Shri Vishnu Kumar and Brothers 2369, Chatta Shahji Chawri Bazar, Delhi-110006. Vs. ITO Ward-29(2), New Delhi.
December, 18th 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `H' NEW DELHI
BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER
SHRI C. M. GARG, JUDICIAL MEMBER
Shri Vishnu Kumar and Brothers Vs. ITO
2369, Chatta Shahji Chawri Ward-29(2),
Bazar, Delhi-110006. New Delhi.
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
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
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
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
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.
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.
(C. M. GARG) (N. K. SAINI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Copy forwarded to:
5. DR: ITAT