Asstt. CIT v. Safal Resorts (P) Ltd.

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The Tax Publishers2023 TaxPub(DT) 3146 (Mum-Trib) IN THE ITAT MUMBAI KULDIP SINGH, J.M. & SHRI GAGAN GOYAL, A.M. Asstt. CIT v. Safal Resorts (P) Ltd. ITA No. 69/M/2023 25 May, 2023 Assessee by: None Revenue by: Nihar Ranjan Samal, Sr DR ORDER *Kuldip Singh, J. M.* The appellant, The Assistant Commissioner of Income Tax (hereinafter referred to as the revenue) by filing the present appeal, sought to set aside the impugned Order dated 14-11-2022 passed by National Faceless Appeal Centre, Delhi/ (Commissioner (Appeals), Mumbai (hereinafter referred to as the Learned Commissioner (Appeals)) qua the assessment year 2019-20 on the grounds inter-alia that:- 1. Whether on the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) was justified in allowing the assessee's claim and directing the assessing officer to assessee the profit of the company @ 3% of the shown receipts of Rs. 3,76,96,024 which works out to Rs. 11,30,880.' 2.Whether on the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) was justified in directing the Assessing Officer to verify the matter and allow further relief as same is found admissible as per provisions of Income Tax Law while giving effect to Commissioner (Appeals)'s order and reduced the impugned addition from Rs. 3,71,87,629 to Rs. 11,30,880. 3. Whether on the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) was justified in allowing the assessee's claim on account of expenses being operational cost and administrative expenses (including employee benefit expenses) without appreciating the fact that after receiving the information from investigation wing, it was analyzed and after recording appropriate reason the assessment was reopened Under Section 147 of the Act. The assessee has claimed huge expenses but failed to produce basic details such as nature of expenses, ledger a/c name and address of the parties with whom the transactions were made, whether TDS has been deducted or not, copies of bills and vouchers, and no bank statement was produced reflecting that the expenses were incurred by the assessee.' 2. Briefly stated facts necessary for consideration and adjudication of the issues at hand are: the assessee filed return of income declaring total income of Rs. 3,79,060 for the year under consideration was initially processed Under Section 143(1) of the Income Tax Act, 1961 (for short the Act). Thereafter, on receipt of information from Dy. Director of Income Tax (Investigation) that in an open enquiry carried out in case of the assessee. Summons Under Section 131 of the Act was issued to the assessee by DDIT to furnish certain documents/ information, which the assessee has not furnished. From the profit and loss account of the year under consideration it is noticed that the assessee has incurred expenses to the tune of Rs. 3,46,23,716 and Rs. 25,63,913 (Rs. 3,71,87,629) on account of operational cost and administrative expenses respectively. On failure of the assessee to produce bank statement reflecting that the expenses were incurred by assessee, the expenses remained unexplained and thereby disallowed by the Assessing Officer Under Section 37(1) of the Act to the tune of Rs. 3,71,87,629. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2023 TaxPub(DT) 3146 (Mum-Trib)

IN THE ITAT MUMBAI

KULDIP SINGH, J.M. & SHRI GAGAN GOYAL, A.M.

Asstt. CIT v. Safal Resorts (P) Ltd.

ITA No. 69/M/2023

25 May, 2023

Assessee by: None

Revenue by: Nihar Ranjan Samal, Sr DR

ORDER

Kuldip Singh, J. M.

The appellant, The Assistant Commissioner of Income Tax (hereinafter referred to as the revenue) by filing the present appeal, sought to set aside the impugned Order dated 14-11-2022 passed by National Faceless Appeal Centre, Delhi/ (Commissioner (Appeals), Mumbai (hereinafter referred to as the Learned Commissioner (Appeals)) qua the assessment year 2019-20 on the grounds inter-alia that:-

1. Whether on the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) was justified in allowing the assessee's claim and directing the assessing officer to assessee the profit of the company @ 3% of the shown receipts of Rs. 3,76,96,024 which works out to Rs. 11,30,880.'

2.Whether on the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) was justified in directing the Assessing Officer to verify the matter and allow further relief as same is found admissible as per provisions of Income Tax Law while giving effect to Commissioner (Appeals)'s order and reduced the impugned addition from Rs. 3,71,87,629 to Rs. 11,30,880.

3. Whether on the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) was justified in allowing the assessee's claim on account of expenses being operational cost and administrative expenses (including employee benefit expenses) without appreciating the fact that after receiving the information from investigation wing, it was analyzed and after recording appropriate reason the assessment was reopened Under Section 147 of the Act. The assessee has claimed huge expenses but failed to produce basic details such as nature of expenses, ledger a/c name and address of the parties with whom the transactions were made, whether TDS has been deducted or not, copies of bills and vouchers, and no bank statement was produced reflecting that the expenses were incurred by the assessee.'

2. Briefly stated facts necessary for consideration and adjudication of the issues at hand are: the assessee filed return of income declaring total income of Rs. 3,79,060 for the year under consideration was initially processed Under Section 143(1) of the Income Tax Act, 1961 (for short the Act). Thereafter, on receipt of information from Dy. Director of Income Tax (Investigation) that in an open enquiry carried out in case of the assessee. Summons Under Section 131 of the Act was issued to the assessee by DDIT to furnish certain documents/ information, which the assessee has not furnished. From the profit and loss account of the year under consideration it is noticed that the assessee has incurred expenses to the tune of Rs. 3,46,23,716 and Rs. 25,63,913 (Rs. 3,71,87,629) on account of operational cost and administrative expenses respectively. On failure of the assessee to produce bank statement reflecting that the expenses were incurred by assessee, the expenses remained unexplained and thereby disallowed by the Assessing Officer Under Section 37(1) of the Act to the tune of Rs. 3,71,87,629.