TaxTMI 
TaxTMI 
2012 (11) TMI 709
X X X X Extracts X X X X
X X X X Extracts X X X X
....erefore, the balance amount of cash found requires to be considered as explained. 2. The learned CIT(A) has also erred in confirming addition of Rs.2,00,000/- as the amount advanced to Mangilal. In view of the facts, details and submission, the said addition of Rs.2,00,000/- requires to be deleted. 3. The learned CIT(A) has also erred in giving a finding that interest of Rs.1,40,400/- on amount advanced of Rs.2,00,000/- to Mangilal is required to be taxed as and when actually received. In view of the facts, since no such amount is advanced and therefore, the said finding of the learned CIT(A) requires to be reversed. 4. The learned CIT(A) has also erred in confirming addition of Rs.4,31,957/- made by the A.O as undisclosed investment. In view of the facts, the said amount is required to be considered at Rs.3,97,157/- and therefore, balance amount of Rs.34,800/- requires to be deleted. 5. The learned CIT(A) has erred in considering the entire sale of Rs.11,78,245/- as unaccounted and as a result, confirming the entire sales for the purpose of addition. In view of the facts and details either the entire addition requires to be deleted or in the alternative at the most onl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A) has erred, on the facts of the case and in law in deleting the addition made by the Assessing Officer on account of unaccounted sales of Rs.1,98,110/- as per page No.1 of Annexure A/28 seized from the factory premises. 7. The learned CIT(A) has erred, on the facts of the case and in law in deleting the addition made by the Assessing Officer on account of unaccounted expenditure incurred in cash of Rs.2,77,298/- as per page No.75 to 79 of Annexure A/1 seized. 8. The learned CIT(A) has erred, on the facts of the case and in law in deleting the addition made by the Assessing Officer being unaccounted salary of Rs.1,55,000/- paid to Shri Kirtikumar S Shah, employee of the company. 9. The learned CIT(A) has erred, on the facts of the case and in law in allowing the set off of unaccounted expenditure/investment against unaccounted income. 10. On the facts and in the circumstances of the case and in law the Ld. CIT(A) ought have upheld the order of the Assessing Officer." The assessee has raised the following ground in IT(SS)A No.14/Ahd/2007 as under:- "1. The learned CIT(A) has erred in law and on facts in confirming the penalty of Rs.9,22,917/- levied by the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... D.D. Agarwal wherever the figures have been written with paisa notings while putting a bracket followed by 2 zeros, the bracket is to be omitted for arriving at the actual amount. Accordingly, the figure of 2000) and the total of 3404)00 has been treated by the A.O as Rs.2,00,000/- and Rs.3,40,400/- while omitting the bracket. The total of Rs.3,40,400/- has been bifurcated into amount of Rs.2,00,000/- as outstanding amount and Rs.1,40,400/- being interest on the said amount on various dates. The AO while rejecting the assessee's contention has observed that the confirmation filed by the assessee in support of its claim is only a self-serving document and accordingly, has no material value. AO has observed that the logical analysis of all the notings on loose paper and on this amount has earned interest income of Rs.1,40,400/-. The Ld. CIT(A) confirmed the action of the AO as regards the addition of Rs.2 lakh but deleted the addition of Rs.1,40,400/- because there is no evidence to establish that the said interest has in fact been received by the assessee. 6. Our attention was invited by the Learned Counsel for the assessee at assessee's paper book (PB) page-87, where the said s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....observation and finding in para-6 and more particularly on page-23 and 24 of the assessment order has made the said addition while treating the notings in respect of amounts as made on the above mentioned pages of Annexure-A/2 by adding 2 zeros written after the racket against the amounts noted to arrive at the actual amount. The Ld. CIT(A) vide para-5.2 of his order restricted the addition to Rs.20,833/- and allowed a relief of Rs.3,79,467/-. 10. We have heard the rival contentions and perused the facts of the case. The Ld. CIT(A) has decided the issue on the basis of the statement made by Shri Manoj D Agrawal and the notings made in the Annexre-A/2. On perusal of the record, we find no error in the order of Ld CIT(A) that as per Annexure-A/2 which specific reference to the statement of Shri Manoj D Agrawal actual amount of addition works out to Rs.20,833/- and therefore we find no infirmity in the order of Ld CIT(A). Thus, ground No.2 of the Revenue is dismissed. 11. As regards to ground No.3 of the Revenue. The brief facts are that the addition is based on notings made on page-3 of Annexure-A/2. The addition is made by the Assessing Officer while treating the fig....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to Kantibhai and interest of Rs.70,421/- thereon. The impugned addition has been made by the AO on the basis of notings on page- 2 ofAnnexure-A/2 and the observation made by him on page-26 and 27 of the assessment order. The addition has been made while applying the same analogy of adding 2 zeros in the figures written on page-2 of the seized Annexure. 17. Ld. CIT(A) restricted the addition of Rs.12,000/- and Rs.794.21 vide para-8.2 of his order on the same reasonings as in the immediate preceding ground. 18. We have heard the rival contentions and perused the facts of the case. The facts in the present ground are identical to the facts in Revenue's ground No.4 hereinabove and therefore following our decision in ground No.4 hereinabove, we dismiss the ground No.5 of the Revenue. 19. As regards ground No.4 of the assessee which relates to addition of Rs.4,31,957/- being advances as undisclosed investment of the assessee. The addition made by the Assessing Officer is based on notings on page-1 to 24 of Annexure-A/4 and on the ground that the assessee has already accepted that the figures written on the said pages are after removing 2 zeros from the figures and that the sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dit for purchases and the expenses and therefore gross profit addition cannot be made. As regards the argument of Ld. AR that sale belonged to M/s. B.D. Vakil & Co. is without any evidence on record. 25. We have heard the rival contentions and perused the facts of the case as per materials available on record, the sales belonged to the assessee which is evident from the seized material. The argument made by the Ld. CITDR has been found to be convincing that all the purchases and expenses have already been booked in the regular books of account and therefore gross profit addition cannot be the subject-matter as alternative argument made by Ld. AR. In the circumstances and facts of the case, we find no error in the order of Ld. CIT(A) who has rightly confirmed the action of the Assessing Officer. Thus, ground No.5 of the assessee is dismissed. 26. As regards ground No.6 of the Revenue which relates to addition of Rs.1,98,118/- being unaccounted sales. The addition has been made by the A.O on the ground that the total sales for the year April, 99 to March,00 is shown at Rs.2,70,35,562.70 as noted on page-1 of Annexure A/1/22 found and seized from the factory premises of the asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le to the extent of Rs.60,000/- as made by Smt. Meenu M Agawal and for initiating proceedings u/s.158BD in her case on the basis of said finding. The Assessing Officer has observed that page-4 of Annexure-A/1 shows notings regarding purchases of music system and colour television worth Rs.60,000/- in the name of Smt. Meenu M Agarwal. The AO has rejected assessee's explanation that the said assets are covered in the amount of Rs.90,000/-disclosed for household goods and valuales under VDIS by Manoj Agarwal as the assets are in the name of Smt. Meenu M Agarwal and she has not disclosed anything under VDIS and that even otherwise Shri Manoj D Agarwal has not identified the household goods and valuables in the VDIS disclosure. The Ld. CIT(A) directed the AO to treat the investment in question of Rs.60,000/- as made out of undisclosed income of the assessee and no separate addition was required to make. 32. We have heard the rival contentions and perused the facts of the case. We concur with the views of the Ld. CIT(A) that Assessing Officer has proceeded merely on the ground that the assets are in the name of Shri Meenu M Agarwal and have not attempted to verify the source of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has clearly been accepted by him that the notings in the said loose papers are in his handwriting and the same does not pertain to the assessee-company. Having said so, the said statement could not be controverted by the Assessing Officer and simply addition has been made without bringing any evidences on record. Even said Shri Kumbharam Jhat in his statement given the name of the parties to whom he has supplied the labour to which the said notings are pertaining, addition cannot be made in the hands of the assessee-company as unaccounted expenditure. The Director of the assessee-company has also explained as to how by mistake the said loose paper has been carried to his residence from factory and as a result, it was found from his residence. In the circumstances and facts of the case, the assessee having discharged its onus, therefore we find no infirmity in the order of Ld. CIT(A) who has rightly deleted the addition made by AO. Thus, ground No.7 of the Revenue is dismissed. 36. As regards ground No.8 of Revenue which pertains to addition of Rs.1.55 lakh as unaccounted salary to Shri Kiritkumar S Shah. The AO has observed that during the course of search at the residence of Sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the income and the investment and no evidence were found during the course of search suggesting utilization of such income elsewhere. 40. We have heard the rival contentions and perused the facts of the case. There is no dispute to the fact that the telescoping benefit can be given but when the assessee submitted a chart year-wise of the undisclosed income of each year, which has not been given for undisclosed income and expenditure/investment. In the circumstances and facts of the case, the AO is directed to allow the telescoping benefit , if any, as directed hereinabove but by affording an opportunity of being heard to the assessee. Thus, ground No.9 of the Revenue is allowed for statistical purposes. 41. As regards ground No.8 of the assessee with regard to charging of interest u/s.158BFA(1), it was argued by the Learned Counsel for the assessee that Xerox copies of loose papers were made available to the assessee at a very later stage during the assessment proceedings and therefore there was a delay in filing of the return of income. The Ld. CIT(A) confirmed the levy of interest by the Assessing Officer. 42. We have heard the rival contentions and perused the fact....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nst declared undisclosed income of Rs.68,350/-. The ld. CIT(A) while finalizing the appeal filed by the assessee, has restricted the undisclosed income to the tune of Rs.15,08,036/- treating the same as unaccounted sales incurred for making the undisclosed investment unearthed during the course of search. From the above, it can clearly seen that the assessee has intentionally concealed his particulars of income and the AO had correctly initiated penalty proceedings u/s.158BFA(2) of the Act. 4. From the above, facts, I am satisfied that the assessee has committed default within the meaning of provisions of section 158BFA(2) of the Act by concealing his income to the tune of Rs.15,08,036/-. Accordingly keeping in mind all the facts of the case, I impose a minimum penalty of Rs.9,22,917/- @ 100% of tax sought to be evaded as against @ 300% leviable of Rs.27,68,751/- under section 158BFA(@) of the Income tax Act, 1961." 45. The Ld. CIT(A) confirmed the action of Assessing Officer. 46. It was argued by Learned Counsel for the assessee that levy of penalty u/s.158BFA(2) is akin to Section 271(1)(c) of the Act and therefore there is no deemed concealment of the income. The....