TaxTMI 
TaxTMI 
2024 (4) TMI 797
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....case of assessee which is a limited company on 29/01/2021 and was part of the search carried out at "Brahmaputra Group". Notice u/s. 153A of the Act were issued to carry out the assessment proceedings followed by validly issuing notices u/s 143(2) and 142(1) of the Act. Thereafter, the submissions made by the assessee were considered and assessments were completed making various additions which were challenged by the assessee before the ld. CIT(A) getting partial/complete relief. 4. Aggrieved, the revenue is now in appeal before this Tribunal against the finding of the ld. CIT(A) for Assessment Years 2017-18, 2018-19, 2020-21 & 2021-22 and assessee had filed cross objections for Assessment Years 2017-18, 2018-19 & 2020-21. 5. We first take up the revenue's appeal in ITA No. 5/GTY/2023 & C.O. No. 27/Kol/2023 for Assessment Year 2017-18. 5.1. The revenue has filed the following grounds of appeal for Assessment Year 2017-18:- "1. That on the facts of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 2,41,28,500/- made by AO under the head of unexplained cash receipt u/s 69A of the IT Act, 1961 by not taking into consideration the fact that....
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....t would be only logical to hold that the alleged cash (even if presumed to be received) was available with the Appellant for being repaid to Sh. M L Kayal at the time-of cancellation of my purported land deal. Further, it is unfathomable and beyond comprehension as to why the AO did not conduct any enquiry with the corresponding land revenue authority under whose jurisdiction the aforesaid land of the Appellant, subjected to the impugned alleged transaction,, fall. It is also unfathomable that even after the Appellant bad furnished details of lands sold by the Appellant to the AO, as to why the AO was still surmising that the Appellant had entered into any alleged sale of land with Sh. M L Kayal. In any case, peculiar facts of the case, it is noted that the impugned addition has been made based on conjectures and surmises than on any tangible / credible material. In view of the above reasons, in the absence of any specific enquiry conducted or any specific findings and respectfully following the rationes of above judgments, it is held that the AO had acted on conjectures and surmises by adding a sum of Rs. 2,41,28,500/- on account of amount received by th....
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....as a material, incriminating in nature in the form of digital evidence under ID marked MB/HD/01, which gave jurisdiction to the Assessing Officer to carry out the assessment proceedings. Thus, all the grounds raised in the cross-objections are dismissed. In the result, appeal by the revenue and cross-objection filed by the assessee for Assessment Year 2017-18 are dismissed. 11. Now, we take up the revenue's appeal in ITA No. 06/GTY/2023 for Assessment Year 2018-19. The revenue has raised the following revised grounds of appeal:- "1. That on the facts of the case and in law, the Ld. CIT(A) has erred by deleting the addition to the tune of Rs. 4,09,27,220/- out of total addition of Rs. 4,71,13,264/- under the head of unexplained expenditure u/s. 69C of the Income Tax Act, 1961 by not considering the fact that during the assessment proceedings the assesses has failed to explain the transactions mentioned in the incriminating material (MB/HD/01) seized from the assessee's premises during the course of search. 2. The Ld. CJT(A) has erred by allowing setoff of unexplained expenditure to the tune of Rs. 1,11,56,044/- (i.e. Rs. 49,70,000/- + Rs. 61,86,044/-) with t....
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....essing Officer whereas the ld. Counsel for the assessee referred to the written submissions and, also relied on the finding of the ld. CIT(A) appearing at page 58 to 88 of the impugned order. 14. We have heard the rival contentions and perused the material placed before us. Revenue is aggrieved with the deletion of addition of unexplained expenditure u/s 69C of the Act at Rs. 4,71,13,264/-. We, on perusal of the finding of the lower authorities notice that Mr. P.D. Deoarah is the director in M/s. Sati Oil Udyog Limited and M/s Assam Vegetable Oil Products Limited. As per the audited books of accounts for FY 2017-18, the closing balance of M/s. Sati Oil Udyog Limited as on 31/03/2018 is stated at Rs. 4,09,27,220/- cannot be doubted. These audited financial statements were part of the income tax return filed by the assessee much prior to the date of search. Therefore, genuineness of the closing balance of M/s. Sati Oil Udyog Limited at Rs. Rs. 4,09,27,220/- is established. 14.1. The remaining amount i.e., Rs. 4,71,13,264/- (-) Rs. 4,09,27,220/- is the sum at Rs. 61,86,004/-. Before us, two fold contentions have been made by the ld. A/R. Firstly, that there is a payment of Rs. 6....
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....s a material, incriminating in nature in the form of digital evidence under ID marked MB/HD/01, which gave jurisdiction to the Assessing Officer to carry out the assessment proceedings. Thus, all the grounds raised in the cross-objections are dismissed. In the result, appeal of the revenue and cross-objection for Assessment Year 2018-19 are dismissed. 18. Now, we take up the revenue's appeal in ITA No. 07/GTY/2023 for Assessment Year 2020-21. The revenue has raised the following revised grounds of appeal:- "1. That on the facts of the case and in law, the Ld. CIT(A) has reed by deleting the addition to the tune of Rs. 25,00,000/- under the head of unexplained expenditure u/s. 69C of the I T Act, 1961 by not taking considering the fact that the amount of Rs. 25,00,000/- has been adjusted by the assessee company against the amount payable by Shri P D Deora and Smt Anju Deora, Promoters of M/s. Assam Vegetables & Oil Products Ltd and M/s, Sati Oil Udyog Ltd for the flat purchased by them in the Spanish Garden residential complex and the same adjustment was not recorded in the books of accounts. 2. That on the facts of the case and in law, the Ld. CIT(A) has erred ....
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....o the Assessing Officer that amount of Rs. 25,00,000/- has been adjusted by the Assessing Officer against the amount payable by Deorahs for the flat purchased by them. Since these documents did not bear any date/s, it was presumed to be unexplained expenditure during the financial year 2020-21. We observe that no specific date is appearing in the incriminating material for the alleged transactions. There is no reference of any date which could remotely link the impugned payment to impugned Assessment Year. The presumption of the Assessing Officer that the alleged sum is adjusted against the sale consideration itself shows that it is part of the sale consideration duly accounted for in the books. Thus, the ld. CIT(A) rightly referring to these facts has come to the conclusion that the ld. Assessing Officer erred in making this impugned addition which has been made without any basis and without considering the facts that the alleged sum has been paid through banking channel duly accounted for in the regular books of accounts. Ground No. 1 raised by the revenue is dismissed. 21. Ground No. 2 is against the deletion of addition of Rs. 90,748/- made by the Assessing Officer has unexp....
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.....00 Thus, the explanation of the A/R that the disclosure of Rs. 15,00,27,097 made by the assessee was to cover up the undisclosed profit detected from the tally data found in MB/HD/04 is acceptable only to the extent that the disclosure has been made in the financial year 2019-20 (i.e., AY 2020-21) or before. It is seen from the table above that disclosure amounting to Rs. 1,56,00,000/- (sum of Rs. 1,45,00,000 and Rs. 11,00,000) has been made in FY 2020-21 corresponding to AY 2021-22. Thus, the disclosure of Rs. 1,56,00,000/- made in the AY 2021-22 cannot be said to have been made out of the undisclosed income detected from the seized tally-data found in MB/HD/04, which contains transactions only upto FY 2019-20, i.e., AY 2020-21. Thus, only the remaining sum of Rs. 13,44,27,097 (i.e., Rs. 15,00,27,097 - Rs. 1,56,00,000) is the disclosure made out of the undisclosed income of Rs. 15,78,63,456/- detected from the seized tally data found in MB/HD/04. Thus, the remaining amount of undetected income (Rs. 2,34,36,359 , i.e., difference of Rs. 15,78,63,456 and Rs. 13,44,27,097), which is not disclosed by the assessee as part of voluntary disclosure made in the AY 2020-2....
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....er Section 153A of the Act (i.e. AY 2015-16 to AY 2019-20). The Impugned order is bereft of any observation or findings that the aforesaid Balance Sheet (as per the seized data whose image has been referred per supra) pertained ONLY to AY 2Q1S-16 to AY2020-21. 3. That, there is nothing on record which can negate that the profit appearing in the aforesaid Balance Sheet (as per the seized data whose image has been referred per supra) did not pertained to any assessment year(s) prior to the AY 2015-16. 4. That, it is a settled law that income can be taxed in the year in which it has been earned by an assesses & not in the year in which the income has come to the knowledge of the department. The cardinal Principle of Taxation provides that correct income must be taxed in correct year and in correct hands. 5. That, as per the aforesaid Balance Sheet (as per the seized data whose image has been referred per supra] the profit earned by the Appellant for the impugned assessment year was clearly, Rs. 1,80,16,8267/- only. Therefore, addition in the present case in any circumstances cannot be more than Rs. 1,80,16,826/-. Further, the AO had not assigned any reasons ....
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....of the Appellant are duly recorded In the aforesaid balance sheet. Thus, it would be reasonable to presume that the profit appearing in the aforesaid Balance Sheet (as per the seized data whose image has been referred per supra) includes profit / income earned by the Appellant In respect of its regular banking transactions which are also recorded in the impugned tally data. Therefore, it is dear that the profit appearing in the impugned profit and loss account of the aforesaid Balance Sheet (as per the seized data whose image has been referred per supra) includes profit of the Appellant from regular banking transactions as well as from outside books transactions OR in other words the profit as appearing the aforesaid balance sheet (As per seized tally data) is the composite profit of the Appellant on account of the Appellant regular transactions as well as on account of outside books transactions. In view of the above stated facts, I hold that the addition made on account of Undisclosed Profit amounting to Rs. 2,34,36,359/- made by the Assessing Officer is not correct. Hence, the addition made by the Assessing Officer on this account is, hereby/deleted and the ins....
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....NPP of preceding and subsequent Assessment Years is reproduced below:- Sr. No. Particulars AY 2018-19 AY 2019-20 AY 2020-21 AY 2021-22 1 Total Income 2,48,30,49,330 2,44,07,1,952 1,64,97,66,143 1,62,88,84,875 2 Total Expenditure 2,52,24,24,173 2,53,31,53,227 1,68,64,35,066 1,57,90,31,947 3 Profit before tax (-)3,93,74,843 (-)9,24,41,275 (-)3,66,68,923 4,98,52,928 4 Exceptional items (exp.) (-)5,42,75,771 (-)9,33,46,056 t-)4,36,89,176 (-)4,11,84,733 5 Net profit 1,49,00,928 9,04,781 70,20,253 86,68,195 6 Net profit ratio 0.60% 0.04% 0.43% 0.53% 26.1. On provision of the above chart we notice that the NPR (Net Profit Rate) of 0.430% declared for Assessment Year 2020-21, is higher than the preceding year. The turnover of this company is mainly on account of work contracts of turnkey projects. There is no evidence on record to prove that the assessee has shown bogus sales bills or bogus works contracts as the transactions are carried out through proper banking channels and registered vendors. Turnover declared by the assessee has been accepted by the ld. Asse....
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....ling of Rs. 5,52,22,725/- under the head of bogus purchase by not taking considering the fact that the total sale turnover of the assessee is about Rs. 163 crores and the bogus purchase of Rs. 5,52,22,725/-were taken to reduce the income but not to increase the sales. Ld. CIT(A) has also not denied the findings of the AO regarding bogus purchase. 4. The appellant craves the leave to add/modify/ alter any or all the grounds during the course of hearing/ pendency of appeal." 30. We have heard rival contentions and perused the material placed before us. The first ground is against the deletion of addition of Rs. 7,96,000/- out of the total amount of Rs. 8,00,000/- under the head unexplained money. We notice that the ld. Assessing Officer based on the seized document MB-06 having reference "Commission Jorhat to Guwahati", inferred that there is a cash transfer of Rs. 8,00,000/- against fixed commission of Rs. 500/- per lakh. However, this finding of the Assessing Officer was not having any basis. As per the assessee, this can be entry of discount/commission of Rs. 500/- per tonne of iron and steel from some person or firm. Neither any staff has confirmed the analogy drawn b....
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....t either the computation or determination of the aforesaid additional undisclosed income or the manner of application/utilization of the aforesaid additional undisclosed income. In the absence of any enquiry by the AO as to the mode and manner of earning and computation of aforesaid additional undisclosed income as well as in the absence of any further material pointing to the application/utilization of the aforesaid additional undisclosed income, the alternative contention of the Appellant that the impugned amount on account of alleged transaction with M/s Krishna Udyog and M/s Tirupati Steel be engulfed/ subsumed m additional undisclosed income admitted by the Appellant in respect of the impugned assessment year appears to be reasonable. Thus, it is held that the aforesaid additional undisclosed income offered to tax by the Appellant in respect of the impugned assessment year also included the amount received by the Appellant m the form of cash from M/s Krishna Udyog and M/s Tirupati SteeL In view of the above discussion, even though the impugned transaction between the Appellant and M/s Krishna Udyog are held to be mere book entries, yet on account of the Striker discus....