TaxTMI 
TaxTMI 
2019 (5) TMI 844
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....al expenses of Rs. 5,42,704/-. In the absence of original bills or vouchers, the AO made disallowance @15% amounting to Rs. 81,405/-. The ld. CIT(A) confirmed the additions apart from upholding the initiation of re-assessment proceedings. Aggrieved thereby, the assessee has come up in appeal before the Tribunal. 4. We have heard both the sides and gone through the relevant material on record. In sofaras the first addition is concerned, the AO has reproduced the reasons recorded prior to issue of notice u/s.148 of the Income-tax Act, 1961 (hereinafter also called 'the Act') in the assessment order itself. It has been recorded in such reasons that "It was also observed by the Investigation Wing that the assessee has taken opening capital balance as on 01-04-2008 at Rs. 23,29,401/- as against the closing balance on 31-03-2008 at Rs. 19,29,401/-. The excess capital balance of Rs. 4.00 lakh has been taken by the assessee." From the above reasons, it is apparent that the AO referred to the excess capital shown by the assessee as on 01-04-2008 by Rs. 4.00 lakh which formed the basis for the addition. Instantly, we are considering the A.Y. 2008-09 covering the period 01-04-2007 to 31....
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....e existence of the former is a pre-condition for taxing the latter. To put it simply, if the grounds set out in the re-assessment notice are nonexistent, i.e., either no addition is made on such grounds or the addition so made does not finally pass the scrutiny by the appellate forums, then, obviously, no further addition can be made for income which comes to his notice during the course of proceedings u/s 147. Without there being such a deterrent, the AO could have got unhindered powers to initiate re-assessment at the drop of a hat without any legally sustainable reasons and then made other additions resulting in multiplicity of proceedings, which the legislature has sought to curb. Any lawful jurisdiction to make addition on account of other incomes coming to the notice of the AO during the course of proceedings u/s 147 can be acquired only on the foundation of a validly acquired jurisdiction on legally sustainable items of income escaping assessment forming reasons for issuing notice u/s 148. In other words, if the AO fails to acquire a valid jurisdiction to make re-assessment on the basis of his reasons, then, he is also debarred for making additions for other incomes chargeab....
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....o challenged the initiation of re-assessment proceedings on the ground that the AO failed to obtain sanction before the issue of notice u/s.148. In this regard, the ld. CIT(A) has recorded on page 8 of the impugned order that notice u/s.148 was issued on 15-03-2016 which is within a period of four years from the end of the relevant assessment year and further no scrutiny assessment was done earlier. He further observed that the requirement of approval is only when there is previous scrutiny assessment and the period of more than four years from the relevant assessment year has elapsed. The ld. AR could not point out any infirmity in the raison d'etre given by the ld. CIT(A). We, therefore, refuse to interfere in the impugned order to this extent. 12. Another legal ground raised by the assessee is against not passing a separate order to the objections taken by the assessee against the initiation of re-assessment. In this regard, it is observed that notice u/s.148 was issued on 15-03-2016 which was served on 16-03-2016. No reply was filed in response to notice u/s.148. It is not coming either from the assessment order or from any other material that assessee raised any objection t....
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....ts are otherwise. Page 8 of the paper book is a composition of the surrendered income of Rs. 25.00 lakh, which comprises of three items, namely, Rs. 4,21,500/- towards excess salary claimed; Rs. 1,76,365/- towards the amount paid for Advertisement charges without deduction of tax at source and the resultant application of section 40(a)(ia) of the Act; and suppressed receipts of Rs. 18,84,750/-. Statement of assessee was recorded at the time of survey, a copy of which is available on page 29 onwards of the paper book. Through question no. 10, the assessee was called upon to state the number of employees working with him along with the salary paid. He submitted that two persons were working with him during the period relevant to the assessment year under consideration and the salary paid to them was to the tune of Rs. 3.00 lakh. The survey team examined the Profit and loss account of the assessee for the year under consideration and found that there was a debit of salary for a sum of Rs. 7,21,500/- This fact was confronted to the assessee vide question no.29 and he was requested to explain as to why the excess salary of Rs. 4,21,500/- (Rs. 7,21,500 as claimed in the Profit and loss a....
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.... making such addition at Rs. 25.00 lakh. To this extent, that is, Rs. 17,385/-, the surrender is not backed by any evidence and the same cannot be acted upon. We, therefore, reduce the addition to Rs. 24,82,615/-. 20. In the result, the appeal is partly allowed. A.Y. 2014-15 : 21. The only issue raised in this appeal is against the confirmation of addition of Rs. 50.00 lakh made by the AO towards surrender made by the assessee during the course of survey but not offered for taxation. 22. The facts of this issue are that certain material was found during the course of survey which transpired that the assessee had earned certain income which was not offered for taxation. When confronted, the assessee offered additional income of Rs. 50.00 lakh for the year under consideration. The same was thereafter retracted and not included in the total income. The AO finalised the assessment by including such amount of Rs. 50.00 lakh in the total income, which came to be sustained in the first appeal. The assessee is aggrieved by the confirmation of the addition. 23. Similar to the preceding year, we find that the surrender of Rs. 50.00 lakh is properly documented and based on t....