Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 689 - AT - Income TaxAddition on undisclosed purchases and profit thereon - Held that:- On examination of the details submitted by the assessee, we find that the goods were purchased on credit basis. As there is outstanding credit balance in the books of the assessee, in the name of MUS. Thus, it can be presumed that the goods were purchased on the basis of credit. However, the lower authorities have not brought anything on record about the sales made by the assessee of such undisclosed purchases In the absence of any information about the sales of undisclosed purchases, the entire amount of purchase cannot be treated as undisclosed profit of the assessee. Therefore, we are of the view that only profit element of ₹ 21,548/- can be brought to tax. We also find that there is no allegation from the order of the lower authorities that the undisclosed purchases were made on cash basis. Besides MUS has shown sales in its books of accounts on credit basis. Therefore, the question of making addition of investment in such undisclosed purchases does not arise. In view of the above, we restrict the disallowance to ₹ 21,548/-. Accordingly, AO is directed. Hence, this ground of appeal of the assessee is partly allowed. Disallowance of expenses on estimated basis - Held that:- AO should have verified the expenses at the time assessment rather disallowing the same on the basis of estimation. The AO should have pointed out defects in respect to the specific vouchers before making the disallowance. In our considered view the AO should not disallow the expenses based on some suspicion, doubt and should not draw unreasonable inferences based on some unreasonable apprehensions. The AO has not brought on record any cogent reasons as to why this expenditure was to be disallowed. It is not the case that the expense was considered to be bogus or short comings in the vouchers in this regard as observed by the Revenue. No material has been placed before us by the Revenue to controvert the arguments of the ld. AR. In that view of the matter we find ourselves in no agreement with the reasoning and conclusion contained in the order of ld. CIT(A). With the result we reverse the finding of ld. CIT(A) with regard to delivery expenses. Disallowance for Installation and teas & tiffin charges we find that the assessee has failed to provide the supporting evidence in respect to the aforesaid expenses. Therefore the AO had to resort for the purpose of disallowance on the basis of estimation. In our considered view it was the duty of the assessee to provide the necessary details as desired by the AO as the onus lies on the assessee. Even before us the learned AR has not produced any supporting evidence in support of his claim therefore the inclined not to interfere in the order of lower authorities. Hence this ground of appeal of the assessee is partly allowed.
|