TaxTMI 
TaxTMI 
2025 (3) TMI 1724
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....T(A) was driven by extraneous considerations without looking at the asset side of the balance sheet. (4) On the facts and circumstances of the case, the addition is required to be deleted. (5) The learned CIT(A) was not justified in confirming the misapplied provision of 69B of the Act when on the facts of the case, the provision was not applicable. (II) Unexplained investment of Rs. 5,36,794: (1) The learned CIT(A)'s order being totally lopsided without even referring to the complete reconciliation and evidence, is required to be quashed. (2) The learned CIT(A) was not justified in confirming a sum of Rs. 5,36,794 being difference between the particulars of assets disclosed by the appellant under the AL schedule of the ITR. (3) The difference only emanating out of clerical error during A.Y.2016-17, the learned CIT(A) ought to have appreciated the proposition. (4) With the difference fully explained, there was no justification in making the addition and more particularly when the asset in question sat in the books of the appellant. (5) On the facts and circumstances of the case, the addition is required to ....
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....editors were bona fide and copies of ledger filed. (3) Merely because the confirmations from the creditors are not availed would not render the sundry creditors as non-existent. (4) The learned CIT(A) ought to have allowed the appeal when the appellant demonstrated that creditors were paid in the subsequent paid. (5) On the facts and circumstances of the case, there was no justification in making addition. (VIII) Miscellaneous: (1) All of the above grounds are prejudiced to one another. (2) The appellant craves leave to add, alter or vary any of the grounds of appeal. 2. At the time of hearing of appeal, the learned Authorised Representative (ld.AR) of the assessee submits that he is not pressing grounds No. (V) and (VI) of appeal. Considering the submission of ld. AR of the assessee, grounds No. (V) and (VI) of appeal are dismissed as not pressed. 3. Brief facts of the case qua the other grounds of appeal are that the assessee is individual and proprietor of 'Mahesh Petroleum' having authorised dealership of fuel station related to Hindustan Petroleum Corporation Limited. The assessee filed its return of income for the A.....
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.... out of which Rs. 33.96 lacs is taken into consideration on account of unexplained expenditure of renovation of Bungalow and there is difference of amount of Rs. 5,36,794 (Rs. 43,33,691-37,96,897). The assessee was asked to explain the difference of Rs. 5,36,794/- and why it should not be considered as unexplained investment. The assessee filed its reply dated 20/12/2019. In the reply, the assessee submitted that in show cause notice, the difference Rs. 53,67,940/- pointed out on account of investment in immovable property. The assessee stated that they have not purchased any new immovable property nor any capital expenditure was incurred on the renovation of Bungalow. The assessee stated that while reporting for A.Y. 2016-17, a property 'shop No. 93 at Narmada Market' of Rs. 5,51,300/- had inadvertently remained to be reported. The assessee furnished balance sheet of assessee for Financial year (F.Y.) 2015-16 wherein investment held by assessee as reported in Schedule-G and explained that there is no change in the immovable property other than renovation expenditure. The assessee furnished copy of Schedule-G of balance sheet for F.Y. 2015-16 and F.Y. 2016-17 wherein only addition ....
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.... Officer worked out the deemed annual letting value at the rate of Rs. 1.26 lacs after allowing standard deduction @ 30% and added to the income of assessee. 6. The Assessing Officer further noted that as per Annexure-H for audited balance sheet, the assessee has shown sundry creditor of Rs. 61,10,903/-. The assessee while issuing show cause notice dated 16/12/2019 was asked to furnish details, communication address of sundry creditors alongwith ledger account and details of entity and in case of failure, the amount would be added to the income of assessee. The assessee filed his reply dated 20/12/2019. Alongwith reply, the assessee furnished details of sundry creditors. The assessee stated that liability continues as on 31/03/2017 which did not cease to exist. There is no remission or cessation of liability. The Assessing Officer cannot decide that the liability has ceased to exist. In support of its claim, the assessee relied upon certain case laws. The Assessing Officer recorded that PAN and address of creditors are mandatory for their identification by increasing the liability, the portion of profit has been suppressed to manipulate account and to match the balance sheet. Th....
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....ssing Officer that the assessee was required to offer deemed rental value if asset not occupied. During the appellate proceedings, the assessee failed to bring on record that the impugned property was for use of commercial purpose as claimed. The assessee failed to offer any justification for invoking Rule 46A and confirmed the action of Assessing Officer. On the addition of sundry creditors, the ld. CIT(A) held that the assessee was required to file details of PAN and communication address of sundry creditors of Rs. 61,10,903/-. PAN and address of creditors are mandatory. Even during the assessment, despite allowing opportunity, the assessee failed to furnish PAN and address of such creditors. The assessee failed to furnish such details. Further, the assessee failed to demonstrate as to why additional evidence filed should be treated as admissible under Rule 46A and confirmed the addition. Further aggrieved, the assessee has filed present appeal before this Tribunal. 8. We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities carefully. Ground No. I relates to addition on account of unexplained investment on house re....
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....d additional evidence by way of Rule 46A which was conveniently ignored by the ld. CIT(A). The ld. AR of the assessee submits that the provisions of Section 69B is not otherwise applicable, as renovation expenditure are duly accounted not only personal books but also disclosed in the ITR. Personal books were ignored while making this addition, however, while considering the other addition, personal balance sheet was acknowledged, which clearly shows that personal balance sheet was available before lower authorities. The ld. AR of the assessee submits that the addition of renovation expenses is liable to be deleted. 9. On the other hand, the ld. Sr. DR for the revenue supported the orders of lower authorities. The ld. Sr. DR for the revenue submits that renovation expenditure is not recorded in the books of account maintained by assessee. Assessee specifically asked to explain the discrepancies which the assessee failed. 10. We have considered the rival submission of both the parties and have gone through the orders of the authorities below carefully. We find that the Assessing Officer made addition only on the basis of withdrawal from the capital account of business income an....
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....dule-AL with reference to asset as an unaccounted. There is no unaccounted asset. Though, such revised/corrected statement could not be considered by Assessing Officer as per the decision of Hon'ble Supreme Court in Goetz (India) Ltd. Vs CIT (supra), however, such restriction was not applicable on the power of ld. CIT(A) to consider, verify from the financial statement of earlier years and to allow relief to the assessee. 12. On the other hand, the ld. Sr. DR for the revenue supported the orders of lower authorities. The ld. Sr. DR submits that in para 6.4 of impugned order, the ld. CIT(A), by referring the observation of Assessing Officer, particularly with regard to Schedule-AL that investment in immovable property was at Rs. 1.88 crore, whereas in proceeding year, it was shown at Rs. 1.45 crore, therefore, there was a difference of about Rs. 43.33 lacs, out of which Rs. 37.96 lacs was considered as unaccounted expenditure on renovation on Bungalow and remaining of Rs. 5.3 lacs was added as unexplained investment. 13. We have considered the contentions of both the parties and have gone through the orders of the lower authorities carefully. We find that the main contention o....
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....nal balance sheet and information furnished by assessee in Schedule-AL of return of income, corresponding with personal balance sheet. The basis of addition was that the assessee has not furnished documentary evidence to substantiate that the property at R.S. No. 3, Vasugana, Bharuch was to be used for hotel or that necessary approvals from BAUDA was pending during the year. The assessee made application to BAUDA on 27/09/2019, copy of which is filed at page No. 120 to 122 of paper book. The legal heirs of assessee has received development permission from BAUDA as on 13/06/2023, copy of which is filed at page No. 123 to 130 of paper book. Such development permission was filed before the ld. CIT(A). When the permission to construct was received only on 13/06/2023, no deemed rental income can be estimated in respect of an open land. Though, the evidence was furnished before the ld. CIT(A) to build a hotel dated 13/06/2023, still the ld. CIT(A) held that no evidence was filed ignoring the material evidence. The ld. AR of the assessee submits that the addition of deemed rental income is liable to be deleted. 15. On the other hand, the ld. Sr. DR for the revenue supported the orders ....
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.... fact, the addition resulted in 200% gross profit on revenue, which is impossible. The ld. AR of the assessee finally submits that once the assessee has discharged liability either during the relevant financial year or in subsequent period, no addition on account of creditors, is to be sustained. On validity of addition of sundry creditors, that where there is no declaration by assessee that it does not intend to honour its liability nor there is discharge of debt, provisions of section 41(1) cannot be invoked, the ld AR of the assessee relied on a series of decisions, copies of which is also filed on record, in the form of legal paper book. 18. On the other hand, the ld. Sr. DR for the revenue supported the orders of the lower authorities. The ld. Sr. DR submits that during assessment, the assessee failed to furnish explanation regarding the genuineness of transaction involving sundry creditors. 19. We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities carefully. We find that the Assessing Officer made addition of sundry creditors mainly by taking view that the assessee failed to prove the identity of creditors....