NARANBHAI RAMBHAI ZALA,RAJKOT vs. INCOME TAX OFFICER, WARD-1(2),, JUNAGADH

The assessee has raised the revised grounds of appeal: “1. The Ld. CIT(A) has erred in law as well as on facts in confirming an assessment order U/s. 144 of the act. The order deserves annulment.

The only interconnected issue raised by the assessee is that the Ld. CIT(A) erred in confirming the addition made by the AO for Rs. 9,73,562/- representing the expenditure incurred under the provision of Section 57 of the Act.

The facts in brief are that the assessee in the present case is an individual and filed his return of income declaring an income of Rs.

Aggrieved assessee carried the matter before the Ld. CIT(A) who confirmed the order of the AO by observing as under: “5.1 There cannot be any dispute that if any assessee has claimed deduction of any expenditure onus is squarely upon him to provide the details along with evidences in respect of such expenses. In present case no details were provided nor any evidences were submitted before the AO justifying claim of the appellant towards such expenses. Even before me no such details have been provided nor any evidence has been submitted. The only effective submission made before me is that entire income receipt cannot be taxed and deduction to the reasonable expenditure is to be allowed. It is apparent that assessee has preferred not to submit any details regarding such expenditure and is hoping for the best reasonable estimate of income which the assessing officer or the appellate authority or CIT(Appeals) can grant to him. Such course of action is very unfortunate. In present case the income is arising from other sources and not from the business activities. The indulgence in a systematic business activities will definitely lead to incurrence of certain expenditure and in absence of exact quantification of such expenses or reasonable estimates should be made of such expenditure and only the expected reasonable profit should be taxed out of the said business transaction.

Being aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us.

The Ld. AR before us filed a written submission running into 5 pages wherein it was contended that the gross amount cannot be made subject to tax without considering the corresponding expenses.

On the contrary, the Ld. DR vehemently supported the order of the authorities below.

We have heard the rival contentions of both the parties and perused the materials available on record. In the case on hand, the assessee has shown gross income from other sources amounting to Rs.11,33,515/- against which a deduction of Rs.9,73,562/- was claimed under Section 57 of the Act. But both the authorities below have disallowed the same i.e. deduction/expenses of Rs.9,73,562/- in the absence of necessary documentary evidence. Even at the time of hearing before us, the Ld. AR in the written submission has submitted that the gross amount of income cannot be taxed without allowing the corresponding expenses which were claimed in the return of income.

However, the onus lies upon the assessee to furnish the necessary documentary evidences in support of the claim made in the income tax return. If the assessee fails to discharge the onus, there is no remedy available to the revenue to disallow the claim of the assessee. Nevertheless, in the interest of justice and fair play we are inclined to give one more

In the result, the appeal filed by the assessee is allowed for the statistical purposes.