M/s Open Terrace Realtors LLP , Bangalore V. Income Tax Officer Ward-3(2)(4), Bangalore

ITA 526/BANG/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8772 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 14-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Tax effect; TDS
• Section: 69C; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER I TA NO. 526 /BANG/201 9 ASSESSMENT YEAR : 20 1 5 - 1 6 M/S. OPEN TERRACE REALTORS LLP, 142/143, 1 ST FLOOR, G R PLAZA, DR. DVG ROAD, GANDHI BAZAR, BASAVANAGUDI, BANGALORE. PAN: AADFO4779P VS. THE INCOME TAX OFFICER, WARD 3 (2) (4), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : DR. P.V. PRADEEP KUMAR, ADDL. CIT (DR) DATE OF HEARING : 0 3 .0 7 .2019 DATE OF PRONOUNCEMENT : 05 .0 7 .2019 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-3, BANGALORE DATED 25.10.2018 FOR ASSESSMENT YEAR 2015-16. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. GROUNDS OF APPEAL TAX EFFECT RELATING TO EACH GROUND OF APPEAL (SEE NOTE BELOW) 1. SALARIES PAID TREATED AS UNEXPLAINED EXPENDITURE U/S 69C OF INCOME TAX ACT,1961. THOUGH SALARY STATEMENT/ABSTRACT PLACED ON THE RECORD, THE AO FOR NOT HAVING BEEN SUBMITTED THE IT RETURNS FILED BY ALL THE EMPLOYEES, DISALLOWANCE HAS BEEN MADE. THE ASSESSEE SUBMITTED THE INCOME TAX RETURNS OF EMPLOYEES WHO LIABLE TO FILE INCOME TAX RETURNS. BUT THE AO PARTLY RS. 9,65,086/- EXCLUDING INTEREST U/S 234B. ITA NO. 526/BANG/2019 PAGE 2 OF 3 ALLOWED OF EXPENDITURE WHERE ROI SUBMITTED CASES ALONE AND WHERE ROI NOT LIABLE TO FILE BY THE EMPLOYEES I.E., WHERE SALARY LESS THAN BASIC EXEMPTION LIMIT, IS DISALLOWED AN AM OUNT OF RS. 31,23,556/ - . 2. COMMISSION/INCENTIVES PAID TREATED AS UNEXPLAINED EXPENDITURE U/S 69C OF INCOME TAX ACT,1961. WE HAVE SUBMITTED THE DETAILS OF INCENTIVE PAID ALONG WITH TDS RETURNS AND FORM 16A ISSUED BY THE ASSESSEE TO THE DEDUCTEES AND FOR NOT HAVING SUBMITTED THE RETURNS OF THE DEDUCTEES THE AO HAS DISALLOWED FULL EXPENDITURE. THE AO HAS NOT USED THE POWER VESTED WITH HIM U/S 133(5) OF INCOME TAX ACT, 1961., TO GET THE INFORMATION FROM THE RESPECTIVE DEDUCTEES. THE ASSESSEE TRIED TO GET THE RETURN OF INCOME FILED BY THE DEDUCTEES AND SOME CASES RECEIVED AND ALSO PLACED ON RECORD BUT NOT CONSIDERED BY THE AO AND MADE DISALLOWANCE OF RS. 18,73,563/ - . RS. 5,78,931/- EXCLUDING INTEREST U/S 234B. TOTAL TAX EFFECT (SEE NOTE BELOW) RS.15,44,017/ - 3. THIS APPEAL WAS FIXED FOR HEARING ON 03.07.2019 AND NOTICE OF HEARING WAS SENT TO ASSESSEE BY RPAD WHICH HAS BEEN DULY SERVED ON ASSESSEE AS PER ACKNOWLEDGMENT AVAILABLE ON RECORD. IN SPITE OF THIS, NONE APPEARED ON BEHALF OF THE ASSESSEE ON THIS DATE OF HEARING AND THERE IS NO REQUEST FOR ADJOURNMENT AND THEREFORE WE HEARD THIS APPEAL EX-PARTE QUA THE ASSESSEE. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR OF REVENUE AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. REGARDING THE FIRST DISALLOWANCE OF RS. 31,23,556/-, IT IS NOTED BY CIT(A) IN PARA 4.0 OF ITS ORDER THAT THE AO ASKED THE ASSESSEE TO PROVIDE COMPLETE DETAILS OF SALARY AND WAGES AMOUNTING TO RS. 54,63,568/- AND ASSESSEE WAS ASKED TO PROVIDE NAME, ADDRESS, PHONE NUMBER, EDUCATIONAL QUALIFICATION, DUTIES ENTRUSTED AND QUANTUM OF SALARY PAID TO THE EMPLOYEES. HE FURTHER NOTED IN SAME PARA THAT IN RESPONSE TO SAME, THE ASSESSEE SUBMITTED DETAILS RELATING TO AN AMOUNT OF RS. 23,39,012/- BUT FOR THE BALANCE AMOUNT OF RS. 31,23,556/-, NO DETAILS / EXPLANATION WAS FURNISHED BY THE ASSESSEE. THE AO MADE DISALLOWANCE OF ITA NO. 526/BANG/2019 PAGE 3 OF 3 THIS AMOUNT ON THIS BASIS THAT THESE ARE UNVERIFIED EXPENSES DEBITED TO THE P&L ACCOUNT. IN PARA 4.1 OF ITS ORDER, IT IS NOTED BY CIT(A) THAT NO DETAILS HAVE BEEN FURNISHED BY ASSESSEE BEFORE HIM TO CONTROVERT THE FINDINGS OF THE AO AND THEREFORE HE UPHELD THE DISALLOWANCE. IN VIEW OF THESE FACTS, WE FIND NO REASON TO INTERFERE BECAUSE ASSESSEE HAS NOT FILED ANY DETAIL BEFORE US ALSO. 5. REGARDING SECOND ISSUE IN RESPECT OF ADDITION OF RS. 18,73,563/-, IT IS NOTED BY CIT(A) IN PARA 5.0 OF ITS ORDER THAT IN COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO PRODUCE COMPLETE DETAILS OF COMMISSION / INCENTIVES AMOUNTING TO RS. 18,73,563/-. HE HAS ALSO NOTED THAT THE ASSESSEE WAS ASKED TO PRODUCE THE DETAILS OF PARTIES / PERSONS TO WHOM THE COMMISSION / INCENTIVE WAS PAID AND DETAILS OF PROPERTIES / QUANTUM OF COMMISSION PAID IN RELATION TO THE SAME. BUT THE ASSESSEE FAILED TO PROVIDE ANY DETAIL AND THEREFORE THE AO DISALLOWED THIS AMOUNT IN THE ABSENCE OF ANY DOCUMENTS / EXPLANATION AND HE HELD THAT THESE ARE UNVERIFIED EXPENSES DEBITED TO THE P&L ACCOUNT. THEREAFTER IN PARA 5.1 OF ITS ORDER, IT IS NOTED BY CIT(A) THAT DURING APPELLATE PROCEEDINGS ALSO, NO DETAILS HAVE BEEN FURNISHED BY THE ASSESSEE TO CONTROVERT THE FINDINGS OF THE AO AND THEREFORE HE CONFIRMED THE DISALLOWANCE. BEFORE US ALSO, NO DETAIL IS FURNISHED AND THEREFORE WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE ALSO. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 05 TH JULY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.