AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 358
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....f unaccounted income from scrap sales. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that the Assessing Officer was not justified in estimating speed money expenses at Rs. 30,85,500/-. 3. On the facts and circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. 42,34,562/- made by the AO on account of value of transformer oil returned by the customers and not shown as closing stock. 4. On the facts and circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. 3,00,000/- made by the A.O. on account of allowance of unvouched business expenses. AY 2003-04 1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of Rs. 62,94,000/- made by the Assessing Officer on account of unaccounted income from scrap sales. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that the Assessing Officer was not justified in estimating speed money expenses at Rs. 46,37,000/-. 3. On the facts and circumstances of the case, the CIT(A....
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....g aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeals. 6. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. GROUND NO.1 OF ITA No.1929/Del/2012 (AY 2003-04) 7. Undisputedly, the assessee company has been making sale of scrap which has not been reflected in the books of account. It is also not in dispute that the assessee company has declared additional undisclosed income of Rs. 40,77,693/-, Rs. 1,99,79,532/- and Rs. 29,36,340/- for AYs 2005-06, 2006-07 & 2007-08 respectively. It is also not in dispute that the AO has made addition on account of scrap sale on the basis of estimation only by relying upon the statement of Subhash Chand Sharma. It is also not in dispute that assessee has offered an amount of Rs. 15,58,345/- for AY 2003-04 on account of scrap sale for taxation out of additional declared income. 8. In AY 2003-04, ld. CIT (A) has deleted the addition of Rs. 17,12,565/- out of total addition of Rs. 32,71,000/- made by the AO on account of unaccounted income....
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....asis of estimation but on the basis of incriminating material only, if any, seized during the search operation, which is undisputedly not there on the file for AY 2004-05. Reliance in this regard is placed on the decision rendered by Hon'ble jurisdictional High Court in case of CIT vs. Kabul Chawla - 380 ITR 173 (Del.). Operative part of which his reproduced below :- "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess ....
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....ing the search showing that assessee has made payment ranging from 0.8% to 2.5% of the project value in cash as speed money/bribe and thereby evidences of speed money of Rs. 10,00,000/- at many instances. In the absence of further detail provided by assessee as to making payment of speed money to various persons shown in the seized material, AO proceeded to estimate speed money paid by the assessee @ 0.75% of Rs. 41.14 crores, the sale figure of the transformers but has not made any separate addition as this amount is treated to have been paid out of unaccounted income generated from sales of scrap. 13. Ld. CIT (A) deleted the addition by providing the benefit of telescoping. However, when Annexure A-4-6 annexed with the assessment order is perused, it contains the details of various expenses and has been categorically mentioned the payment made in cash and at many places payment of Rs. 10,00,000/- as speed money is shown to have been made. Assessee himself furnished a consolidated utilization chart of the group to meet expenses like business expenses, household expenses, marriage expenses, speed money/bribe expenses etc. for AY 2003-04 to the tune of Rs. 2,13,43,320/- and has int....
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.... the assessee has not produced stock register showing returned quantity of transformer oil and the said sale made because of the fact that due to search and seizure operation their record was scattered. Merely because of the fact that assessment for the year under consideration as completed u/s 153A / 143 (3), particularly when incriminating material was seized on the basis of which different additions were made and the fact that the assessee has itself admitted the sale and then alleged return of the transformer oil in question, the ld. CIT (A) could not have arrived at the decision to delete the addition made by the AO. However, we are of the considered view that this issue is required to be remanded back to the AO to decide afresh on the basis of stock register and other necessary record to be produced by the assessee who shall be given adequate opportunity of being heard. So, ground no.3 of AY 2003-04 is determined in favour of the Revenue for statistical purposes. GROUND NO.4 OF ITA No.1929/Del/2012 (AY 2003-04) & ITA No.1930/Del/2012 (AY 2004-05) 18. So far as question of deleting the addition of Rs. 3,00,000/- by ld. CIT (A) made by the AO for AY 2003-04 is concerned, wh....