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2023 (1) TMI 1216 - AT - Income TaxAssessment u/s 153A - Addition u/s 68 - bogus LTCG - As argued no incriminating material found during the course of search and therefore, no addition can be made in the hands of the assessee - HELD THAT:- During the course of search, the long-term capital gain earned by the assessee claimed as exempt under section 10 (38) of the act was found recorded in the books of account of these non-genuine companies. The statement recorded of the assessee under section 132 (4), assessee himself has explained whole modus operandi of the scheme and admitted that long-term capital gain claimed by the assessee and his family members and the companies is bogus, non-genuine and all out of many political and fraudulent transactions. Nothing is required to be unearthed during the course of search as more than enough incriminating material was already available with the search party confronted to the assessee were admitted having the unaccounted income. It is always not necessary that there have to be some paper trail, which should have been found during the course of search for making an addition. The statement made by the assessee confirming the information, admitting the unaccounted income, explaining the modus operandi of earning such income, naming the parties involved in such activity shows clear-cut evidences of earning unaccounted income. Therefore, we do not find any infirmity in the order of the learned CIT – A the extent holding that that the addition of unaccounted long-term capital gain which is proved to be bogus is based on material found during the course of search and satisfies all the conditions prescribed under section 153A - no merit in the cross objections of the assessee, hence it is dismissed. Telescoping of the gross profit addition in the hands of this assessee company - The appeal filed by the learned assessing officer is allowed for statistical purposes setting aside back to the file of the learned CIT – A to give clear-cut finding as to how merely an addition of ₹ 6 crores is enough where as bogus long-term capital gain earned is more than ₹ 120 crores. The learned CIT – A is also directed to give a specific finding year wise, amount twice, assessee wise with reasons that how telescoping of the long-term capital gain earned by individuals and companies can be subsumed in a meager addition of ₹ 6 crores in the hands of Hazel Mercantile Ltd. Addition u/s 14A r.w.r. 8D - HELD THAT:- CIT – A held that there is no dispute on applicability of section 14 A, the assessee is not given its working for the computation of disallowance, therefore the satisfaction recorded by the learned AO is correct. However, he held that the investment made by the assessee in its subsidiaries and where share capital and free reserve of the assessee stands at ₹ 616 crores, which is far in excess of the investment made in those subsidiary companies. Therefore he confirmed the disallowance only with respect to 0.5% of the administrative expenditure to ₹ 174634/–. No infirmity is pointed out. Therefore, the action of the learned CIT – A cannot be found fault with. Ground number 7 of the appeal of the assessee for assessment year 2014 – 15 is dismissed. These findings also apply to the assessment year 2015 – 16. Disallowance of 10% of business promotion expenses - In absence of any details furnished by the assessee, disallowance was confirmed. As we also do not have any other details, we do not have any hesitation in confirming the disallowance. Ground number 8 is dismissed. For other years, also the above finding covers the issue against the assessee. Addition with respect to certain transactions pertaining to one-company Sumilon industries Ltd - assessee argued seized paper is merely a loose paper and irrelevant and inadmissible as evidence - HELD THAT:- CIT – A considered the seized documents and held that an amount of ₹ 50 lakhs is written by hand against the above company and further there is an Angadia expenses on 30 July 2015 which clearly shows that assessee has sent the above amount through courier and commission is paid for the same. Accordingly applying the provisions of section 292C he confirmed the addition. We do not find any infirmity in the order of the learned CIT – A as the seized documents clearly shows the nature of the payment, the amount paid, the party to whom it is paid and the courier details showing the commission how it is paid. Therefore, the addition deserves to be confirmed. Appeal filed by the assessee for all these years are dismissed and appeal of the learned assessing officer are allowed for statistical purposes.
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