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2016 (5) TMI 1360 - ITAT DELHIValidity of assessment u/s 153A - Held that:- The assessments made u/s 153A for Assessment Years 2000-01 to 2003-04 are bad in law as the undisputed fact is that no incriminating material has been found or seized, which are relatable to these years, during the course of search. In respect of assessment year 2004-05, it is observed that there were certain material found and seized during the course of search. A copy of the seized documents have been placed on record before us.It is further noticed that the addition for assessment year 2004-05 is based on the seized documents. Accordingly we hold the assessment under section 153 A to be valid for assessment year 2004-05. We now deal with the appeal filed by the Revenue for assessment year 2004-05 on merits. Payment of franchisee commission - Addition on account of expenditure not related to business - Held that:- The observations made by the Ld.CIT(A) that the AO has not rejected the books of accounts of the assessee and that disallowance is based on the figures as shown in the books of accounts and there has been no adverse observation made by the Ld.AO on the documentary evidence filed by the assessee is not controverted by Ld. A.O. It is further observed that the assessee has paid the commission to the payee after deducting the TDS. We therefore do not find any reason to interfere with the findings of the Ld.CIT(A).- Decided against revenue Undisclosed Franchisee Commission - Held that:- The estimated addition made by the AO to the tune of ₹ 88,00,000/- is based' on misconception of the factual position with regard to the number of outlets in existence during the relevant previous year as well as on the suspicion that the appellant must have earned undisclosed income during the year under appeal also since she had made a disclosure during the period relevant to A.Y. 2006-07. It is pertinent to note here that in the appellant's case a search & seizure operation was conducted but no incriminating material relating to the A.Y. 2004-05 has been brought on record which could support such presumption as made by the AO in her case. The presumption of the AO is based on mere suspicion and not on any evidence whatsoever - Decided against revenue Addition on non-refundable securities - CIT-A allowed partial relief - Held that:- We find no infirmity in these findings of Ld. CIT(A) when the Assessing Officer himself has given a clear finding in the remand report that the submissions of assessee as to non taxability of refundable deposits is acceptable, the question of challenging the order of Ld. CIT(A) on this issue does not arise - Decided against revenue Addition on account of suppression of of closing stock - Held that:- As established that the appellant had only three outlets during the year whereas the AO has estimated such difference of stock in respect of six outlets, which is factually incorrect. Such estimated addition without any specific evidence found during the search against the appellant cannot be sustained. Thus, only the addition to the tune of the difference found in the seized documents and the declared stock for Vasant Vihar branch i.e. ₹ 2,41,541/- is sustained. The appellant gets relief on account of estimated addition to the tune of ₹ 12,07.705.- Decided against revenue
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