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2014 (12) TMI 218 - AT - Income TaxSurvey u/s 133A - Addition made on the basis of material found during survey deleted – addition of expenses incurred on purchase and renovation of new office deleted - Held that:- CIT(A) rightly was of the view that the assessment order is an ad verbatim reproduction of the survey report on this point - there is no basis given in the survey report for estimating the net profit for the entire year on the basis of some rough calculations for one month only - in the survey report, the estimation of net profits by extrapolation has been done for AY 2006-07, and thereafter, the same has been repeated for AY 2005-06 without assigning any reasons whatsoever for doing so – the AO was not justified in estimating the net profit – revenue could not controvert the factual finding of the CIT(A) - The estimation of profit is not sustainable for the various reasons given – Decided against revenue. CIT(A) rightly observed that the assessee has not been able to give any proper explanation in regard to these entries except stating that the black diary was kept only for memory purpose, wherein the entries relating to enquires, ticket bookings and miscellaneous items till the transaction didn’t conclude were noted, but on conclusion they were duly entered in the regular books of accounts, and , therefore, no adverse inference should be drawn against the entries jotted in the black diary - While this argument may hold good in respect of the regular business transactions and sundry debtors, it cannot be accepted in respect of the entries written under the narration Ärun-Vishal Khoye Wala, New Office expenses, which, thus, appear to be amounts incurred on new office expenses - The appellant has not been able to show/co-relate these entries with his books of account - The addition in respect of the entries will have to be confirmed as unexplained expenditure u/s 69C of the Act – Decided against revenue.
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