TMI Blog2014 (11) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax, Versus /s Blue Luxury Impex Pvt. Ltd., (Formerly known as Alfa Engitech (P) Ltd. [2012 (7) TMI 467 - ITAT DELHI] - in the absence of any basis, when the Revenue did not even identity any specific amount of expenditure, which was not related to the business of the assessee, the order of the CIT(A) is to be upheld – Decided against revenue. - ITA Nos. 4204, 4205, 4206, 4207, 4208 & 4209/DEL/ 2012 A. (C.O. Nos. 395, 396, 397, 398, 399 & 400/DEL/2012) - - - Dated:- 26-8-2014 - SMT. DIVA SINGH AND SHRI J.S. REDDY, JJ. For The Appellant by : Shri M.B. Reddy, CIT., D.R. For The Respondent by : Shri Kapil Goel, Advocate ORDER PER BENCH: 1. All these appeals filed by the Revenue are directed against the common order passed by the Commissioner of Income Tax (Appeals)-II, Delhi dated 05.12.2011. The cross objections are filed by the assessee. 2. As the issues in all these appeals are common, for the sake of convenience they are disposed off by way of this common order. 3. Grounds of appeal reads as under:- 1. That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of ₹ 2890252/- made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as unaccounted expenditure u/s 69C of the IT Act, no further addition is made /s 40A(3) of the IT Act since the entire amount of cash purchases is brought to tax. 11. Similarly, the expenses claimed by the assessee company in P L a/c are also unverifiable as such 100% of the expenses are disallowed. 5. Before the First Appellate Authority, the assessee challenged the assessment order on jurisdiction as well as on merits. On the issue of jurisdiction, i.e. regarding the validity of the assessment order passed under Section 153C r.w.s.143(3), the First Appellate Authority adjudicate the issue against the assessee. On merits, he decided the issue in favour of the assessee. Aggrieved the Revenue has filed these appeals. The assessee has filed the cross objections on the issue of jurisdiction, on the ground that the assessment order passed under Section 153C r.w.s. 143(3) is a legal, bad in law, without jurisdiction and that it is time barred. 6. We have heard Shri M.B. Reddy, ld. CIT., D.R. on behalf of Revenue and Shri Kapil Goel ld. counsel on behalf of the assessee. 7. On careful consideration of the facts and circumstances of the case, perusal of the papers on record a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as because of this reason that the ITAT observed as under:- As the expenditure was accounted in the regular books, the source is obviously explained. The provisions of section 69C are not applicable as there as no unaccounted expenditure. (Emphasis supplied) 6.1 Hon'ble High Court, accordingly, held that section 69C refers to the 'source of the expenditure and not to be expenditure itself. Consequently, the Assessing Officer was clearly wrong in treating the said expenditure as unexplained expenditure under section 69C of the said Act and the lower appellate authorities were right in their conclusions in deleting the said additions, Hon'ble Court concluded. 6.2 In the instant case before us, indisputably, the purchases and sales are accounted for in the books of accounts. Thus, source of the expenditure incurred in: purchases is obviously explained. In the light of the view taken in their aforesaid decision by the Hon'ble jurisdictional High Court, especially when the Revenue did! not place any material before us, controverting the aforesaid findings of facts recorded by the Id CIT{A) so as to enable us to take a different view in the matter, we have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, on examination, no negative observation thereagainst was recorded by the Assessing Officer. Complete names and address of the parties to whom the goods were sold were available with the Assessing Officer. Most of the customers were assessed to income-tax. Sales were made against the opening stock. The purchases made during the year and the sales were but conversion of stock. The profit therefrom had already been taxed. The Assessing Officer did not bring anything on record to indicate that the sale proceeds represented the assessee's income from undisclosed sources. The sale transactions with Mis. Micron Textiles were not confirmed by the Assessing Officer on a test check basis. No more inquiries were made by the Assessing Officer thereafter. The assessee's books of account were audited books of account. The tax audit report was on record. The auditors had not made any negative observations therein. All these facts were duly taken into consideration by the Id CIT(A) and it was thereupon that the issue was decided in favour of the assessee. 9. So far as it regards Anupama Links Pvt. Ltd. (supra), under similar facts and circumstances, the Tribunal following CIT Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of any basis, when the Revenue did not even identity any specific amount of expenditure, which was not related to the business of the assessee, we are not inclined to interfere. Therefore, ground no.3 in these appeals is also dismissed. 8. In view of our aforesaid findings, rejecting the appeals of the Revenue, the grounds raised by the assessee in their Cos become purely academic and therefore, do not survive for our adjudication. 7. This decision was followed by the ITAT in the case of Anupma Links Pvt. Ltd. in ITA Nos. 4135-4140/Del/2011 order dated 12.10.2012 as well as in the case of AA Testronics Solutions in ITA Nos. 4233-4228/Del/2010 order dated 20.10.2012. Hence, on merits the issue is covered in favour of the assessee. 8. Consistent with the view taken in the decision, we uphold the orders of Commissioner of Income Tax (Appeals) and dismiss the appeals of the revenue. 13. Respectfully following the judgment of the coordinate Bench on this issue, this ground of the Revenue is dismissed. 14. In the result, the appeal of the assessee is dismissed. 15. As already stated in the cross objections the ld. counsel for the assessee raised legal issues. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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