AI Structured Summary
Not yet generated for this judgment
Judgment
PER KRINWANT SAHAY AM
Appeal in this case has been filed by the Assessee against the order dated 16.03.2026 passed by the CIT(A)/NFAC, Delhi for the A.Y. 2020-21. Grounds of appeal are as under :-
GROUNDS OF APPEAL
1. Disallowance of expenses where all the relevant information are already furnished
The learned CIT(A) gravely erred in law and on facts in confirming the addition made by learned AO by not admitting additional evidences submitted by the assessee.
The assessee has collected the ITRs and Confirmations from her agents to prove her commission expense but since in the given time she was unable to obtain all the confirmations, the complete expense was disallowed which is unjustified.
The confirmations and the submissions included Name, PAN, addresses and amount, but both the Id. AO and the Id. CIT(A) have treated the submitted evidences as insufficient since the confirmations were not printed on letter head.
Assessee also explained that the agents were individuals and do not have any printed letter heads and all the information is there for verification but the same was not found acceptable by Id. CIT(A).
Your honour, assessee submitted all the documents possible to be obtained from a third party including their PAN, ITR, Address, and most importantly confirmations but rejecting the same by considering them insufficient without providing the extra information required is unjustified.
We hence pray before your honour to kindly accept the submissions and allow the appeal and oblige.
2. Non verification of data submitted
During the course of assessment and first appeal proceedings, the assessee submitted data of third parties and furnished information of expenses paid to each respective party but the learned AO failed to execute any verification from any of those parties and disallowed the claim of the assessee citing lack of evidence which is against the principal of natural justified and is contested before your honour in this present appeal since all the persons to whom the commissions were paid are all regular assesses of the department and are filing their respective ITR
We pray before your honours to kindly consider the fact that all the payments were made from bank account only for the purpose of business.
Complete list of payees was submitted along with their PAN, Address and respective commission paid to each person to prove geniuses of the transactions.
This was the first year of audit for the assessee where her gross receipts crossed the applicable turnover threshold.
Non-submission due to insufficient time allowed is a technical but bona fide situation in case of the assessee.
And disallowing the major important expense of the assessee even after all the relevant necessary details were furnished creates a very high demand for the assessee where the expenses were actually made, which is wrong.
We hence pray before your honour to kindly delete the demand, quash the order and oblige. We hope your honour finds the above in order and accept the appeal and oblige.”
During proceedings before us the Ld. Counsel of the assessee submitted that during the course of assessment as well as during appellate proceedings the assessee submitted data of third parties and furnished information of expenses paid to each respective party but the Ld. AO failed to execute any verification from any of those parties and disallowed the claim of the assessee citing lack of evidences. Similarly, The Ld. CIT(A) refused to admit additional evidences and confirmed the order and additions made by the AO.
Per contra the Ld. DR relied on the findings of the authorities below.
We have heard the arguments of both the parties and we find that the Ld. CIT(A) did not accept additional evidences filed by the assessee. Even the AO has not made verifications of all the document and details filed by the appellant during the assessment proceedings. Therefore, in our considered view in the fitness of things the matter should go back to the file of the AO for denovo assessment after giving adequate opportunity to the assessee as required under law. The appellant is also directed to file all the necessary documents and details and data before the AO in time so that the assessment order may be passed at the earliest.
In the result, the appeal filed by the assessee is allowed for statistical purpose.