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2024 Supreme(Online)(ITAT) 1103
INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD BENCH)
Ms. Suchitra Kamble, J, Shri Narendra Prasad Sinha, ACJ
Aerotech Enterprise – Appellant
Versus
Income Tax Officer – Respondent
I.T.A. No. 457/Ahd/2023
For the Appellants/Petitioners: Shri S. N. Divetia, Shri Samir Vora
For the Respondents: Smt. Mamta Singh
Taxpayers must provide proper documentation to substantiate claims of expenses; lack of evidence leads to disallowance.
Headnote:(A) Income Tax Act, 1961 - Sections 68, 115BBE and 143(3) - Appeal filed against disallowance of transport expenses - Claim of large deductions supported by incomplete evidence led to confirmation of disallowances - The court emphasized the necessity of proper documentation to substantiate expense claims. (Paras 8-11)
(B) Evidence Evaluation - The court held that incomplete ledger submissions and lack of supporting invoices undermine claimed expenses’ authenticity, leading to an upholding of the Assessing Officer's findings.
Facts of the case:
The appeal concerns disallowed transport expenses totaling Rs. 36,33,945 due to insufficient supporting documentation, primarily bills and vouchers.
Findings of Court:
The court upheld the Cit(A) findings that significant expense claims were unsupported and unverified, confirming what it deemed accommodation entries.
Issues: The essential issue was the lack of adequate supporting documentation for claimed transport expenses and the credibility of presented evidence.
Ratio Decidendi: The court concluded that without reliable evidence, the appeals court must uphold lower findings regarding expense legitimacy and tax treatment.
Result: The appeal is dismissed.
| Table of Content |
|---|
| 1. introduction of facts regarding the case and appeal. (Para 1 , 2) |
| 2. issues raised by appellant concerning evidence for transport expenses. (Para 3 , 4 , 5 , 6 , 8) |
| 3. court's evaluation of evidence and its stance on the necessity of support documents. (Para 7 , 9 , 10 , 11) |
| 4. final decision on the appeal. (Para 12) |
ORDER
PER SHRI NARENDRA PRASAD SINHA, AM:
This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, (in short ‘the CIT(A)’), dated 05.04.2023 for the Assessment Year 2018-19.
2. The brief facts of the case are that the return of income for A.Y. 2018-19 was filed on 31.10.2018 declaring total income of Rs.16,84,211/-. The case was selected under CASS for complete scrutiny to verify “Low net profit shown by construction contractors and claim of large refund”. In the course of assessment, the AO found that the assessee had claimed huge expenses under purchases, job work payment and petrol expenses. Further, transport expenses @5% amounting to Rs.75,77,863/- was also claimed as deduction. The AO had called for the ledger account, bills & vouchers in order to verify the transport expenses. The assessee produced ledger account of only 3 parties to whom total payment of Rs.29,68,838/- was made. Thereafter, the AO required the assessee to produce ledger account copies and bills & vouchers in respect of expenditure of Rs.2 Lakhs or more, which also was not fully complied. The AO, therefore, disallowed the transport expenses of Rs.36,33,945/-, which was not supported by any bills & vouchers and in respect of which no evidence was produced before the AO. Accordingly, the assessment was completed u/s 143(3) of the Act on 22/03/2021.
3. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which has been decided vide the impugned order and the addition as made by the AO was confirmed.
4. Now, the assessee is in second appeal before us and has taken following grounds in this appeal:
“[1] The Ld. CIT(A) NFAC, Delhi was grievously erred in confirming the disallowance of transport expenses of Rs. 35,85,237/- out of total addition made by the Ld. A.O. of Rs.36,33,945 being not supported by any bill/voucher which is not correct.
The appellant submits that the appellant has submitted the reply on 20th March 2021 by furnishing the necessary attachment/vouchers.
[2] The Ld. CIT(A), NRAC, Delhi was grievously erred in passing an appellate order by confirming an addition of Rs. 35,85,237/- out of addition of Rs. 36,33,945/- made by the Ld. A.O. without considering the reply made by the appellant through online before 20th March 2021.
[3] The appellant therefore requests your goodself to kindly delete the addition made by the Ld. A. O. of Rs. 35,85,237/- looking to the merits of the case.
[4] The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.”
5. Shri S. N. Divatia, Ld. AR for the assessee submitted that the assessee had furnished certain additional evidences before the Ld. CIT(A), which was not properly examined by him. He explained that ledger account copy of all the parties, in respect of which disallowance of Rs.36,33,945/- was made by the AO, was produced before the Ld. CIT(A). After considering these ledger accounts, the Ld. CIT(A) had allowed relief of Rs.48,708/- only and confirmed the balance amount of Rs.35,85,237/-. He further submitted that the transportation invoices in respect of these parties was also produced which was not considered in right perspective. According to the Ld. Counsel, the transport expenditure as claimed by the assessee was not in respect of only transport material but they were composite bills in respect of purchase of materials and transport thereof. He further submitted that the books of accounts were not rejected by the AO before making the disallowance.
6. Per contra, Smt. Mamta Si
