TaxTMI 
TaxTMI 
2020 (9) TMI 577
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....om house agent and filed its return of income on 23-09- 2016 for the year under consideration declaring total income at Rs. 69,82,640/-. The assessee belongs to Ramesh Chand Manihar Group, Jaipur on whose premises a search u/s 132 of the Act was carried out on 7-01-2016. Various assets/books of account and documents were found and seized as per annexure prepared during the course of search. Finally, the AO completed the assessment u/s 143(3) r.w.s. 153B(1)(b) of the Act vide order dated 28-12-2017 at a total income of Rs. 73,52,425/- as against returned income of Rs. 69,82,640/-. The AO also made an addition of Rs. 18,315/- on account of disallowance of interest on TDS. 2.2 Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A) who after considering the facts and circumstances of the case, dismissed the appeal filed by the assessee. 2.3 Now aggrieved by the order of the ld. CIT(A), the assessee preferred the present appeal before us on the grounds mentioned hereinabove. 3.1 The Ground No. 1 of the assessee relates to challenging the order of the ld. CIT(A) in sustaining the addition of Rs. 3,51,470/- made by the AO on account of unaccounte....
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.... as on search 12,97,597 Less:- Cash paid to Sanjay Pareek not recorded in books found at the time of search 18,467 Less:- Cash paid to Sunil Kumar Sharma not recorded in books found at the time of search 57,500 Less :- cash stolen as stated in search statement 5,00,000 -5,75,967 Combined Cash Balance as per Books of account worked out by AO 7,21,630 Combined Physical cash assessee + The Cargo 10,73,100 Addition made for excess cash 3,51,470 iii) Cash of Rs. 5,93,700/- found from G-8 Ratan Sagar, is not premise belonging to this assessee:- The ld. AO treated the whole cash found i.e. Rs. 5,93,700/- from G-8, Ratan Sagar as belonging to assessee. It is relevant to mention here that the premises "G-8, Ratan Sagar, MSB Ka Rasta, Johari Bazar, Jaipur does not belong to the assessee. This premise belong to another sister concern of assessee "M/s The Cargo Company". The copy of impounding order prepared by the survey party for this premises is at PB Page No. 24-28. In the assessment order the ld. AO treated the cash amounting to Rs. 5,93,700/- found from this premises be....
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....y ld CIT(A) deserve to deleted.'' 3.3 On the other hand, the ld. DR relied on the orders passed by the Revenue authorities. 3.4 We have heard the ld. counsel for both the parties and we have also perused the materials placed on record, judgements cited by the parties as well as the orders passed by the Revenue authorities. Before we decide the merit of this ground, it is necessary and imperative to analyze the order passed by the ld. CIT(A). While deciding this ground, the ld. CIT(A) has dealt with this ground in para 6 to para 8 of the impugned order, however, the operative portion is contained in para 8 of his order which is reproduced below. ''8. With respect to addition of Rs. 3,51,470/-, the AO has given credit for the cash as per books including claim of Rs. 50 lakhs stolen from the premises. The submissions made by the ld.AR that it belongs to 3rd party, belong to temple in the building and being kept by partner is devoid of merit as nothing like this was stated during the course of search or before the AO. On the facts and in the circumstances of the case, the addition of Rs. 3,51,470/- is confirmed. Appellant's Ground No. 2 is dismissed.'' After having....
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....anjay Pareek not recorded in books found at the time of search 18,467 Less:- Cash paid to Sunil Kumar Sharma not recorded in books found at the time of search 57,500 Less :- cash stolen as stated in search statement 5,00,000 -5,75,967 Combined Cash Balance as per Books of account worked out by AO 7,21,630 Combined Physical cash assessee + The Cargo 10,73,100 Addition made for excess cash 3,51,470 The AO treated the whole cash found i.e. Rs. 5,93,700/- from G-8, Ratna Sagar, whereas it was categorically submitted by the assessee that the above premises does not belong to him and the same belongs to another sister concern of the assessee i.e. M/s. The Cargo Company. The copy of the impounding order prepared by the survey party for this premises is also placed on record at PB Page No. 24 to 28. However, the AO treated the cash of Rs. 5,93,700/- found from this premises belonging to the assessee whereas as per search statement of director of assessee a sum of Rs. 1.50 lacs out of sum of Rs. 5,93,700/- belongs to the assessee and according to this categorical statement the balance cash amounting to ....
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....d Ms. Khusboo Singh whose statements were referred by the AO in the assessment order. Therefore, there is no material on record to indicate that the cash of Rs. 2,59,140/- was found at 203, Ratna Sagar, MSB Ka Rasta, Johri Bazar, Jaipur belongs to the assessee. It is also not in dispute that the premises at 203, Ratna Sagar, MSB Ka Rasta, Johri Bazar, Jaipur does not belong to assessee but it belongs to the other sister concern of the assessee. The assessee explained the source of cash as belongs to M/s. Adventure Global Tour LLP and also produced the cash book of the said concern to show the availability of cash with the said LLP. Once there is no incriminating material to show that the cash of Rs. 2,59,140/- found at 203, Ratna Sagar, MSB Ka Rasta, Johri Bazar belongs to the assessee and the said premises was not the business premises of the assessee and the assessee has explained the source of cash belongs to M/s. Adventure Global Tour LLP whose business premises is situated at 203, Ratna Sagar, MSB Ka Rasta, Johri Bazar, then in the absence of any contrary fact or material, the said explanation of the assessee cannot be brushed aside. Accordingly, in the facts and circumstances....
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....dgment is reproduced below:- "The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the said view the High Court has placed reliance on its Full Bench's decision in Saraya Sugar Mills (P.) Ltd. v. CIT [1979] 116 ITR 387 (All.) The learned counsel appearing for the appellant-assessee states that the said judgment of the Full Bench has been reversed by the larger Bench of the High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732 (All.) (FB), wherein it has been held that interest on arrears of tax is compensatory in nature and not penal. This question has also been considered by this Court in Civil Appeal No. 830 of 1979 titled Saraya Sugar Mills (P.) Ltd. v. CIT decided on 29-2- 1996. In that view of the matter, the appeal is allowed and question Nos. 1 and 2 are answered in favour of the assessee and against the revenue." iii) The above principles can be applied to the interest expenses levied on account of delayed payment of TDS, therefore the same is allowable to the assessee. iv) Further Hon'ble ITAT K....
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....sion of ITAT Mumbai Bench in the case of DNV GL AS (Formerly known as DET Norske Veritas AS) vs ADIT (International Taxation) (ITA No.4687/Mum/2016 dated 31-05-2017) wherein it was held as under:- ''3. We have heard the rival contentions and gone through the facts and circumstances of the case. Brief facts are that the AO perusing the profit and loss account noticed that the assessee has paid an amount of Rs. 73,923/- being interest on delayed payment of TDS and he required the assessee to explain as to why the same should not be disallowed. The assessee claimed that the TDS relates to payment to various traders and the same in connection and for the purpose of business. The AO noted that this amount is incurred on delayed payment of TDS and TDS being tax on income and same cannot be allowed as business expenditure under section 37(1) of the Act. Accordingly, the same was disallowed. Aggrieved, the assessee preferred the appeal before CIT(A). The CIT(A) confirmed the action of the AO by observing as under:- '' considering the submissions made by the assessee and the reasons recorded by the AO & based on the above discussion and facts of the case, I am of ....