2018 (5) TMI 2204

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.... use ignoring the fact that the addition has been made in the hands of the assessee for the expenditure which actually relates to the expenses of the business run by the assessee. Thus, order of the learned CIT(A) passed merely on surmises and conjectures should be reversed and addition confirmed by him should be deleted. 2. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in confirming the addition of Rs. 5,00,000/- made by the Learned AO on account of undisclosed investment in committees ignoring the fact that the investment made is duly accounted for. Thus, order of the learned CIT(A) passed merely on surmises and conjectures should be reversed and addition confirmed by him should be deleted." 2. At the outset, ld. counsel for the assessee has not pressed ground no.1, therefore, the same is dismissed as not pressed. 3. Facts in brief are that, search action u/s.132 was carried out on 7th January, 2010 in Gee Ispat group of cases and assessee being part of that group, was roped in within the scope and ambit of Section 153A. During the course of search, a diary was found at the residential premises of the assessee marked as Anne....

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....nexplained investment made in various committees which was found recorded in the seized diary. For the impugned years under appeals i.e. Assessment Years 2007-08 & 2008-09, pages 135 and 137 of seized diary records investment of Rs. 5 lacs on 01.01.2007 and another Rs.5 lac on 16.12.2007. As noted above, the investment aggregating to Rs. 10 lac (Rs. 5 lac each) for the Assessment Years 2007-08 and 2008-09 has already been considered by the Settlement Commission and has been admitted to have subsumed within the additional income offered for the Assessment Year 2010-11. Thus, no separate addition for this unexplained investment could have been made. We accordingly, direct the Assessing Officer to verify if the amount of investment of Rs.5 lac is covered in the opening balance of Rs. 1,07,61,930/- as shown in Annexure A-1 on which tax has already been paid as directed by the Settlement Commission. If that is so, then no separate addition should be made. Assessee should be called upon to explain the same. Thus, the appeal of the assessee is partly allowed. 8. The grounds of appeal for the Assessment Year 2008-09 read as under: 1. On the facts and in the circumstances of the....

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....0,000/- after observing and holding as under:- "These payments at Col. 2 are net of dividend earned during the month. The AO has added total amount of payments including the dividend. In the case of first committee (SSI62), the payments have been made for 4 months. The AO has, therefore taken Rs.20 lakhs as paid in respect of this committee including the dividend @ Rs. 5 lacs per month. In respect of BASIA committee, payments have been made only for 3 months and the AO has taken undisclosed payments a Rs. 7.5 Lakhs (Rs.2,50,000/- each) including the dividend from the committees. Thus, the AO has arrived at an addition of Rs. 27,50,000/. However, it is noted that the appellant had received Rs. 40,37,500/- in the months of march which has remained to be taxed. The AR argued that in respect of the said receipt the appellant had already made payment of 4 instalments in the first committee i.e. SSI62. The submissions of the AR have been considered. It cannot be denied that the appellant made payment of Rs. 4.2 lacs Rs. 5 lacs and Rs. 4.25 lacs respectively during the months of December, January, February of F.Y. 2007-08 to the committee SSI62 which are outside the book....

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....of 16.12.2007 for the A.Y. 2008-09. The AR has not given any evidence/explanation to show that this investment was already reflected in the books of accounts of the appellant. Hence, I have no hesitation in adding the same to the total income of the assessee as unexplained investment u/s.69 of the Act. The income of the assessee is accordingly enhanced by further amount of Rs.5 lac under this head." 12. After hearing both the parties and on perusal of material referred to before us, we find that Settlement Commission has dealt with the issue of investment in committees in the following manner:- 22. "Rule 9 Report has proposed treatment of applicant's investments in committees as undisclosed income. 23. In reply thereto, the applicant has stated to the effect that "...the applicant has done the entire working on the computer for this diary also and the entire income as computed from this diary has been offered before the Commission as per SOF. No part of the Comities remains undisclosed...." On its part, the Department reiterated its perception. 24. In his further comments, on this issue, in written submissions dated 04.06.2013, the applicant has ex....