TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 847
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....cumstances of the case and in law, the Ld.CIT(A), Ahmedabad has misunderstood the word "unaccounted income" stated by the assessee's partner in the statement u/s.131 of the I. T. Act, 1961 and has wrongly held the "unaccounted income" declared as "gross receipts". The partner in his statement has categorically stated that Rs. 11 crore declared by him is unaccounted income in addition to regular income of firm for F.Y. 2013-14 (A.Y, 2014-15). (4) On the facts and circumstances of the case and in law, the Ld.CIT(A), Ahmedabad has failed to appreciate the fact that the disclosure was made on the basis of the incriminating documents impounded during the course of survey. The above income would never have been disclosed in the books of account if the survey action had not been carried out, and the Ld.CIT(A) also ignored the facts that the disclosure of the "NET INCOME" was made and not the "GROSS RECEIPTS". The said receipts have been introduced in the books of account in the form of CASH deposited in the accounts. The undisclosed income is net of incurring all the relevant expenses. Therefore, no deduction on account of expenses towards this net income is allowable. (5) On the ....
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....bove net undisclosed income. The assessee has shown gross receipts of Rs. 21, 03,48,798/-including the disclosure of Rs. 11 crores and declared profit of Rs. 1, 26,72,377/-in the profit loss account. If the amount of this net undisclosed income of Rs. 11 crores is reduced from the profit shown during the year, there will be a total loss of Rs. 9,73,27,623/-in the year under consideration. This clearly proves that the assessee has claimed expense of units for which sale receipts are not shown during the year under consideration. In view of the above observations, the AO held that the assessee has failed to disclose amount of Rs. 11 crores, as undisclosed 'net' income during the course of survey proceedings. The AO also held that the assessee has reduced its profits by resorting to claiming expenses of unsold units or showing no profit/no loss on the units. Further, the assessee has estimated its closing WIP stock as per its convenience, with intention to reduce the net income. In view of the above circumstances, the AO made addition of Rs. 11 crores to the total income of the assessee on account of undisclosed 'net' income. 4. In addition to the above, the AO observed that in the o....
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....xpenses. Further, the assessee submitted that there is no provision under the Income Tax Act that the legitimate expenditures incurred towards unaccounted income cannot be allowed to the assessee. Accordingly, the assessee submitted that there are there is no justification for making such huge addition of Rs. 11 crores on "gross basis", specifically in the case where the assessee has suo moto disclosed an amount of Rs. 11 crores in its profit loss account, and thus adding of the same amount to the total income of the assessee for the year amounts to "double addition or repetitive addition", which is not permissible in the eyes of law. Further, the assessee submitted that complete details regarding direct as well as indirect expenditures, incurred by the assessee during the year along with the comparison in the earlier years was filed before the Ld. A.O. for his consideration. The genuineness of all these expenditures have not been doubted by A.O. and the AO after detailed scrutiny of expenses, did not dispute or disallow any of the expenditures. Accordingly, assessee submitted that it had correctly shown the entire receipts of the undisclosed sale proceeds in respect of sale of fla....
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....essment order while computing the total income. If A.O. wanted to add Rs. 11,00,00,000/- as net income, then he was required to delete Rs. 11,00,00,000/- or reduce it from the income as shown/offered in the books of account . This has not been done by the A.O. and he has retained the additional disclosed income of Rs 11,00,00,000/- as shown in the books of accounts and has further added Rs.l.1,00,00,000/- while computing the total income. I concur with the submissions made that the appellant has not stated that Rs. 11,00,00,000/- is net income as earned by the firm for A.Y. 2014-15 as being concluded by the AO in the assessment order. What was found out during the survey in the loose paper and what has been disclosed in the statement was actually undisclosed receipts of Rs. 11 00,00,000/- which were in nature of unaccounted money received in cash for booking and sale of shops and offices over and above regular receipts shown in the books. Had there been no survey and no discovery of incriminating documents during the operation, this cash receipt would not have been brought in the books by the appellant and there would have been loss booked for the financial year. This Rs. 11,00,00,....
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....se of detailed scrutiny assessment. Further, bringing to tax the amount of 11 crores again on "Gross basis" would amount to double taxation, which is not permissible in law. Accordingly, Ld. CIT(Appeals) has not erred in facts and in law in deleting the addition made by the AO on this count. Regarding the interest disallowance of Rs. 44,80,634/-, the counsel for the assessee submitted that since in the immediately preceding year, Ld. CIT(Appeals) for assessment year 2013-14 has held that the deposits received by the assessee amounting to Rs. 4.1 crores from five companies stands duly explained, accordingly interest paid on such deposits has also to be allowed to the assessee under section 36(1)(iii) of the Act. The counsel for the assessee produced copy of the order passed by Ld. CIT(Appeals) for assessment year 2013-14 for our perusal. 11. We have heard the rival contentions and perused the material on record. In our view, with respect to the addition of Rs. 11 crores as unexplained income outside the books of accounts, we observe that the issue in this connection is twofold: firstly, it is observed that this amount has already been offered to tax by the assessee in the return of....