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2018 (11) TMI 1429 - AT - Income TaxAddition being the difference between the income surrendered and the income shown in the return of income - Held that:- As noted in para number 4.3.4 where the assessee has stated that he had sold of all the machinery to scrap dealers and there were no machineries with him, however the department found Guthka making machinery being operated with generator sets and raw materials as well as finished goods in the appellant’s premises. In the statement dated 17/12/2000 , date the assessee admitted that he was not only having the such machinery but also surrendered ₹ 35 lakhs towards investment in the machinery and unaccounted income from the said activity for assessment year 2009-10 and ₹ 2 lakhs for assessment year 2008 – 09. This was also confirmed by submitting a letter dated 26/9/2008. Assessee also did not submit in the letter that why is he disclosing income and its application both. Further, the assessee has also disclosed major sums for miscellaneous income for which no break up was given. Assessee has never explained his disclosure before AO. For the reasons given by the learned commissioner Appeals in para number 4.3.5 also we are not inclined to interfere in the orders of the lower authorities and therefore the addition of ₹ 2 lakhs is confirmed. Accordingly, ground number one of the appeal of the assessee is dismissed. Disallowance with respect to loss of two proprietary concerns - Held that:- AO found that machineries of Guthka were running in business premises of assessee on generator, these two facts goes a long way to show that the business of the proprietary concern is not closed. Further in this year, business income is taxed as a part of disclosure, then where from these income is generated other than these two proprietary business of the assessee, is not shown. It is also unfair to tax the income as business income, and not to grant benefit of losses resulting out of expenses of that income. In view of this, we are not inclined to uphold the orders of the lower authorities and therefore we direct the learned assessing officer to allow the loss because of business losses of the proprietary concern. In the result ground number two of the appeal of the assessee is allowed. Disallowance of expenses of personal nature - Held that:- Before the learned commissioner appeals the assessee produced the profit and loss account of one proprietary concern but not of the second proprietary concern. The expenditure in the nature of the copy charges of hard disk are not appearing either in the profit and loss account of any of the proprietary concerns. This expenditure has been debited in the appellant’s individual income and expenditure account. The learned commissioner appeals has noted that the total income and expenditure account claim of the assessee shows that assessee has claimed the expenditure of ₹ 115130/– towards hard disk copy charges in interest expenditure. Out of these the assessing officer disallowed only ₹ 5 6130/–. In absence of the complete details filed before the lower authorities, as mentioned by the learned commissioner of income tax appeals we do not interfere in the finding of lower authorities on disallowance of ₹ 5 6130 out of the total expenditure incurred by the assessee. Penalty u/s 271AAA - Held that:- It was not shown by the revenue that whether the assessee was given an opportunity to explain the source of the undisclosed income and specify the manner in which the undisclosed income, surrendered during the course of search, had been derived. Therefore, the issue is squarely covered in favour of the assessee by the decision of the honourable Delhi High Court in case of principal CIT vs Emirates Technologies Private Limited.[2017 (8) TMI 387 - DELHI HIGH COURT]. We direct the learned assessing officer to delete the penalty of ₹ 3.5 lakhs under section 271 AAA - Decided in favour of the assessee.
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