TaxTMI 
TaxTMI 
2018 (10) TMI 781
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....- "On the facts and circumstances of the case, the ld. CIT(A) has erred in law and on facts in directing the Assessing Officer to verify and allow those expenses which have been incurred in cash and are recorded in the books of account without taking into account the provisions of section 40A(3) of the Income Tax Act, 1961." 2. The facts in brief are that the assessee is an individual deriving income from salary as Director of M/s. Gahoi Builwell Ltd. (now V3S Infrastructure Ltd.); share from a partnership firm, M/s. K4U Services, rental income, etc. A search and seizure action u/s.132 was carried out on 19.01.2009 in Kurele Group and also at the residential premises of the assessee. The main dispute in the Revenue's appeal is w....
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.... Rs. 37,81,800/- as unexplained misc. expenses which has been treated by him as unexplained expenditure out of undisclosed sources. 5. Before the ld. CIT (A), it was submitted that all the transactions recorded in the seized loose paper stood reflected in the books of M/s. K4U services, wherein the assessee was one of the partner which is also evident from the ledger account of the said firm despite that addition has been made in the individual hands of the assessee by the Assessing Officer in the following manner:- Receipts of funds during the year (as per page 2 of assessee order) Deduct: Rs.39,70,000 Utilization of funds during the year (as per page 2-3 of assessment order) Rs.90,86,912 Excess payment of funds Rs.51,....
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....ry was raised by the Assessing Officer in the case of the said company and Assessing Officer after detailed scrutiny and examination found that entries appearing in the loose paper were tallying with records maintained by the said company. Based on these findings, Assessing Officer first of all noted the assessee's reply with regard to both seized documents as under:- 6. PX-2/Annexure A-3 page 144 Noting/summary of transactions relating to Indrapuram Project of GBL Gahoi Buildwell Ltd. This does not relates to me 7. PX-2/Annexure-3 page 145 Noting of various transaction of Vinay Kumar Kurele Vinay Kurele These transactions are appearing in the various accounts of K4U Services wherein Vinay Kurele is partner, co....
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....ssing Officer to allow the expenses which has been incurred in cash and are recorded in the books of account without taking into account the provision of Section 40A (3). The said ground raised first of all is completely divorced from the finding given in the impugned orders, because the addition has been made as unexplained expenditure/payment outside books of account for which addition has been made by the Assessing Officer. There is no such disallowance made u/s 40A (3) made by the Assessing Officer which has been claimed by the assessee as an expenditure out of the income disclosed by him. Thus, the very basis on which the ground has been raised is erroneous as application of Section 40A (3) was never a dispute. Be that as it may be, it....