TaxTMI 
TaxTMI 
2010 (12) TMI 966
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....alpur Extension, New Delhi 2. LG-13, Somdutt Chamber-II, Bhikaji Cama Place, R.K. Puram, New Delhi 3. Marry Villa, Andhri(E), Opp. Sahara Air Complex, Sutarwa, Mumabi-99 4. J-7, NDSE Part-I, New Delhi 5. Farm House of Shri Virender Khosla at Sonia Farm Opp. BSF Center, 54/22, Chawwla, Bijwasan, Delhi 6. G-42, Mansarover Gardens, New Delhi 7. 68, Ring Road, Lajpat Nagar, New Delhi" 3. Notice under Section 158BC of the Income Tax Act, 1961 was issued on 07.11.2002. The assessee had filed the return of income for the block assessment. In Form no. 2B the assessee had declared un-disclosed income of Rs.12 lacs. Accordingly, the notice under Section 143(2) and 142(1) along with questionnaire were issued on 10.10.2003. The same was duly served upon the assessee. The assessee had filed the written submission and other details during the course of hearing. During the course of search cash of Rs.2,07,300/- was found at the business premises of the assessee at Plot No.9-A, NH-8, Mahipalpur Extension, New Delhi. The business of the assessee company was an IATA approved rate and forwarding agent, however they are mainly engag....
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....sp; 30000 Cash paid to Mr.Gupta 12 5-Mar-01 550000 Paid for marble 13 13-Mar-01 114000 Paid to Directors 24 28-May-01 15000 15000 Mr.Gupta 24 28-May-01 65000 65000 Received from inderveer 24 29-May-01 177000 177000 Received from Mr.Wadhwa 24 1-June-01 375000 375000 Anil 24 1-June-01 13000 13000 V.K. 24 1-June-01 35000 35000 Wadhwa 25 8-June-01 5000 5000 Received 26 12-June-01 6160 6160 Received from gardner 27 20-June-01 65000 Paid to Murli Kakkar 32 27-June-01 31250 31250 Wadhwa 33 30-Aug-01 10000 10000 M.Singh 39 11-Sep-01 130000 Mr.Gupta 41 24-Sep-01 50000 Mr.K. 41 24-Sep-01 2000 Paid to Doctor 42 5-Oct-01 200000 Paid to Mr.Magu 51 5-Dec-01 165000 165000 Received from Katya....
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....:- "The books of accounts of the assessee company was verified and found that not a single transaction recorded in annexure A-59 has been accounted for in the books of accounts for the period mentioned in the Annexure A-59." 10. The Assessing Officer came to the conclusion that the diary inventoried as A-59 was found from the premises of the assessee and all the transactions mentioned therein are business transactions of the assessee unless otherwise route. Though the assessee had admitted that the transactions amounting to Rs. 21,75,000/- as per the details mentioned in above table were business transactions of the company. Therefore, in regard to the balance transactions of Rs.14,00,110/-, the assessee had failed to controvert the presumption of law that these transactions do not pertain to the assessee's business. In view of the above discussion and after considering the facts that the transactions of Rs.35,75,110/- has not been recorded in the books of accounts of the assessee company, although, the assessee admitted that these were its business transactions. Therefore, all such transactions were undisclosed income of the assessee company and the same was in....
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....essee for the block period; out of which addition of Rs.41,75,000/- was made on 'substantive basis' and addition of Rs.14,00,100/- was made on 'protective basis'" 16. During the course of search and seizure operations Annexure A-59 was seized from the business premises of the assessee company, certain transactions amounting to Rs.35,75,110/- were found recorded. The assessee submitted before the Assessing Officer that the table diary was maintained by Mr. V.K. Khosla, Director of the company, in his own hand writing which contains details of business transactions relating to the assessee company but the Assessing Officer has not accepted the contention of the assessee. The Assessing Officer has observed in the assessment order that books of accounts of the assessee company were verified and found that not a single transaction recorded in AnnexureA-59 had been accounted for in the books of accounts for the period mentioned in the annexure A-59. The Assessing Officer has also mentioned the details of the transaction claimed to be pertaining to the business of the assessee company which is reproduced below:- Page No. Date Receipt Payment Income Remar....
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....argued that there was no justification to make addition of Rs.14,00,100/- in the case of the assessee on 'protective basis'. 19. After going through all the records, the CIT(A) had observed that Mr. Khosla, had taken this ground in the appeal filed by him against the block assessment order. In his case, has taken the ground that the Assessing Officer had not appreciated the fact of cash availability with the assessee out of undisclosed income of his firm while determining Rs.13,30,110/- and undisclosed income for the block period. Thus, even in the ground of appeal taken before CIT(A), Mr. Khosla had not contested the fact that the entries of Rs.14,00,100/- pertains to his personal transactions. The Assessing Officer has not brought out any material on record to established that the transactions entered in this table diary amounting to Rs.14,00,100/- does not belong to personal transactions of Mr. V.K.Khsola. Moreover, in the block assessment order undisclosed income cannot be determined on protective basis. 20. Therefore, keeping in view the facts and circumstances of the case the CIT(A) was of the view that the Assessing Officer was not justified in determinin....
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....s of account of the assessee company, is not tenable. The assessee company had picked up certain transactions recorded in the bank book on a particular day in order to match the quantum. For example, on page No.5 of the table diary dated 15.01.2001, receipt of Rs.6 lacs and payment of Rs.4.50 lacs to chacahji and Rs.1.5 lacs to Mr. Katyal had been recorded. The assessee had tried to explained that the receipt of Rs.6 lacs pertains to the receipts of two cheques; one from M/s Mals Cargo Pvt. Ltd. of Rs.4 lacs and from M/s Sheriff Travel and Cargo of Rs.2 lacs. The CIT(A) has also noticed from the bank book of the assessee that many other cheques from various parties on that date had been recorded in the bank book , such as cheque of Rs.5,08,045/- from M/s HTL Logestick India Pvt. Ltd., Rs.1 lac from Continental Cargo Movers etc. It is worth mentioning that in the table diary it had been noted that out of Rs.6 lacs were paid to chachaji and Rs.1.5 lacs to Mr. Katyal. However, in the bank book, no such entry regarding payments of Rs.4.5 lacs and Rs.1.5 lacs were found recorded. The assessee unsuccessfully tried to explain that these entries were recorded as M/s Mals Cargo Pvt. Ltd. th....
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....closed source of income, therefore, the CIT(A) affirmed the addition of Rs.30,000/-. 27. The ITAT had relied upon the order passed by the CIT(A) as was observed by the CIT(A) that all the amounts in question were received through cheques from its customers and the same were duly explained and entered in the regular books of account on the dates mentioned in the explanation. Since on some of the occasions, the assessee was under the pressure for making payment to the airlines company, in order to collect payment from their customers, pressure was built on customers through telephonic talk and by sending the persons, and if on telephone the customers assure for making the payment, the same was noted in the name of customer, the same cannot be made the reasons for alleging that assessee was not in receipt of the cheque. Whenever, any notings regarding receipt of cheque is found, the department has all the powers to verify the cheques either from the bank account of the assessee or from the bank account of issuing parties, and if any discrepancy is found or the other party refuses for making any such payment or assessee could not explain the source of such cheque, definitely ....