TaxTMI 
TaxTMI 
2016 (6) TMI 684
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....ade by the AO to Rs. 10,57,940/- holding that the NP rate of current year is better as compared to earlier year ignoring various factors considered by the AO before making the addition, including the fact of disclosure made by the assessee, its failure to adduce evidence to substantiate expenses of much higher amount and specific facts in respect of certain concerns, payments to whom were admittedly used by the assessee to inflate expenses. 3. On the facts and in the circumstances of the case the Id. CIT(A) has erred in appreciating the fact that the disallowances made u/s 37(1) of the I.T. Act was proper and in accordance with the provisions of the Act, in the absence of any evidence to prove otherwise. 4. Without prejudice to the above grounds, on facts the ld. CIT(A) has also erred in not confirming addition even to the extent of undisclosed income admitted by the director of assessee company in his sworn statement u/s 132(4) of the I.T. Act but not shown in the return of income i.e. Rs. 1.97 crore, though it has not even given basis of inclusion of unaccounted income of Rs. 1 crore in the return of income also." 2. The assessee filed return on 29/09/2009 declaring total....
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.... The requisite details furnished by the assessee does not show that the commission paid for the service rendered by them. Further advertisement commission paid from person to person was varied from person to person. The material purchased was claimed on the basis of self made vouchers. In audit report also, the Auditor had commented that "We have obtained all the information and explanations excepting few supporting and evidences of expenditure, which to the best of our knowledge and belief were necessary for the purpose of our audit." 2.1 On this basis/defects pointed out by the Assessing Officer, he proposed to rejection of books of account U/s 145(3) of the act. He further held that statement of Shri Ballabh Das Maheshwari recorded during the search U/s 132(4) of the Act on 07/8/2008. In reply to question Nos. 13 and 14, he had admitted that expenses had been inflated in their concerns namely Shakun Advertising Pvt. Ltd., N.S. Publicity Agencies, SGM Communication and M/s Lead etc.. The ld. Assessing Officer has reproduced question No. 13 and 14 on page No. 4 and 5 of the assessment order. Similar admission was made by Shri Ballabh Das Maheshwari in reply to question No. 9, whi....
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....m Enclave, C-Scheme, Jaipur. The income offered to tax of Rs. 1.00 crore to take care of the unaccounted investment in said house property. Since the assessee had claimed that surplus fund generated on account of booking bogus expenses were applied for investment in construction of house property. Thus, he made addition of Rs. 2.00 cores in the income of the assessee. 3. Being aggrieved by the order of the Assessing Officer, the assessee the matter before the ld CIT(A), who had partly deleted the addition by observing that the appellant had surrendered additional income only Rs. 1.00 crore in the return, though during the search, total disclosure was Rs. 2.97 crores. As regards the retraction from the surrender, the appellant's case is that the addition cannot be made on the basis of sole statement of assessee and unless the statement was substantiated by any material gathered during the course of search. The appellant even confronted that statement of one Director was recorded by the search team by stating wrong fact of alleged statement of one Shri Ravi Chapperwal of M/s Sixth Sense Communications recorded during survey at their premises at Mumbai inasmuch as Shri Chapperwal cle....
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....vidences, no addition can be justified. However, he confirmed the application of provisions of Section 145(3) of the Act by relying on the various decisions. Thereafter, he confirmed the addition of Rs. 10,57,940/-. 4. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the Assessing Officer and argued that the statement recorded U/s 132(4) has evidentiary value under the Income Tax Act. This group has surrendered additional income on account of inflated expenses, therefore, this year also, the assessee should honour the disclosure made by the Director of the company during the course of search. Number of incriminating documents were found during the course of search, on which this disclosure was made but later of the assessee had retracted partly from the disclosure. . 5. At the outset, the ld AR of the assessee has reiterated the arguments made before the ld CIT(A). He further submitted that there was a disclosure U/s 132(4) by the Directors but which was given in the background of statement recorded by Shri Ravi Chapperwal, proprietor of M/s Sixth Sense Communications during the course of survey, conducted on business premises at Mumbai. He ....