TaxTMI 
TaxTMI 
2018 (11) TMI 1429
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....g disallowance of Rs. 53130/- held to be expenses of personal nature by the Assessing Officer." 3. The brief facts of the case are that there was a search under section 132 of the income tax act on Raj Darbar group of companies and its associates. Certain documents belonging to the assessee were seized, notice under section 143 (2) of the act was also issued on 30/8/2010. During the current year as it is stated that the assessee has closed its business along with his two proprietary concerns and incurred losses due to the fixed expenses to be incurred by the assessee in respect of current assessment year. The assessee has filed his return of income on 30/8/2010 declaring an income of Rs. 2977830/-. 4. During the post-search proceedings the assessee vide his letter dated 26/9/2008 addressed to the Deputy Director Of Income Tax (Investigation) Unit - II, New Delhi made an offer to surrender Rs. 35 lakhs as undisclosed income of the assessee for assessment year 2009 - 10. In the said letter, the assessee submitted that surrender of Rs. 35 lakhs in the hands of the assessee is made for assessment year 2008 - 09 and Rs. 2 lakhs for the financial year 2007 - 08 to cover up the shortfal....
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....er section 143 (3) of the act was passed on 21/12/2010 determining the total income of the assessee at Rs. 5231684 against the returned income of Rs. 2977830/-. 6. Aggrieved, assessee preferred appeal before the Commissioner of income tax appeals, who deleted the addition of Rs. 1 787823/- on account of unexplained jewellery by granting the relief on account of CBDT instruction number 1916. None of the parties is aggrieved with it. However, He confirmed the addition of the addition of Rs. 2 lakhs because of difference in the disclosure of Rs. 35 lakhs and Rs. 33 lakhs disclosed in the return of income as undisclosed income. He also upheld the disallowance of the losses of the proprietary concern of Rs. 209901/- as the businesses have been closed down. He also confirmed the disallowance of Rs. 56130 because of expenses debited on personal nature. Therefore assessee is aggrieved with the order has preferred an appeal before us. 7. The first ground of appeal is with respect to the confirmation of the addition of Rs. 2 lakhs being the difference between the income surrendered and the income shown in the return of income. 8. The learned authorised representative submitted that the su....
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....ere were no machineries with him, however the department found Guthka making machinery being operated with generator sets and raw materials as well as finished goods in the appellant's premises. In the statement dated 17/12/2000 , date the assessee admitted that he was not only having the such machinery but also surrendered Rs. 35 lakhs towards investment in the machinery and unaccounted income from the said activity for assessment year 2009 - 10 and Rs. 2 lakhs for assessment year 2008 - 09. This was also confirmed by submitting a letter dated 26/9/2008. Assessee also did not submit in the letter that why is he disclosing income and its application both. Further, the assessee has also disclosed major sums for miscellaneous income for which no break up was given. Assessee has never explained his disclosure before ld AO. For the reasons given by the learned commissioner Appeals in para number 4.3.5 also we are not inclined to interfere in the orders of the lower authorities and therefore the addition of Rs. 2 lakhs is confirmed. Accordingly, ground number one of the appeal of the assessee is dismissed. 11. The second ground of appeal is against the confirmation of the disallowance....
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....the business existence of the same two proprietary concern but also deleted addition,. Further in this year it was found that machineries of Guthka were running in business premises of the assessee on generator, these two facts goes a long way to show that the business of the proprietary concern is not closed. Further in this year, business income is taxed as a part of disclosure, then where from these income is generated other than these two proprietary business of the assessee, is not shown. It is also unfair to tax the income as business income, and not to grant benefit of losses resulting out of expenses of that income. In view of this, we are not inclined to uphold the orders of the lower authorities and therefore we direct the learned assessing officer to allow the loss of Rs. 209901 because of business losses of the proprietary concern. In the result ground number two of the appeal of the assessee is allowed. 15. Ground number three of the appeal is against the disallowance of Rs. 5 6130 because of expenses of personal nature. 16. The learned authorised representative submitted that addition has been made by the learned assessing officer mentioning them to be the expenses....
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....AAA of Rs. 3.5 lakhs by the learned Deputy Commissioner Of Income Tax, Central circle - 05, New Delhi vide order dated 24 /6/2011 is confirmed. Aggrieved with that order assessee has raised the following ground of appeal in ITA No. 2130/Del/2015:- "1. The ld CIT(A) has erred on facts in law in confirming the penalty of Rs. 3,50,000/- under section 271 AAA of the Income Tax Act, 1961. 2. The ld CIT(A) has erred on facts and in law in holding that the entire surrender was made by the appellant on account of incriminating evidences found during the course of search. 3. The ld CIT(A) has erred on facts and in law in not appreciating the provisions of Section 271AAA of the Income Tax Act, 1961 and has further erred in ignoring several rulings of the higher judicial authorities without ascribing any reasons." 21. The brief fact shows that during the course of search and seizure the assessee has disclosed and surrendered income of Rs. 35 lakhs on 31/7/2008. Accordingly the assessment under section 153A of The Income Tax Act 1961 was passed on 21/12/2010 at a total income of Rs. 5231684/-. The amount of disclosure has been included to the extent of Rs. 33 lakhs in the return of inco....
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....ties. Admittedly, the assessee has disclosed the sum of Rs. 35 lakhs during the course of search. However, it was not shown by the revenue that whether the assessee was given an opportunity to explain the source of the undisclosed income and specify the manner in which the undisclosed income, surrendered during the course of search, had been derived. Therefore, the issue is squarely covered in favour of the assessee by the decision of the honourable Delhi High Court in case of principal CIT vs Emirates Technologies Private Limited (ITA 400/2017 dated 18/7/2017). Identical view has also been taken by Honourable Gujarat High court in [2017] 398 ITR 170 (Guj) Principal Commissioner of Income Tax v. Mukeshbhai Ramanlal Prajapati and [2018] 401 ITR 488 (Guj) Principal commissioner of Income Tax v. swapna Enterprise. Recently Honourable Delhi High court in case of Bhavi Jindal in Income Tax Appeal No. 973/2018 dated 13/9/2018 has held as under :- "9. Plea and contention of the Revenue in the present appeal is to the effect that the statement made under Section 132(4) did not indicate and state the manner in which the undisclosed income was derived. This is different from the ground an....