IN THE INCOME TAX APPELLATE TRIBUNAL
                 DELHI BENCH: `H' NEW DELHI
         BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER
                                 AND
               SHRI C. M. GARG, JUDICIAL MEMBER
                         I.T.A .No.-4523/Del/2011
                        (Assessment Year-2008-09)

Shri Vishnu Kumar and Brothers            Vs.       ITO
2369, Chatta Shahji Chawri                          Ward-29(2),
Bazar, Delhi-110006.                                New Delhi.

PAN: AAAFV5850H
(APPELLANT)                                         (RESPONDENT)

                    Assessee by:-Sh. P. C. Yadav, Adv.
                    Revenue by:-Sh. J.P. Chandrakar, Sr.DR.
                    Date of Hearing: 24.11.2014
                    Order pronounced on: 11.12.2014
                                   ORDER

PER N. K. SAINI, AM


      This is an appeal by the assessee against the order dated 23.08.2011 of

ld. CIT (Appeals)-XXV, New Delhi.


2.    The first issue in this appeal vide ground no. 1 relates to the sustenance of

addition of Rs.5,13,000/- made by the AO u/s 41(1) of the Income Tax Act,

1961, (hereinafter referred `the Act').


3.    The facts of the case in brief are that the assessee was engaged in the

business of trading of papers and filed the return of income on 24.09.2008,

declaring Nil income. Latter on the case was selected for scrutiny. During the

course of assessment proceedings the AO accepted the trading results however,

he noticed that the assessee had shown one of the creditors i.e. M/s J.K. Paper
                                        2


Ltd. with a balance of Rs.26,28,947/ - while the said party u/s 133(6) of the Act

had shown closing balance at Rs.31,41,947/-. The AO asked the assessee to

furnish the explanation for the difference of Rs.5,13,000/-. In response the

assessee stated that there were certain debit and credit entries which have not

been considered by both the parties. The AO did not find any merit in the

submissions of the assessee by observing that the assessee had not given any

evidence. Accordingly addition of Rs.5,13,000/- was made. Being aggrieved the

assessee carried the matter to the ld. CIT(A) who confirmed the addition made

by the AO.







4.    Now the assessee is in appeal. The ld. counsel for the assessee submitted

that neither the AO nor the ld. CIT(A) properly appreciated the facts in right

prospective particular this contention that either of the parties had not

considered certain debit and credit entries which was the main reason for

difference in the balance sheet shown by the assessee and the respective party.

He requested that the issue may be sent back to the AO for considering the

reconciliation furnished by the assessee. In his rival submissions, the ld. DR

supported the orders of the authorities below.


5.    We have considered the submissions, of both the parties and carefully

gone through the material available on record. In the instant case, it appears that

the explanation of the assessee that certain debit and credit entries were not

considered by either of the parties i.e. assessee and the creditor which resulted

into the impugned difference in the closing balance, has not been appreciated
                                        3


properly by the authorities below. We therefore, deem it appropriate to remand

this issue back to the file of the AO for adjudicating it afresh in accordance with

law after providing due and reasonable opportunity of being heard to the

assessee.


6.    The next issue vide ground no. 2 relates to the sustenance of addition of

Rs.38,573/- made by the AO out of telephone expenses. The facts related to this

issue in brief are that the assessee incurred telephone expenses of Rs.85,975/-.

The AO found that a sum of Rs.43,216/- was related to the telephone installed at

the residence of the partners and the assessee had paid Fringe Benefit Tax

(FBT) on expenses of Rs. 8,643/-. The AO therefore, made the addition of

Rs.38,573/- (Rs.43,216/- (-) Rs.8643/-). Being aggrieved, the assessee carried

the matter to the ld. CIT(A) who sustained the addition made by the AO.







7.    Now the assessee is in appeal. During the course of hearing the ld.

counsel for the assessee submitted that the assessee paid the Fringe Benefit Tax

(FBT) on the telephone expenses which included the expenses related to the

telephone installed at the residence of the partners but the AO considered the

amount of Fringe Benefit Tax (FBT) deposited as an amount on which Fringe

Benefit Tax was paid. He requested that this issue may also be sent to the AO

for proper verification and deciding the same on merits. In his rival

submissions, the ld. DR supported the orders of the authorities below.
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8.     After considering the submissions of both the parties and perusing the

material on record, we are of the opinion that this issue requires a fresh

adjudication at the level of the AO because the contention of the ld. counsel for

the assessee that the amount of the Fringe Benefit Tax deposited i.e. Rs.8,643/-

on the total expenses of Rs.43,216/- was wrongly considered by the AO as an

amount on which Fringe Benefit Tax (FBT) was paid. Accordingly this issue is

remand back to the AO for adjudicating afresh, in accordance with law after

providing due and reasonable opportunity of being heard to the assessee.


9.     In the result, appeal is allowed for statistical purposes.


Order pronounced in the open Court on 11/12/2014.



     Sd/-                                                 Sd/-
  (C. M. GARG)                                      (N. K. SAINI)
JUDICIAL MEMBER                                 ACCOUNTANT MEMBER

Dated: 11/12/2014
*AK VERMA*

Copy forwarded to:

1.   Appellant
2.   Respondent
3.   CIT
4.   CIT(Appeals)
5.   DR: ITAT


                                                      ASSISTANT REGISTRAR