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2023 (2) TMI 345 - AT - Income TaxAddition u/s 69A - entries in the cash book corresponding to receipts surrendered during the course of survey - statement recorded u/s 131 assessee submitted that the entries reflected therein pertain to gym receipts which have been received in advance from the respective persons, however to buy piece of mind and avoid litigation, he surrendered the receipts - HELD THAT:- The factum of nature of these receipts being received by the assessee from his gym activities are not in dispute. In the return of income filed u/s 44AD, the assessee has disclosed the receipts from the gym activities which has been accepted by the Revenue and are not in dispute. Assessee has submitted a cash book containing date-wise receipts from gym activities and on perusal thereof, we find that total receipts reflected therein amounts to Rs 16,00,600/- and individual receipts totaling Rs 3,00,000/- have been included therein. It is true that the assessee was not maintaining regular books of accounts but at the same time, as evident from the statement recorded during the course of survey as well, the assessee was maintaining receipts book/bills in respect of his gym activities. Where the entries corresponding to the entries in the receipts books are reflected in the cash book and are accepted by the Revenue, I see no justifiable reason to not accept the entries in the cash book corresponding to receipts surrendered during the course of survey. I therefore find that it is a case where the assessee has surrendered business receipts amounting to Rs 3,00,000/- during the course of survey and the said receipts have subsequently been offered as part of the total business receipts in the return of income so filed by the assessee u/s 44AD. In the result, the addition of Rs 3,00,000/- so made and upheld by the ld CIT(A) is hereby directed to be deleted. Unexplained advances - during the course of survey operations at the assessee’s premises, a pocket book containing certain entries were found containing name of certain persons and the corresponding amount - assessee submitted that the entries reflected therein pertain to friendly loans given by him to certain persons out of his undisclosed income and to buy piece of mind and avoid litigation and he surrendered the amount for the purposes of taxation - HELD THAT:- As noted that the assessee has shown these loans transactions against individual name and corresponding amount at the beginning of the year and there are no fresh loan transactions shown during the year and then, against four persons, there are repayment of loans by cheque - The statement made during the course of survey is relevant and at the same time, where the assessee is able to demonstrate that the transactions actually pertain to previous year and there are infact repayments rather than fresh loan transactions during the year, it is essential that the said submissions be considered and examined which has not happened in the instant case. The factum of repayment through cheques could easily be verified from the bank statements. Basis material available on record, find that the assessee has reasonably demonstrated that there are no fresh loan transactions during the year and considering the same, the addition so sustained by the ld CIT(A) is hereby directed to be deleted. Unexplained advances to doubtful persons - HELD THAT:- It is true that the assessee was not maintaining regular books of accounts but at the same time, as evident from the statement recorded during the course of survey as well, the assessee was maintaining receipts book/bills in respect of his business activities and further, it is also a fact that the assessee has disclosed these receipts as part of service tax/GST returns. Where the entries, corresponding to business receipts in the receipts books, are reflected in the cash book and the same are accepted by the Revenue, see no justifiable reason to not accept the entries in the cash book corresponding to advances made out of said business receipts. We find that it is a case where the assessee has offered business receipts in his return of income which is sufficient to make business advances and thus, no separate addition is called for. In the result, the addition so made and upheld by the ld CIT(A) is hereby directed to be deleted. Appeal of the assessee is allowed.
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