Shri Kuldeep Sidhu, Zirakpur V. ITO Ward-1, Barnala

ITA 203/CHANDI/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4334 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 25-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; FORM 26AS
• Section: 144; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH CHANDIGARH Before Shri Sanjay Garg, Judicial Member I.T.A. Nos.203&204/CHANDI/2020 Assessment Years: 2010-11 & 2011-12 Shri Kuldeep Sidhu..................... ..................................................... Appellant H. No.98, AKS Colony, Patiala Road, Zirakpur, Punjab – 140603. [PAN: APMPS4429N] vs. ITO, Ward-1, Barnala...................................................................... Respondent Appearances by: Shri Ajay Jain, CA, appeared on behalf of the appellant. Smt. Amanpreet Kaur, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : August 01, 2022 Date of pronouncing the order : September 22, 2022 ORDER Per Sanjay Garg, Judicial Member: The captioned appeals have been preferred by the assessee against the separate orders both dated 26.11.2019 of the Commissioner of Income Tax (Appeals), Patiala [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). Since the facts and issues involved in both the appeals are identical, hence, both the captioned appeals were heard together and are being disposed of with this common order. The assessee’s appeal ITA No.203/CHANDI/2020 for A.Y- 2010-11 is taken as lead case. The assessee in this appeal has taken the following grounds of appeal: “1. That the Ld. CIT(A) has wrongly confirmed the addition of Rs.13,06,350/- on account of expenses incurred in cash. The Ld. CIT(A) has decided the appeal with the presumption that not even a penny is spent in cash in business.” 2. The brief facts of the case are that as per information received from the system, the Assessing Officer noticed that as per Form 26AS, the assessee during the year had received commission income of Rs.25,09,350/- from Punjab Technical University, Jalandhar but as per the records, the assessee had not filed any return of income for the I.T.A. Nos.203&204/CHANDI/2020 Shri Kuldeep Sidhu Assessment Years: 2010-11 & 2011-12 2 assessment year 2010-11. Accordingly, the case was reopened. However, no compliance was made by the assessee before the Assessing Officer in the reopened assessment proceedings, therefore, the Assessing Officer proceeded to frame the assessment u/s 144 of the Act and assessed the commission income of assessee at Rs.25,09,350/-. 3. Being aggrieved by the said order, the assessee preferred appeal before the CIT(A). Before the ld. CIT(A), the assessee pleaded that against the gross receipts of Rs.25,09,350/- received from PTU during the year under consideration, the assessee had incurred expenses of Rs.24,64,668/-. The assessee, in this respect, furnished the additional evidences before the CIT(A). The ld. CIT(A) called for remand report from the Assessing Officer in this respect. In the remand report, the Assessing Officer noted that the assessee would reconcile the expenditure to the extent of Rs.12.03 lakhs only which was paid through banking channel out of total expenditure of Rs.24.64 lakhs. It was further noted that the remaining expenditure was claimed to be paid in cash, however, the assessee could not furnish the bills and vouchers of the same. That only self made vouchers were furnished. The ld. CIT(A), therefore, gave relief to the assessee to the extent of the expenditure that was incurred through banking channel i.e. of Rs.12.03 lakhs and sustained the addition of the remaining amount of Rs.13,06,350/-. 4. Being aggrieved by the said order of the CIT(A), the assessee has preferred this appeal before the Tribunal. I have heard the rival contentions of the ld. representatives of the parties and also gone through the records. The ld. Counsel for the assessee has submitted that Punjab Technical University was imparting education through learning centres located at various places, which were coordinated, managed, supervised, facilitated and controlled through regional centres and the assessee, a woman from rural background, was running a regional centre at Barnala and covering PTU learning centres at three districts of Faridkot, Mansa and Bathinda. She was compensated by way of sharing of fee at certain rate in this respect. The ld. Counsel has further submitted that since the assessee was operating in rural areas of Punjab and the activity of the assessee was relating to advertisement, seminar and meetings, travelling, conveyance etc., therefore, most of the expenditure was incurred in cash and there were no bills and I.T.A. Nos.203&204/CHANDI/2020 Shri Kuldeep Sidhu Assessment Years: 2010-11 & 2011-12 3 vouchers issued by the recipients, therefore, the self prepared vouchers were produced. That however, taking into consideration the activity of the assessee, the expenditure was genuinely incurred. That if the assessee could reconcile the expenditure of Rs.12.03 lakhs incurred through banking channel, out of Rs.24.64 lakhs then it cannot be said that the assessee did not incur any single penny in cash. 5. The ld. DR, on the other hand, has relied upon the findings of the lower authorities. 6. It is to be noted that the assessee received total commission income of Rs.25,09,350/- out of which the assessee has claimed the expenditure of Rs.24,64,668/- which means the assessee earned only a profit of Rs.44,682/- during the year. In respect of subsequent assessment year 2011-12, the assessee has claimed that out of gross receipt of Rs.11,04,990/- during the financial year 2010-11, the assessee incurred expenses of Rs.12,09,675/- and thus, declared a loss of Rs.1,04,685/- . Considering the fact that the assessee has not produced bills and vouchers relating to the cash expenditure, the element of making exaggerated claim cannot be ruled out. However, it can also be not disputed that the assessee might have incurred some expenditure in cash. Therefore, considering the overall facts and circumstances, the disallowance is restricted to the extent of 25% of the addition sustained by the CIT(A) for both the assessment years under consideration. The addition of the remaining amount is deleted. 7. In the result, both the appeals are treated as partly allowed. Kolkata, the 22 nd September, 2022. Sd/- [Sanjay Garg] Judicial Member Dated: 22.09.2022. RS I.T.A. Nos.203&204/CHANDI/2020 Shri Kuldeep Sidhu Assessment Years: 2010-11 & 2011-12 4 Copy of the order forwarded to: 1. Shri Kuldeep Sidhu 2. ITO, Ward-1, Barnala 3. CIT(A)- 4. CIT- , 5. CIT(DR), ITAT, Chandigarh //True copy// By order Assistant Registrar