2014 (8) TMI 1259

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.... 2. The only issue in this appeal of revenue is against the order of CIT(A) deleting the addition of Rs. 29,55,000/-. The CIT(A) restricted the addition at Rs. 36.50 lacs as against the addition made by AO at Rs. 66,05,000/- u/s. 69C of the Act in respect to undisclosed cash payments. 3. We have heard rival submissions and gone through facts and circumstances of the case. The AO made addition of Rs. 66,05,000/- in respect to cash payment made by the assessee. The facts of the case are that search operation u/s. 132 of the Act was conducted in the cases of Fortune Ispat Group cases on 16.02.2010 and during the course of search at the office premises of Fortune Ispat Pvt. Ltd. at 8C, M. D. Road, 6th floor, Room No. 38, Kolkata-7, various bo....

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....05,000/- apart from the amount disclosed before the DDIT (Inv,) and included in the returned income at Rs. 30 lacs. Thereby, the AO assessed the entire amount found in the seized documents at Rs. 66,05,000/-. Aggrieved, assessee preferred appeal before CIT(A, who after considering the submission of the assessee deleted the addition vide para 5 as under: "5. I have considered the submission of the appellant and perused the assessment order. I have also gone through the seized papers under reference as well as the assessment order passed by the same AO in the case of Sajjan Kumar Patwari (HUF) for A.Y 2010- 11. The facts of the case have already been discussed above that search action was conducted in the case of Fortune Ispat group and in ....

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....e income at Rs. 36,50,000/- on the basis of peak cash balance. However, the AO treated the entire amount of purchases of Rs. 66,05,000/- as unexplained expenditure u/s. 69C of the Act for the reason that the appellant did not produced evidence of sales. On careful consideration of the facts, I am of the opinion that the AO was not justified in treating the entire amount of purchase as unexplained expenditure for the reason that the appellant did not produce the evidence of sale or he did not explain the source of payment. There is no dispute that the purchases of Rs. 66,05,000/- and Profit earned on sale of such purchased material was not recorded in the books of account. As per seized papers the sales were accepted in the case of Sajjan Ku....