TaxTMI 
TaxTMI 
2010 (1) TMI 50
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....ied in law in deleting the addition of Rs.6.45 crores in spite of the fact that the addition were made on correct application of the seized documents which were in the handwriting of the Assessee and the seized material was sufficient to justify the additions and the presumption under Section 132(4A) not being rebutted by the Assessee? iii) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in deleting the addition of Rs.4 lacs although the assessee could not explain the source of expenditure of the unaccounted income not recorded in the cash book and also because the expenditure was contrary to public policy? iv) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in law in deleting the addition of Rs.68 lacs in relation to the agreement with Weston Components Limited being unexplained expenditure which were not recorded in the cash book of the Assessee and also being against public policy nor was the presumption under Section 132(4A) rebutted by the Assessee? v) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in law in allowing the dedu....
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....particularly set out therein. 9. Being aggrieved by the aforesaid order, the assessee filed an Appeal before the Commissioner of Income Tax (Appeals), who by his order dated 27th March 2003 upheld the assessment order. Being aggrieved by the aforesaid order, the assessee filed further appeal before the Income Tax Appellate Tribunal and the Tribunal by the impugned order dated 31st January 2004 partly allowed the appeal of the assessee. Being aggrieved by the aforesaid order, the present appeal is filed by the revenue under section 260A of the 1961 Act. 10. The basic argument of the revenue is that the order of the Tribunal is totally perverse, because the concurrent findings recorded by the assessing officer and upheld by CIT (A) are sought to be reversed by the Tribunal by totally ignoring the material evidence on record and totally ignoring the statements recorded during the course of search, which have great evidential value. It is submitted that in the seized papers it is mentioned that the unaccounted expenditure was incurred in "January to March", but the year in which such expenditure was incurred is not mentioned. In such a case, it was reasonable to assume that such ....
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....ts given to the employees / cashier. In these circumstances, the explanation given by the assessee being reasonable, the Tribunal accepted the contention of the assessee. Therefore, the decision of the Tribunal being a finding of fact recorded by a highest fact finding authority under the 1961 Act ought not to be disturbed and the appeal filed by the revenue ought to be dismissed. 13. We have carefully considered the rival submissions. 14. The first question raised by the revenue relates to deletion of Rs.3.2 lacs and Rs.3.12 lacs being additions made by the A.O. under Section 69C on the ground that the assessee has failed to explain the source of the expenditure noted at pages one and two of the seized papers. The assessee had contended before the A.O. that the above amounts represented the unaccounted wages paid to the employees during January to March 1998. It is apparent from the assessment order that no efforts have been made by the A.O. to verify the above explanation given by the assessee. The assessing officer has presumed that the above expenditure might have been incurred in the year of search relating to A.Y. 1999-2000 and while making additions on the basis of sei....
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....The counsel for the revenue has fairly stated that he is not pressing the said question as the decision of the Tribunal is based on appreciation of evidence. 17. The third question raised by the revenue relates to the deletion of the addition or Rs.4 lacs. The addition of Rs.4 lacs was made by the A.O. on the basis of the noting recorded in the seized paper (page 7) which read as follows "Given 17/4 Desai Cashier 4/". In the statement recorded during the course of search on 28-7-1989, Mr.Ramesh Taurani had stated that the particulars at page 7 of the seized paper represents an account of the amounts paid to various parties. During the course of assessment proceeding the assessee contended that the above noting simply means giving Rs.4 lacs to the cashier Mr. Desai out of Rs.5 lacs withdrawn from the bank. The A.O. rejected the contention of the assessee and noticing that the said transaction was not recorded in the cash book, the assessing officer made addition of Rs.4 lacs as unaccounted receipts. The Tribunal noted that the explanation given by the assessee during the course of assessment proceedings is at variance with the statement recorded during the course of search. Howev....
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....e assessee contended that since the notings contained in the seized papers did not materialise no addition can be made on the basis of the above notings. Rejecting the contention of the assessee, the assessing officer made additions of Rs.68 lacs as unexplained expenditure. The Tribunal deleted the addition on the ground that the written agreement with Weston Components Limited produced by the assessee gave credence to the explanation given by the assessee that the notings represented the payment schedule and not the actual payment. Moreover, the Tribunal noticed that the ledger account of the assessee is credited by Rs.60 lacs as per the agreement dated 27-4-1999. The Tribunal has held that the assessee has properly explained the reasons as to why the agreement was entered into for Rs.60 lacs and not for Rs. 68 lacs and hence the addition based on suspicion cannot be sustained. The contention of the revenue, before us, is that in the absence of the assessee producing the first agreement the Tribunal ought not to have interfered with the concurrent findings recorded by the assessing officer and the CIT (A) which were based on the notings contained in the seized papers. 21. We....