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2016 (2) TMI 1181 - AT - Income TaxReopening of assessment - addition on the basis of certain entries from the Pen Drive seized from the possession of the partner of the assessee - Held that:- Coming to the addition in assessment year 2002-03, I noted that the Tribunal has given a finding under para 6.26 in respect of the working of the peak credit by Chetan Gupta at ₹ 36,89,310/- to be correct and treated the same as undisclosed income for the assessment year 2002-03. The peak credit has been worked out as observed in this decision on the basis of the transaction recorded in the alleged Pen Drive. I, therefore, agree with the submission of ld. Senior Counsel that there cannot be any double addition. Accordingly, delete the addition thus ground no.1 in assessment year 2002-03 is allowed. Deduction of expenditure disallowed - Held that:- AO disallowed this expenses merely on ad hoc basis by observing that as the books of accounts could not be produced the expenses cannot be verified even though he did not dispute details of various expenses as demanded by him. It is not the case that the expenses have not been incurred wholly and exclusively for the purpose of business. This disallowance has been made just on ad hoc basis @ 15% of the expenses incurred. The Income-tax does not permit the AO to disallow the expenditure on ad hoc basis. Accordingly, I delete this disallowance. Disallowance of depreciation - Held that:- The provisions of section 147 empowers the AO to make the addition in respect of any other income which escaped the assessment provided addition has been made in respect of the income for which the reasons to believe were recorded. The Pen Drive has been found from Chetan Gupta during the course of search and seizure operation conducted by the Punjab Vigilance Bureau at Ludhiana pertaining to the Ludhiana City Centre scam. It is proved that the assessee was having office in Punjab. In the subsequent assessment year i.e. assessment year 2005-06, I noted that no such disallowance in respect of the depreciation was made by the AO while completing the assessment. Therefore, set aside the order of the CIT (A) on this issue and delete the disallowance of depreciation
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