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2012 (11) TMI 750 - ITAT AHMEDABADUndisclosed income – alleged that assessee incurred estimated expenditure of Rs.25,19,86,000/- in acquiring development rights of Shela Land whereas a sum of Rs.4,55,00,000/- only was recorded in the books of account and, therefore, the difference represented the assessee's unexplained or unaccounted investment – Held that:- Amounts have been received through account payee cheques through normal banking transactions and all the transactions are recorded in the books of accounts - amounts received against the booking of the plots are in the nature of business turnover accounted in the books of accounts - Since the assessee recorded the receipts in the books of accounts for booking of the plots which would ultimately be turnover/sales of the assessee which is not disputed by the AO, on which profit is shown, no addition could be made on account of unexplained credit u/s 68 of the IT Act - Merely because the Tribunal in the block assessment order observed that the same addition could be taken up in regular assessment as noted by the AO would not be a reason for the AO to make the addition without any just cause – In favor of assessee Addition on account of unexplained cash deposits in the bank accounts – Held that:- cash deposits on various dates in the bank account of the assessee company are duly recorded in the regular books of accounts even prior to the search. The books of accounts of the assessee have not been disputed by the AO. All the cash deposits were found to have been made out of the cash balances available in the books of accounts on the date of the deposit in the bank. Since the book entries are not in dispute, therefore, there is no need to file separate cash flow statement as is argued by the learned DR because the book entries explaining the availability of the cash with the assessee company on the date of bank deposits would be more significant and relevant as against cash flow statement - AO has not brought any adverse material against the assessee on record to prove that the assessee utilized or spent the amount of withdrawal in any specific item – In favor of assessee Addition on account of unaccounted income of Radhe Acre I & II Schemes – Held that:- Complete details of the sales of the plot from 15.3.1996 to 31.3.1996 have been filed - Assessing Officer has merely assumed that during the post search period also the assessee company indulged in charging on-money. No evidence or material has been brought on record by the Assessing Officer to support such assumption - AO merely on the basis of block assessment order assumed that in the post search period also assessee has received on money. No evidence or material was brought on record by the AO to support his assumption. Merely on the basis of assumption no such addition could be made against the assessee - In favor of assessee Interest expenditure – held that:- the assessee company had huge interest free funds of its own which were sufficient to cover any alleged interest free advances made by the assessee. No nexus has been proved between the interest bearing borrowed funds and interest free advances. The explanation of the assessee clearly proved that funds have been used for the purpose of business. – Decided in favor of assesse.
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