Case Law Details
Sercon India Pvt. Ltd. Vs ITO (ITAT Delhi)
ITAT Delhi held that the assessee failed to produce books of account before AO as well as before CIT(A). Books were produced before Tribunal. Accordingly, matter restored back to AO with direction to consider the documents produced and adjudicate the issue accordingly.
Facts- The assessee company is engaged in the business of providing services in the field of advertisement, publicity, promotion, event management, marketing consultancy, etc. During the assessment proceedings, it was observed by AO that the assessee has shown gross receipts/sales at Rs. 22,10,98,000/- against which, it has claimed operating and administrative expenses of Rs. 13,07,57,000/-. To verify the genuineness of these expenses, AO asked the assessee to produce the complete set of books of account along with bills and vouchers. However, despite of giving several opportunities, assessee could file ledger accounts only of various expenses in soft copy.
Since the AO could not examine the nature and reasonableness and allowability of the said expenses in absence of books of account and supporting documents, he, therefore, to plug the leakage or any gap of such expenditure and to protect the interest of revenue, disallowed the 10% of operating and administrative expenses of Rs. 13,07,57,000/- which amounted to Rs. 1,30,75,700/- and added back to the income of the assessee. Similarly, the interest expenses of Rs. 3,27,000/- and miscellaneous expenses of Rs. 4,00,000/- were also disallowed by him in absence of any reply/details from assessee. The interest on TDS amounting to Rs. 13,000/- claimed as business expenditure was also not allowed by him on the ground that the same in not an allowable expenditure. The provisions of trade payables amounting to Rs. 3,56,711/- was further disallowed by him in absence of any explanation on the part of assessee.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed by the assessee.
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