TMI Blog2012 (7) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... - Decided in favor of Revenue - ITA No. 386/Agra/2011 - - - Dated:- 31-5-2012 - SHRI BHAVNESH SAINI, SHRI A.L. GEHLOT, JJ. Appellant by : Shri Pradeep Singh Gautam, Jr. D.R. Respondent by : Shri S.K. Lulla, C.A. ORDER Per Bhavnesh Saini, J.M.: This appeal by the Revenue is directed against the order of the ld. CIT(A), Gwalior dated 13.07.2011 for the assessment year 2007-08, challenging the order of the ld. CIT(A) in deleting the disallowance of expenses to the extent of Rs.24,19,888/- in the absence of bills and vouchers in respect of the expenses. 2. Briefly, the facts of the case are that the return of income was filed by the assessee society showing income of Rs.36,078/-. The return was selected for scrutiny and in response to the statutory notice served upon the assessee, Smt. Madhuri Sharma, Secretary of the society attended the proceedings before the AO and sought adjournment because the authorized representative was out of station. The Secretary of the Society was asked to produce books of account and relevant documents before the AO and was also asked to explain why the receipts shown in the income expenditure account be not treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income and Rs.25,55,966/- was added treating the same as income from other sources and no expenses were allowed in the absence of any vouchers or any evidence furnished in this regard. The AO also noted that since the donations / contribution / receipts were also not subjected to verification in the absence of details, therefore, the income was so computed as above. 2.1 The assessment order was challenged before the ld. CIT(A) and it was submitted that during the survey and at the time of assessment, audited the income and expenditure and balance sheet was with the department and it would mean that the books of account and vouchers were made for audit job with the C.A. who was out of station at the time of survey. Therefore, the expenses should be allowed. The assessee also claimed that since it was an Educational Institution, therefore, exemption u/s. 10(23C)(iiiad) may be allowed because its receipts are below Rs.1.00 crore. The assessee also submitted copy of the Societies Registration Certificate and bills and vouchers and requested for admission of additional evidences u/r. 46A. The same were sent to the AO for filing the remand report and the AO in the remand report d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material is available on record to given such benefit to the assessee. Therefore, such ground was rejected. There is no cross appeal or cross objection by the assessee against these findings of the ld. CIT(A) and not agitated before us. Therefore, the order of ld. CIT(A) to that extent denied exemption u/s. 10(23C) has become final. 3. The ld. DR relied upon the order of the AO and submitted that no compliance was made before the AO and even the ld. CIT(A) accepted that no regular books of account have been maintained and no complete vouchers were produced before the AO even in the remand proceedings. Therefore, the ld. CIT(A) was not justified in deleting the substantial addition. He has submitted that the ld. CIT(A) has not recorded anything in the appellate order as to how the additional evidence have been admitted u/r. 46A. Therefore, whole of the order of the ld. CIT(A) is unjustified in deleting the addition. 4. On the other hand, the ld. counsel for the assessee reiterated the submissions made before the ld. CIT(A) and submitted that evidences were produced before the ld. CIT(A), on which remand report was called for. Therefore, ld. CIT(A) on examination of the evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 251 or the imposition of penalty under section 271. 5.1 It is clear from the above rule that the assessee shall not be entitled to produce additional evidence before the ld. CIT(A) unless the circumstances mentioned above have been satisfied by the assessee and further the ld. CIT(A) shall have to record in writing the reasons of admission of additional evidence. The order of the ld. CIT(A) is silent with regard to the reasons on which the assessee was prevented by sufficient cause from producing the evidences before the AO and no order in writing has also been passed by the ld. CIT(A) for admission of the additional evidence. The ld. counsel for the assessee has also failed to produce copy of the additional evidence before us, which were filed before the ld. CIT(A) for our perusal and appreciation. It, therefore, appears apparently that the ld. CIT(A) violated Rule 46A in the matter. 5.2 Further it is not in dispute that the assessee did not produce any vouchers of expenses before the AO at the assessment stage. During the course of survey, no regular books of account were found to have been maintained because the impounded cash book was written only from pages 1 to 12 in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rden is always upon the assessee to prove that expenditure incurred are not in the nature of capital expenditure and have been laid out or expanded by the assessee wholly or exclusively for the purpose of business or profession. The AO in the remand report specifically noted that the assessee produced certain bills and vouchers for the first time at the remand proceedings for verification and out of such expenses, some vouchers were found self made without supporting bills and were found unsigned. The assessee in reply to the remand report admitted that the photocopy of 10% of the vouchers along with supporting evidences were produced at the remand proceedings. It would mean that no complete bills and vouchers for expenses were produced before the AO even at the remand proceedings. Therefore, there was no reason for the ld. CIT(A) to have recorded a finding of fact that the assessee produced day-to-day cash book, ledger along with supporting bills and vouchers. Since no regular books of account were found maintained by the assessee in survey and no vouchers were produced during the course of survey and the assessment proceedings, therefore, there was chance that the assessee would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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