ACIT Vs Sheel Engineers (ITAT Surat)
ITAT Surat held that bill and vouchers of the expenditure claimed by the assessee was loss on account of floods. The explanation of expenses by way of copy of accounts, names and addresses, details TDS deducted and payments by crossed account payee cheques acceptable.
Facts- During the assessment proceedings, the assessee was asked to furnish the bills and vouchers of expenses debited to Profit and Loss account. However, no such bills and voucher were produced by the assessee. Further during the course of revision proceedings u/s 263 of the Act, the assessee has not submitted the bills of labour charges, carting charges, repair and maintenance, hire charges, for verification.
Therefore, during the assessment proceedings, the assessee was asked to explain as to why the above, expenses for which no bills were provided during 263 proceedings and also not provided before assessment proceedings, should not be disallowed.
AO held that assessee did not prove the claim of above expenses with primary documentary evidences, such as bills and vouchers, thus, the expenses claimed of Rs.3,48,20,237/- were disallowed.
Conclusion- Once the assessee has put forth its explanation of expenses by way of copy of accounts, names and addresses, details TDS deducted and payments by crossed account payee cheques, it was incumbent upon the assessing officer to proceed for controverting this contention of the assessee. However, the assessing officer got stuck on the issue of bills and vouchers not produced despite the assessee’s apparently genuine claim of loss of such documents in the floods. After considering these facts, the ld CIT(A) observed that the percentage of expenses under head labour charges, carting charges, repairs and maintenance and hire charges on the total turnover do not show any major deviations when compared with the same percentage of expenses to total turnover for immediately preceding years and the payments were made through crossed account payee cheques, TDS made wherever applicable, therefore, we do not find any infirmity in the conclusion reached by ld CIT(A). That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid addition. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed.
FULL TEXT OF THE ORDER OF ITAT SURAT
Captioned appeal filed by the Revenue, pertaining to Assessment Year (AY) 2012-13, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Valsad [in short “the ld.CIT(A)”], in Appeal No. CIT(A)/VLS/704/17-18/1067, dated 28.09.2018, which in turn arises out of an order passed by the assessing officer, under section 143(3) r.w.s. 263 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 29.12.2017.
2. The grounds of appeal raised by the Revenue are as follows:
“i) Whether on the fact and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.3,48,20,237/- by ignoring the facts narrated by this office in order u/s 263 of the IT Act and assessing officer in assessment order under question.
ii) Whether on the fact and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.3,48,20,237/- without remanding back the issue to the assessing officer, if he wants further verification on the above matter.
iii) Whether on the fact and circumstances of the case and in law, the Ld. CIT(A) has erred in law by accepting the assessee’s claim regarding destruction of bills and vouchers of various expenses in the July 2016 flood by without considering the facts that the bills and vouchers for F.Y. 2013-14 and F.Y. 2014-15 were produced by the assessee during the assessments proceedings for A.Y. 2014-15 and A.Y. 2015-16 respectively, if bill and vouchers for F.Y. 201314 and F.Y. 2014-15 would also have been damaged during the flood but the bill and vouchers only for F.Y. 2011-12 were destroyed.
iv) Whether on the fact and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee without considering the facts that the assessee did not prove the claim of expenses of Rs.3,48,20,237/- with documentary evidences such as bills and vouchers. The onus is on the assessee to prove the genuineness of the expenses claimed with supply evidences such as bills and vouchers etc. and it can’t shift its onus on the assessing officer by asking to verify the same from the parties concerned.
v) It is prayed to quash the order of the Ld.CIT(A) and restore the order of the assessing officer.
vi) The revenue reserves the right to add/alter/withdraw/modify any ground at the time of regular hearing.”
3. Brief facts of the issue in dispute are stated as under. During the assessment proceedings, the assessee was asked to furnish the bills and vouchers of expenses debited to Profit and Loss account. However, no such bills and voucher were produced by the assessee. Further during the course of revision proceedings u/s 263 of the Act, the assessee has not submitted the following bills for verification.
