANT MEMBER कटक Cuttack; ददनांक Dated 29/12/2017 प्र.कु.मम/PKM, Senior Private Secretary
5 आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to :
Subrat Kumar Satpathy At- Plot No.183/6, Gajapati Nagar, Near Press Chhak, Bhubaneswar, Dist- Khurda-751005 2. प्रत्यथी / The Respondent- ITO, Ward-3(5), Bhubaneswar 3. आयकर आयुक्त(अपील) / The CIT(A), आयकर आयुक्त / CIT 4. निभागीय प्रनतनिनर्, आयकर अपीलीय अनर्करण, कटक / DR, ITAT, Cuttack 5. गार्ड फाईऱ / Guard file. 6. आदेशािुसार/ BY ORDER, सत्यापपत प्रतत //// (Senior Private Secretary) आयकर अपीऱीय अधिकरण, कटक / ITAT, Cuttack