2014 (2) TMI 786
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....d in partly confirming the addition of Rs 13,62,259/- out of Rs. 20,00,000/- made by Assessing Officer on account of unexplained expenditure. 3. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming the action of Assessing Officer in making disallowance of Rs. 5,26,811/- u/s 40(a)(ia) of the Act. 4. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming the action of Assessing Officer in making disallowance of Rs. 1,58,216/- u/s 40A(3) of the Act. 5. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming the action of Assessing Officer in making disallowance of Rs. 30,200/- on account of donation. 6. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in partly confirming the addition of Rs 50,000/- out of Rs. 3,83,041/-made by Assessing Officer on account of various expense." Grounds of ITA No. 2634/Ahd/2009 (Revenue's appeal) "1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has er....
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....tement of Shri Bharatbhai choksi was recorded which also had been reproduced by the A.O. on page no.15. The assessee submitted his reply vide letter dated 26.12.2008 before the A.O. During the course of survey, the assessee had disclosed an additional income Rs.13,63,259/- for taxation purposes. The books of account maintained without proper supporting evidence. As found during the course of survey at 7/4622, Prakash Talkies Compound, Station Road, Surat, was inventoried as per Annexure 1 to 6, which were not impounded u/s. 133A of the IT Act by the A.O. The same has not been produced by the assessee at the time of assessment proceeding. Therefore, the A.O. rejected the book result u/s. 145 of the IT Act. 4. Being aggrieved by the order of the A.O., the assessee carried the matter before the CIT(A) who has confirmed the action of the A.O. for rejection books result u/s. 145 of the IT Act. 5. Now the assessee is before us. Ld. Counsel for the assessee contended that no specific defect has been pointed out by the A.O. before rejecting the book result. Thus, the A.O. was not right in applying the Section 145 in case of assessee. However, ld. Sr. D.R. supported the order of the A.O. ....
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....41/- is directed to be deleted." 9. Now the assessee is before us. Ld. Counsel for the assessee submitted that the modus operandi has been explained by the assessee during the course of survey proceeding as well as during the course of assessment proceeding. It is true that assessee maintained manual cash book and after sometime cash book on computer was mentioned on the basis of actual expenditure voucher received by it. These facts had been admitted by the partner in the statement recorded after dated of survey u/s. 131 of the IT Act. On that basis, the assessee has surrendered additional income of Rs.13,62,259/-. The ld. Sr. D.R. supported the order of the A.O. and submitted that the ld. A.O. reasonably estimated the income on the basis of discrepancy found during the course of survey proceeding. 10. We have heard the rival contentions and perused the material on record. The assessee made this disclosure voluntary and ld. A.O. had not brought on record any evidence for estimating income at Rs.20,00,000/-. The difference into cash book worked out to Rs.13,62,259/-. Therefore, CIT(A) was right in upholding the addition of Rs.13,62,259/-. Accordingly, the second ground of assesse....
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.... been estimated u/s. 144 but determined after detailed scrutiny of the impounded documents as well as statement of the partner. The case laws cited by the assessee are not squarely applicable. Thus, this ground of assessee's appeal is dismissed. 15. Ground no.4 of assessee's appeal is against confirming the action of A.O. in making disallowance of Rs.1,58,216 u/s. 40A(3) of the Act. The A.O. found that assessee incurred the expenditure in cash on various dates to the tune of Rs.7,91,080/-. Therefore, he disallowed 20% on above expenses at Rs.1,58,216/-. On appeal, ld. CIT(A) held that the assessee could not explain the reasons to make cash payments. Thus, he confirmed the addition made by the A.O. Before us, ld. A.R. for the assessee simply argued that when the A.O. made estimation of income, the other disallowance cannot be made by the A.O. but already held that the A.O. scrutinized the impounded documents and considered the statement of the partner and assessed the income on the basis of scrutiny of the impounded documents. Thus, we also confirm the order of the CIT(A) and dismiss the assessee's appeal on this ground. 16. Ground no.5 of the assessee's appeal is against confirmi....
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.... CIT(A) deleted the addition by observing as under: "I have carefully considered the submissions made by the appellant and also the reasons given by assessing officer. After carefully going through the same, I am unable to understand as to how such addition can be made for the alleged difference by holding that the same represents unexplained cash introduced in the books of account. This is so because assessee has already shown cash balance of Rs. 45,27,670/- in the audited balance sheet as on 31.03.2005. As against this, cash balance as on 01/04/2005 in the manual cash book found during the course of survey is only Rs. 3,99,493/- i.e. the same is much lower then the cash balance which is already shown in the books of accounts. Now when the balance as per manual cash book is much lower than the balance as per the audited books of account, there is neither any case of introduction of any unexplained cash in books of account for the year under consideration nor the case of any inflation in expenditure. Apart from this, it is also seen that assessee has also given reasonable explanation for maintaining two sets of cash book and assessing officer has also failed to give any cogent rea....