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2022 (4) TMI 719 - AT - Income TaxAddition made towards sundry payments - document showing the sundry payment and expenditure retrieved from the computer system bear the system generated, time stamp of date of creation or modification or deletion of the document and these reveal that these documents have been created and accessed on different dates spread over several months and years - HELD THAT:- Incriminating material seized showing various sundry payments made out of cash which are not allowable as business expenditure. Being so the lower authorities disallowed the same. Before us the AR is unable to show how these payments are related to the business of the assessee. In our opinion unless these expenditure is wholly and exclusively incurred for the purpose of carrying on the business of the assessee, the expenditure cannot be allowed. Being so the lower authorities are justified in disallowing the expenditure. These grounds of appeal of the assessee is dismissed. With regard to the other arguments of the assessee that there no material to substantiate the claim of the assessee’s alleged sundry payments, the Managing Director of the assessee company Shri Naveen Shetty and also Shri Narayan Shetty confirmed the usage of BTW application by RSINL and its sister concern since 10 years. Regarding the books of accounts maintained and source of transactions pertaining to the company as per the BTW application files, Shri Naveen Shetty has stated in the statement that he did not remember and his replies remained evasive and non-committal. The digital evidences gathered through the search are systematic and comprehensive and the total record of actual transactions and the evidences retrieved from the server system were also supported by the hard copies of various documents and soft copies and computers seized from multiple locations. Further a perusal of the books of accounts contained in the BTW files reveal that the BTW files contain cash book and all ledgers including ledge under the head “Sundry” and it is complete with voucher number, date narration, amount and transaction type. The payments were reflected in cash book and the voucher number assigned to each sundry expense item suggest both chronological sequences and consistency of records relating to sundry payments and reflected in the books of account. Majority of such folders were also found to have been deleted from the hard disk. The sundry payments were forming part of books of accounts maintained in the names of RNS, NHL, MPC, NMCC or other entries in the cash book and in ledgers except those relating to sundry payments have been found to be reflected in the regular books of accounts prepared by assessee for statutory purposes. The digital evidences discussed above, has also been found from systems in Hubli office of RNSI as well as from systems in the site office of RNSI at Tarikere. There is also letter issued to RNSI vide circular dated 21.02.2012 directing the employees for prompt accounting of the sundry payments to various department on daily basis. Further the Vice President of RNSI, Shri Sunil Sahasrabudhey, also admitted these payments, though he retracted later- we are of the opinion that there is no error in the order of the lower authorities in disallowing the payment - Decided against assessee.
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