TaxTMI 
TaxTMI 
2015 (12) TMI 970
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in deleting addition of Rs. 23,63,243/- on account of unexplained expenditure under head "wages" without appreciating the fact that the assessee failed to furnish any documentary evidence that the list of workers prepared during the search contained the names of the workers working in the sister concern of assessee i.e. M/s Aggarwal Wood Industries? ii) Whether as per law and in the facts and circumstances of the case, the Hon'ble ITAT is justified in deleting addition of Rs. 3,35,405/- on account of income of Smt.Meena Garg, Prop. of M/s Punjab Timber Trading Company being treated as income of the assessee on substantive basis considering that the AO has given clear finding that during the search, Smt.Meena Garg refused of doing any timber business when her statement was recorded under oath? Iii) Whether as per law and in the facts and circumstances of the case, the Hon'ble ITAT is justified in deleting addition of Rs. 70,33,524/- on account of difference in valuation of building on the basis of report of the valuation officer without appreciating the fact that the assessee failed to substantiate the source of the said income from which unexplained expen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ises i.e. M/s Punjab Plywood Industries and adjoining sister concern M/s Aggarwal Wood Industries. The assessee did not furnish any documentary evidence during the course of assessment proceedings that the list in dispute also included the workers working in M/s Aggarwal Wood Industries. Thus, amount of Rs. 23,63,243/- was computed as unexplained expenditure on labour and added back to the total income of the assessee vide assessment order dated 30.12.2008, Annexure A.1. The assessee went in appeal before the CIT(A)(C). Vide order dated 24.10.2013, Annexure A.2, the CIT(A)(C) dismissed the appeal. The assessee approached the Tribunal. The Tribunal allowed the appeal holding that the facts and circumstances of the present issue were identical to the facts and circumstances in the issue raised in the assessment year 2001-02 in the case of the assessee and allowed the claim of the assessee and deleted the addition on this issue. ii) Addition o f Rs. 3,35,405/- on account of benami Concern being run in the name of Smt.Meena Garg: During the search, it was found that a proprietary concern namely M/s Punjab Timber Trading Co. of Smt.Meena Garg wife of Shri Naresh Garg who is one of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....On appeal by the assessee, the CIT(A)(C) allowed further benefit of 10% of Rs. 78,15,026/- in view of the fact that some expenditure was admittedly incurred in assessment years 2001-02 and 2003-04 whereas the Assessing Officer added the entire amount in this year. The assessee filed Appeal No.1171/CHD/2013 regarding sustaining of additions by CIT(A)(C) including addition of Rs. 70,33,524/- on this count whereas revenue filed appeal No.1190/CHD/2013 against the order of CIT(A)(C) allowing partial relief to the assessee. The Tribunal disallowed the appeal of the department whereas the appeal of the assessee was partly allowed and the addition of Rs. 70,33,524/- sustained by CIT(A)(C) was also deleted following the judgment of the Apex Court in Sargam Cinema vs. CIT, (2010) 328 ITR 513. iv) Addition o f Rs. 10,98,211/- on account of difference in stock: During the course of search, it was found that stock as per books was Rs. 2,76,77,856/- whereas as per physical verification by the search team, the stock was found to be worth Rs. 1,94,20,630/-. The assessee was asked to show cause as to why GP on the difference of stock of Rs. 82,576,226/- should not be added to the income of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n and worked out the ratio of 1:19.6 and computed the expenditure for assessment year 2001-02 at Rs. 4,50,241/- and made an addition of Rs. 2,67,443/-. Similar addition has been made in assessment years 2002-03 to 2006- 07. 12. The plea of the assessee before us was two folds that first of all the discrepancy,if any, in the number of workers detected under survey at the premises of the assessee on 9.9.2004 could not be utilized for computing unexplained expenditure on account of wages while completing the assessment under section 143(3) read with section 153A of the Act pursuant to search carried out at the premises of the assessee on 20.3.2007. The second plea raised by the learned AR for the assessee before us was that the list of the workers prepared by the survey team comprised of the workers of sister concerns and merely because the assessee had not pointed out the said fact during the course of survey, does not change the fact situation. We find merit in the plea of the assessee in this regard. First of all, the assessment in the case has been completed under section 143(3) read with section 153A of the Act vide order dated 30.12.2008. The said assessment was made pu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the same. The grounds of appeal raised by the assessee are thus allowed." On Issue No.(ii) "The issue in ground No.2 raised by the assessee on account of addition of Rs. 3,35,405/- being income of Smt.Meena Garg, proprietary of M/s Punjab Timber Trading Company. The facts, circumstances and issue raised vide ground No.2 is identical to the ground No.2 raised in assessment year 2002-03 and following the same parity of reasoning we find no merit in the said addition. We direct the Assessing Officer to delete the addition of Rs. 3,35,405/-. The ground of appeal No.2 raised by the assessee is thus allowed." The Tribunal had followed the reasoning for the assessment year 2002-03 which is as under:- "18. We have heard the rival contentions and perused the record. The Tribunal in ITA Nos.115 to 1170/Chd/2013 in the case of Smt.Meena Garg relating to assessment years 2002-03 to 2007-08, vide order dated 26.2.2014 have held that the income arising from M/s Punjab Timber Trading Company was the sole proprietary concern of Smt. Meena Garg, consequent to which the income arising from the said concern was to be assessed in the hands of Smt.Meena Garg. The learned ....