TaxTMI 
TaxTMI 
2015 (10) TMI 1080
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....re that the assessee filed its return of income for AY 2009-10 on 31.08.2009 declaring income of Rs. 66,760/-. The return was processed under section 143(1) of the Act and thereafter selected for scrutiny under CASS and notice u/s 143(2) of the Act. The AO framed the assessment order under section 143(3) on 30th December, 2011 by making certain additions out of which, Revenue is in appeal on grounds mentioned above in para 1. 3. Ground No.1 relates to addition of Rs. 33,38,164/- made by AO u/s 69 of the Act in relation to untallied entries /credits /deposits /clearings as appearing in four bank statements shown by the assessee in its books and due to lack of satisfactory explanation/details AO made an addition of Rs. 33,38,164 under section 69 of the Act by observing as under :- "Therefore, it is seen that the details regarding credits/deposits/clearings as appearing in the four Bank statements are not tallied with all receipts shown by the assessee in its books. Hence it is not satisfactory reply for unexplained investment which proves the transactions made therein. In view of any satisfactory explanations/details, it is clear from the above comparison that a difference of Rs. 3....
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....rused the details furnished by the appellant and it is observed that the fund transfers as mentioned by the AO on page 6 of the assessment order are duly accounted for in the other bank account of the appellant. Otherwise also the funds transferred vide cheque has to be accounted for by the other bank. In view of these facts also the addition made by the AO is not tenable. 3.4 It is also observed that the impugned addition has been made by the AO u/s 69 of the IT Act. The provisions of sec.69 can be invoked if the following conditions are fulfilled :- (a) The assessee must have made investment in the financial year immediately preceding the assessment year; (b) The investments made are not recorded in the books, if any, maintained by the assessee or any source of income; (c) The assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not in the opinion of the AO satisfactory. Perusal of the assessment order reveals that the AO has not identified the investments made by the appellant during the year under consideration. This way the first precondition of section 69 is not fulfilled. The facts available on record clearly....
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....ce of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year." Section 69 comes into operation only if investments are not recorded in the books of account maintained by the assessee which is not the case looking to the facts of the assessee wherein the bank balances are shown in the audited balance sheet and reconciliation statement for various entries which were not tallied, as observed by AO but duly put on record before the lower authorities and also filed along with Paper Book. The relevant facts available on record clearly indicate that the non-reconciliation of entries/bank funds transfers which were actually forming parts of the books of accounts were the basis of addition made by the AO and further the AO has duly accepted that the bank accounts are forming part of books of accounts. The AO has himself recorded in his order that assessee has disclosed all the bank accounts in his regular books of account and only because of the reason that some of the entries would not tally at the time of hearing resulted into such a....
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....dering the submissions of assessee and contention of the AO, deleted the disallowance due to lack of finding on the part of AO to establish the facts and circumstances of such new plant and machinery to substantiate his finding. The observation of CIT(A) are as follows :- "4.2 I have carefully considered the rival contentions. I have also perused the evidences available on record. It is seen that the AO deputed his Inspector to make inspection of the machines. As a result of this inspection it came to the notice of the AO that the machineries looks like fresh and new one and the fresh look is not possible. If the repair and maintenance has been done on the machine. The very argument of the AO is not convincing. By mere look of machine, no reasonable person can reach to a conclusion that the machines were not repaired. The AO has allowed depreciation @15% on the machinery repair expenses of Rs. 15,27,309/-. If the AO's contention is taken as true then some new machinery should have been manufactured by incurring these expenses as the AO has allowed depreciation @ 15%. However, the AO had failed to establish the existence of such new plant and machinery. The other scenario could be ....
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....r is a serious offence. In Gujarat State the registering and supervising authority is Gujarat Boiler Inspection Department. Further, this boiler is required to be kept updated and maintained properly so that no untoward accident could take place. (2) During the year under consideration, the appellant firm had made additions to the boiler amounting to Rs. 11.24 lacs and the cost of the addition was debited to the Boiler Account. The details of Machinery repair expenses is enclosed herewith vide Annexure-C. It may kindly be appreciated that most of the expenses are less than Rs. 10,000/-. However, a few bills were more than Rs. 20,000/-. The depreciation of these entries/bills, clearly indicates that all the items purchased were consumables in connection with running and maintenance of the boiler, conveyor belt etc. (3) The steam generated from the boilers is used to get boiled rice. The parts of the plant which come into contact with steam easily get corroded and require frequent replacement. Further, scaling also takes place inside boiler and other places directly coming into contact with water because of presence of minerals/sales in water. For the purpose of de-scaling the boil....