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2014 (9) TMI 1070 - ITAT DELHIValidity of the proceedings initiated u/s 153A - Held that:- The surrender no doubt was not acted upon by the assessee, but the said fact cannot lead us from the irresistible conclusion that incriminating material was unearthed during search. No material has been placed before us to negate the aforesaid factual aspect as well as to support the claims of AR that the admission before the Revenue was not valid and hit by duress and coercion. Before we conclude this issue, we consider it appropriate to note that the ld AR, had also stated that no material Per-se was found pertaining to the year under consideration. However, this argument also does not hold any water because once Section 153A is triggered on account of unearthing of incriminating material during search, the AO is empowered to compute the total income for six assessment year prior to the year of search. There are no fetters or limitation under the statute, so as to curtail the jurisdiction of the AO. G.P. addition - Held that:- Since the AO for subsequent Assessment Year’s has estimated GP rate of 15%, we do not find any reason as to uphold the GP rate of 20% for this Assessment Year. So we restrict the GP rate at 15% for this Assessment Year and direct the AO to compute the trading addition by adopting the sales at 1 crore and GP rate at 15% for this Assessment Year. We thus allow the ground raised by the revenue and reject the ground raised by the assessee on this behalf. Addition u/s 41(1) - Held that:- Since we have already upheld the rejection of books of account and estimated the income for the instant year, there is no basis to make any further addition on the basis of entries found in the books of accounts. Even otherwise we may add here that the said addition is contrary to the judgment of Apex Court in the case of Commissioner of Income-tax Vs. Sugauli Sugar Works (P.) Ltd. (1999 (2) TMI 5 - SUPREME Court) . Addition of interest payment held to be not for the purpose of business - Held that:- We dismiss this ground raised by the revenue as we have already estimated the income for the instant year and thus no separate disallowance is warranted so this Ground of revenue is dismissed. Unexplained investment in Farm House - Held that:- The Hon’ble Delhi High Court in the case of CIT Vs. Sakuntla Devi [2009 (3) TMI 5 - DELHI HIGH COURT] held that where department has failed to collect any information or material to show that any consideration above and beyond the stated consideration has changed hands then it would be legally impermissible to draw adverse interference against the assessee. Following the above position, we sustain the addition of ₹ 6,65,000/- out of total investment estimated by the AO of ₹ 91,65,000/-. As such addition of ₹ 1,41,250/- is sustained in the hands of the assessee and the balance addition against the assessee is deleted. Unexplained cash-credit - Held that:- We find no infirmity in the conclusion made by the ld CIT(A) to the extent that even the ld counsel in the course of hearing could not demonstrate that the credit was confirmed by the creditor namely Mrs. Alka Bansal who claimed to be the proprietor of M/s Anand Jute company. A copy of the account signed by an accountant, has been admittedly placed on record before us as well as the ld CIT(A). We note that the amount of ₹ 2 lakh has been received by Account Payee cheque and interest thereon has been paid to the creditor. Further PAN number of the creditor has also been furnished. In the said circumstances, we are of the opinion that merely because confirmation has not been filed separately from the creditor itself, would be amounting to deny the claim on hyper technical ground, when other facts are not refuted by the department even in the course of hearing. In such circumstances we feel it appropriate to allow the claim of the assessee and delete the addition of ₹ 2 lakhs. Un-explained creditors - Held that:- CIT(A) has held that there is cessation of liability, on the ground that in respect of another creditor M/s. Royal Packaging the said sum has been offered as income. However we are of the opinion that the cessation of liability in respect of another creditor cannot be a ground or basis to assume cessation of liability in respect to this creditor we therefore delete the addition.
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