TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 1081
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....eipts, thus it tantamount to double taxation of the same. Therefore, the addition so confirmed by ld. CIT(A) on the very same papers deserves to be deleted.'' ITA No.630/JP/2019 - Revenue ''1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in deleting the addition of Rs.22,11,97,623/- made by AO on account of undisclosed toll receipts as per seized documents. 2. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in considering only G.P. Rate while the entire amount of toll receipts were unaccounted. 3. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in directing the revised return of assessee for this year wherein the income was reduced by Rs.1,37,31,490/-. However, the tax audit was made before foiling original return of income which has been ignored by the ld. CIT(A)'' Brief facts of the case are that the assessee, a private limited company, is engaged in activity of collection of toll from the commercial vehicles entering in the state of Delhi. The assessee company filed original return of income at Rs. 4,46,36,280/- and t....
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....es. Accordingly, evidences of receipts as well as expenses both are clearly appearing and visible in these pages for the aforesaid period on day-to-day basis. For the remaining period, no record of day-to-day toll receipts of different specific toll naka and simultaneously also no record for expenditure incurred was seized. However, it is only the summary sheet of the receipts of the various months which were seized by the authorized officers and at that time corresponding details of expenditure were not seized. Merely because of these circumstances, it cannot be said that no expenditure was incurred for earning these unrecorded receipts. Considering the various decisions cited by the ld. AR and facts as well as circumstances of the case, the ld. CIT(A) held that unrecorded receipts cannot be added in toto as income of the assessee and the only the profit embedded therein need to be added, which was estimated by ld. CIT(A) at 8% considering the past records and profit results of the assessee company, which comes to Rs. 3,14,08,494/-. However, ld. CIT(A) also observed that he is not inclined to give benefit of telescoping of Rs. 14 crores so offered by the assessee in its return of ....
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....ds were not part of the seizure and merely because such expenses were not taken as part of the seized document, it cannot be said that no expenses were incurred on earning the unrecorded receipts. Accordingly ld. AR argued that finding of the ld. CIT(A) is correct to the extent that unrecorded receipts cannot be directly added as unrecorded income and it is only the profit element embedded therein which need to be considered. 5. On the other hand, the ld. DR contended that the books of accounts of the assessee were duly audited and assessee has failed to demonstrate as to which of the expenses found recorded in the seized documents and were not recorded in the books of accounts nor any such details were produced before the AO therefore action of the AO in making addition of the entire undisclosed receipts is correct. Accordingly he placed full reliance on the order of AO. 6. We have considered the arguments of both the sides and perused the material placed available in record including the paper books filed by the assessee. It is settled legal position that unrecorded receipts found during the course of search or otherwise cannot be just added in toto and it cannot be considered ....
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....On careful consideration of the argument of ld. AR and order of ld. CIT(A) it is seen that the appellant is in business of toll collection and during the course of search evidence of under recording of toll collection was admittedly found. The appellant has offered net profit of Rs. 14 crores in its return filed in response to notice u/s 153A and has stated it is earned out of its under recorded toll collection business. The ld. CIT(A) has rightly estimated the income from such unrecorded toll collection receipt @ 8% of the unrecorded receipts at Rs. 3,14,08,494/-. However, there is no merit in the finding of the ld. CIT(A) that this amount is to be added separately and no benefit of telescoping is to be given. It is seen by us that when the appellant has itself offered Rs. 14 crores as income from such unrecorded receipts which is quite more than the estimation of profit so made by ld. CIT(A), therefore separate addition of the aforesaid amount over and above the amount of Rs. 14 crore so declared in the return will tantamount to double addition of the same income and therefore, the same is hereby deleted. Accordingly, the appeal of the appellant company is allowed. 8. Now coming....