KUMAR LAKSHMAN CHINTLAPUDI,MUMBAI vs. ITO 19(1)(1), MUMBAI

सुनवाई क" तार"ख /Date of Hearing : 20-10-2016 घोषणा क" तार"ख /Date of Pronouncement : 07-12-2016 आदेश / O R D E R

PER RAMIT KOCHAR, Accountant Member

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raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under:-

1. The Ld. CIT(Al erred in confirming addition to total income of a sum of Rs.11,798/- on account of sale bill which was not realized.

2. The Ld. CIT(Al erred In confirming the addition of a sum of Rs.69,713 / - out of expenses for want of justification.

3. The Ld.CIT (Al erred in confirming addition of a sum of Rs. 8000/- on account of excess rent paid.

4. The Ld.CIT (Al erred in confirming adding to total income a sum of Rs.50,000/ - which is shown as sundry deposits in the Balance Sheet."

3 ITA 2074/Mum/2014 On appeal being filed by the assessee with the learned CIT(A), the Id. CIT(A) confirmed the additions as no evidence was submitted during the appellate proceedings before learned CIT(A) also, vide appellate order dated 30-01-2014 passed by learned CIT(A).

Aggrieved by the appellate order dated 30-01-2014 passed by the Id. CIT(A) , the assessee filed second appeal before the Tribunal.

Before the Tribunal also neither any satisfactory explanation nor any evidence could be offered by the assessee. The only submission was made by the learned counsel for the assessee that there was dispute with the party and the bill was cancelled. The Id. D.R. on the other hand relied on the orders of authorities below.

We have considered the rival contentions and also perused the 'material available on record. We have observed that the assessee has earned contractual receipts of Rs. 11,798/ - from Kaapi Machines (India) Pvt. Ltd. who deducted tax at source on this amount of Rs.11, 798/ - which was reflected in ITS details. The said receipts had not been disclosed as income by the assessee in the return of income filed with the Revenue. The assessee has taken a plea that the assessee cancelled the bill due to dispute with the party but the party deducted tax at source which is reflected in form no 26AS. No evidence has been submitted by the assessee about the dispute with the client or cancellation of the bill. Since the assessee failed to discharge the onus cast on him with respect thereto, the assessee's contentions are rejected and order of the learned CIT(A) is confirmed. This disposes of the ground no. 1 raised by the assessee which stand dismissed. We order accordingly.

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On first appeal being filed by the assessee with the learned CIT(A) , the Id. CIT(A) also upheld the additions as made by the A.O. on the grounds that the assessee had failed to prove that the expenditure was incurred wholly and exclusively for the purposes of business and also the assessee could not produce complete details and bills/vouchers, vide appellate orders dated 30- 01-2014 passed by the learned CIT(A).

Aggrieved by the appellate orders dated 30-01-2014 passed by the Id. CIT(A) the assessee filed second appeal before the tribunal.

Before the tribunal, the Id. Counsel for the assessee submitted that addition of Rs. 69,713/ - has been made @ 25% of the total expenses of Rs. 2,78,851/- towards advertisement, business promotion, telephone & mobile expenses, conveyance and miscellaneous expenses while no deficiency was pointed out by the authorities below in the bills/vouchers submitted. The Id. D.R. on the other hand relied upon the orders of authorities below.

5 ITA 2074/Mum/2014 We have considered the rival contentions and also perused the material available on record. We have observed that the assessee has incurred total expenses of Rs. 2,78,851/- on account of advertisement, business promotion, telephone & mobile expenses, conveyance and miscellaneous expenses. The assessee could not produce proper and satisfactory evidence/explanations before the authorities below to prove that the expenses were incurred wholly and exclusively for the purposes of business. Ad-hoc addition has been made @ 25% of the total expenditure by the authorities below on the ground that personal usage cannot be ruled out. However, no deficiency has been pointed out by the A.O. which is specific to any bill/voucher submitted by the assessee, but keeping in view satisfactory details about expenditure being incurred wholly and exclusively for the purpose of business was not submitted by the assessee, personal usage with respect to these expenses being incurred for personal purposes instead of business purposes cannot be completely ruled out. In view of our above discussions and reasoning, in our considered view interest of justice will be best served if the disallowance of the afore-stated expenses is restricted to 10% of the total expenditure of Rs. 2,78,851/- which comes to Rs. 27,885/-, as against disallowance of Rs. 69,713/-made by the authorities below. Thus, ground no. 2 is disposed of being partly allowed as indicated above. We order accordingly.

raised by the assessee in memo of appeal filed with the tribunal, the A.O. observed that there was a discrepancy of Rs. 8000/- relating to the excess rent paid as per assessee's P& L A/ c of Global Tech Solutions vis-a-vis rent agreement, which was disallowed by the AO and consequently added by the A.O. to the income of the assessee. The A.O. asked for the explanation but the assessee offered no explanation and hence the amount was disallowed and added to the income

6. ITA 2074/Mum/2014 of the assessee, vide assessment order dated 13.12.2011 passed by the AO u/s 143(3) of the Act.

On appeal before the Id. CIT(A) filed by the assessee, the assessee submitted that there was an old agreement of rent while the landlord has not entered into new rent agreement after the rent was increased and the excess rent of Rs.8,000 / - was as per new rent agreed by the assessee with the landlord albeit there is no written rent agreement but the rent was paid by banking channel through account payee cheques. The Id. CIT(A) rejected contentions of the assessee in the absence of satisfactory explanation and evidences submitted by the assessee and accordingly the assessment order of the A.O. was confirmed by the learned CIT(A) vide appellate orders dated 30-01-2014 passed by learned CIT(A).

Aggrieved by the appellate order dated 30-01-2014 passed by the Id. CIT(A), the assessee filed second appeal before the Tribunal. Before the Tribunal, the Id. Counsel for the assessee submitted that the assessee has made payment of Rs. 8000/- towards rent which is an increased rent paid through banking channel through account payee cheque. It was submitted by learned counsel for the assessee that the rent agreement was old and the landlord had not bothered to make any formal agreement as per new rent agreed by the assessee with landlord, and there is excess payment of Rs. 8000/- towards rent. The payment was made through banking channel through account payee cheques. It was submitted by learned counsel for the assessee that no new agreement has been entered into with the landlord for revised rent. The Id. D.R. on the other hand relied on the orders of the authorities below and submitted that payment of Rs. 8000/- is not a genuine business expenditure and the A.O. has rightly disallowed the same.

7 ITA 2074/Mum/2014 We have considered the rival contentions and also perused the material available on record. We have observed that the assessee has entered into rent agreement with the landlord which is an old agreement and no revised agreement is entered into by the assessee with the landlord for increased rent, and the assessee is contending that the rent has been revised upward but there is no written rent agreement entered into with the landlord for increased rent. The assesee is contending that the assessee has paid excess payment of Rs. 8000 j - towards increased rent vide banking channel through account payee cheque although new rent agreement does not exists as the same was never executed with the landlord for increased rent. The assessee also failed to submit the details of the working of increased rent being excess payment of Rs.8,000 j - over and above the subsisting rent agreement which was stated to be an old agreement. In our considered view, this enhanced rent of Rs.8,000/- is not allowable in the absence of rent agreement or some other evidencej satisfactory explanation to corroborate and substantiate the increased rent. The assessee did not submit any details, explanation or evidence to substantiate its contentions about increased rent and this enhanced rent of Rs.8,000/- cannot be allowed as deduction while computing income of the assessee keeping in view facts and circumstances of the case, as the assessee is not able to discharge the onus cast on the assessee, and the addition made by the A.O. as confirmed by the Id. CIT(A) is hereby upheld/confirmed, as we do not find any infirmity in the order of learned CIT(Al which we affirm. This disposes of ground no. 3 raised by the assessee in the memo of appeal filed with the tribunal, which stood dismissed. We order accordingly.

7. Coming to the last grievance of the assessee raised vide ground no 4, the A.O. observed from the Balance Sheet of M/s Global Tech. Solutions and other Balance Sheet of Global Tech. Solutions that the assessee had shown sundry deposit of Rs. 25,000 j - each in both the balance sheets'. When asked 8 ITA 2074/Mum/2014 by the A.O., the assessee could not submit any satisfactory explanation regarding the source/evidence thereof these sundry deposits of Rs.50,000/-. The A.O. accordingly treated it as unexplained investment u/s 69 of the Act and added back the same to the income of the assessee, vide assessment order dated 13.12.2011 passed by the AO u/ s 143(3) of the Act.

Aggrieved by the assessment order dated 13.12.2011 passed by the A.O. u/s 143(3) of the Act, the assessee filed first appeal before the Id. CIT(A). The Id. CIT(A) confirmed the assessment order of the A.O. as the assessee could not submit evidence/ satisfactory explanation with respect thereof these two sundry deposits of Rs. 25,000/- each appearing in its Balance Sheets vide appellate orders dated 30-01-2014 passed by learned CIT(A).

Aggrieved by the appellate orders dated 30-01-2014 passed by the Id. CIT(A), the assessee filed second appeal before the tribunal.

Before the tribunal , the Id. Counsel for the assessee could not produce any evidence but merely stated that the payments have been made to the employees. The Id. Counsel also could not explain/produce the source of these deposits of Rs.50,000 / -. The learned DR relied upon the orders of the authorities below.

We have considered the rival contentions and also perused the material available on record. Since the assessee could not produce any evidence/ satisfactory explanations to explain these deposits appearing in its Balance Sheet, in our considered view, the decision of the Id. CIT(A) is quite justified and we uphold the same as we donot find any infirmity in the appellate order of learned CIT(A) which we affirm. This disposes of the ground no 4 raised by the assessee in the memo of appeal filed with the tribunal which stood dismissed. We order accordingly.

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