TaxTMI 
TaxTMI 
2024 (11) TMI 1302
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.... Business Promotions & Development Activities Receipts'. The assessee company filed its return of income for the assessment year 2009-10 u/s 139(1) of the I.T. Act, 1961 on 28.09.2009 declaring a total income of Rs. 2,60,04,560/-.A search operation was undertaken by the CBI at the residential premises of the director of the assessee company namely Sh. Jatinder Pal Singh on 22.04.2010 at D-6/13, Vasant Vihar, New Delhi-110057, and cash of Rs. 2 crores was seized by the CBI. Thereafter, on the basis of the information provided by the CBI, a search operation u/s 132 of the I.T. Act, 1961 was carried out at the residential premises of Sh. Jatinder Pal Singh, Director of the assessee company, by the Directorate of Income Tax (Inv.) on 22.01.2010 itself and a cash of Rs. 15,74,000/- was found, out of which Rs. 15,00,000/- was seized by the Department. Statement of Sh.Jatinder Pal Singh was recorded u/s 132 (4) of the I.T. Act, 1961. In reply to question nos. 7 and 27 Sh. Jatinder Pal Singh replied as under: In answer to question no. 7 "about Rs 15 lacs is at my residence and Rs 2 crores in my office which is located in the same plot on ground floor. Out of Rs 15 lacs, a sum of Rs 10 ....
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....acility or competence to provide services and the expenses claimed have not been incurred by the payers for the purposes of the business. The relevant discussion by the AO on page- 2 of the assessment order is reproduced as under:- "During the course of search the assessee was asked to produce copies of ITR & books of accounts. The assessee was not able to furnish the documents required. Further, during the course search enquiries the assessee was again asked to furnish copies of ITR & final accounts. From copies of the final accounts filed, it was found that the assessee has debited various expenses to P&L A/c. The assessee was asked to furnish evidence in support of the expenses debited. However, evidence was furnished regarding the expenses debited to P&L A/c. The AR of the assessee stated that Sh. Jatinder Pal Singh, Director of the company is in judicial custardy and therefore cannot produce the necessary details/documents as required. Even after the release of the Director on bail, the AR or the assessee have not made any affords to furnish the required information. It appears that the assessee have no evidence to substantiate the expenses debited to P&L A/c. Further, dur....
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....ount, it was seen that apart from business income of Rs. 1,52,38,547/-, the assessee had also shown commission on land deals and professional and brokerage fee at Rs. 2,30,00,000/-. Further, the ld. CIT(A) noted that the total receipts declared by the assessee was Rs. 4,26,13,547/- on which a net profit of Rs. 2,45,29,961/- was declared. The ld. CIT(A) noted that total expenditure incurred for earning of this income from various sources debited to the profit & loss account was Rs. 1,80,83,586/-and further noted that the assessee had filed complete details of almost all the expenses debited to the P & L Account. The ld. CIT(A) further noted that out of total expenses of Rs. 1,80,83,586/- major expenditure was in respect of salary and accommodation charges amounting to Rs. 1,21,12,000/- and Rs. 22,65,674/- respectively. 4.1. The Ld. CIT(A) held that the disallowance was made without bringing on record any adverse material. The Ld. CIT(A) took note of the fact that during the post search enquiries, summons u/s 131 of the Act was issued by the Investigation Wing to all the parties to whom the assessee rendered services and verified the payment made by them to the assessee company. The....
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....n the instant case I find that the Assessing Officer has made the disallowance on mere surmises and conjecture and on some vague observations without bringing on record any adverse material. It is beyond imagination, that a person can earn such a huge income without incurring any expenditure. The AO did not give a categorical finding to say that if the expenditure was not incurred by the appellant company, in rendering his business activity then the nature of such income where expenditure incurred is not allowed. It is also a point to mention that during the post search enquiries, the Investigation Wing issued summons u/s 131 to all the parties to whom the appellant rendered services and verified the payments made by them to the appellant company. In response to the same, all the parties confirmed that payments were made in lieu of the services provided by the appellant company. However, on perusal of the same, the Investigation Wing found that the services rendered as described in the bills raised by the appellant company and that of the parties who sought services of the appellant did not tally or match and were contradictory. In these circumstances, the AO did not carry out an i....
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....y, in his return of income and offered for taxation and the same was not contested. However, she did not agree with the findings of the ld. CIT(A) on page- 19 that the AO did not carry out any independent enquiry regarding unmatched services and the actual purpose for making these payments and did not procure the bank statements of the company and that no effort was made by the AO to obtain copies of documents seized by the CBI from the residence of Shri Jatinder Pal Singh, Director of the assessee company. With respect to these observations and finding of the Ld. CIT(A), she submitted that the same was in contradiction with the decision of the Hon'ble Delhi High Court in the case of Jansampark Advertising & Marketing P. Ltd. 275 ITR 373 and further submitted that the onus was on the assessee to submit the necessary evidences in support of its claim of expenses debited in the profit & loss account and claimed by it in its computation of income. She further submitted that even before the Ld. CIT(A), the assessee did not submit any detail or produce any verifiable evidence in support of its claim regarding the balance expenses other than salary debited in the profit & loss account. S....