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TMI Blog2012 (12) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... Vellore Institute of Technology on 06.06.2007 and as part of the search operation, the residence of the assessee, was also covered under search. A notice under section 153(A) was issued on 20.10.2008 requiring the assessee to file the returns of income for the assessment years 2002-03 to 2007-08. A notice under section 142(1) was issued calling for the return of income for the assessment year 2008-09. The assessments were completed under section 153(A) read with section 143(3) for the assessment years 2002-03 to 2007-08 and assessment was completed under section 143(3) of the Act for the assessment year 2008-09. While completing the assessments, the Assessing Officer made following additions towards inadequate drawings: Assessment year Addition made 2002-03 Rs..80,292/- 2003-04 Rs.. 1,01,916/- 2004-05 Rs..1,51,668/- 2005-06 Rs..1,99,572/- 2006-07 Rs..2,24,472/- 2007-08 Rs..2,38,284/- 2008-09 Rs..80,292/- 4. On appeal, the Commissioner of Income Tax (Appeals) deleted the additions against which, the Revenue is in appeal before us. 5. The counsel for the Revenue supported the orders of the Assessing Officer. 6. The counsel for the assessee relied on the orders of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve at a finding that appellant had "incurred" the amount estimated as drawings by the A.O. 3. In the absence of any finding of fact that the appellant had infact "incurred" the estimated expenditure on drawings, during the relevant financial years, the addition made towards drawings u/s 69C is bad in law. The appellant relied on the following decisions: i) CIT vs. Lubtec India Ltd. 311 ITR 175 (Del); ii) CIT vs. C.L. Khalri 282 ITR 97 (MP); iii) Prabhu Dayal Lallu Ram vs. ITO 63 TTJ 557 (Del); iv) M.P. Mallival vs. JCIT 10 SOT 319 (Hyd)(TM); v) ITO vs. L.N. Mehta (HUF) 77 TTJ 63 Jodhopur); vi) ACIT vs. K.H. Dhamdhere 19 SOT 201 (Coch); vii) Harakchand P. Vora vs. ACIT 68 TTJ 417 (Mum); viii) Pradip C. Patel vs. DCIT 58 TTJ 409 (Ahd); ix) Lakshmi Jewellery vs. ACIT 73 TTJ 981 (Mad); x) Om Prakash Sharma vs. DCIT 4 SOT 369 (Jaipur); xi) ITO vs. Dr. Anand Meenawat 43 TTJ 213 (Jaipur); xii) Mahaan Food Ltd. vs. DCIT 27 DTR (Del)(Trib) 185." 8. The Commissioner of Income Tax (Appeals) considering the submissions of the assessee and the reasons for making the addition by the Assessing Officer held that no material evidence was found to indicate any suppression of drawings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illai Road, Chennai. According to the Assessing Officer, the assessee paid Rs..2.75 crores as consideration in cash over and above the documentary value. The Assessing Officer came to such conclusion on an inference drawn by him with regard to the notings found mention in the diary in the assessee's wife's name. 12. On appeal, the assessee contended before the Commissioner of Income Tax (Appeals) that there is no fresh material evidence found in the search that the assessee paid this amount over and above the documentary value in purchasing the said property and infact the seller of the property himself denied receipt of any excess money and therefore, the said amount cannot be assessed under section 69B, but should be assessed only under the head "other sources" as offered by the assessee in its return of income. 13. The Commissioner of Income Tax (Appeals), considering the submissions of the assessee and the reasoning of the Assessing Officer in making the addition under section 69B held as under: "7. Assessment of Rs..2,85,00,000/- u/s 69B - A.Y. 2007-08 During the course of search in the residence of the appellant, the diary and laptop of the appellant's wife were perused by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea was that this money cannot be assessed u/s 69B as has been done but should rightly be assessed only under the head 'Other Sources' as returned by the appellant. 12. I have considered the arguments of the Id.AR, decisions cited as well as the facts and circumstances of the case. It is a fact that there is no finding of any investments made, but the AO had only assessed what has been offered by the appellant. The appellant had offered a higher amount which was not detected by the Assessing Officer. Section 69B can be invoked only when an excess of investment is detected which is not recorded in the books of accounts. Considering the facts and circumstances, the said income is to be assessed only under the head 'Other Sources' and not u/s 69B and the Assessing Officer: is directed accordingly." 14. On going through the order of the Commissioner of Income Tax (Appeals), we do not find any good reason to interfere with the order of the Commissioner of Income Tax (Appeals) as the Commissioner of Income Tax (Appeals) has recorded the finding of fact that the Assessing Officer had only assessed whatever was offered by the assessee and such sum was not detected by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. The counsel for the Revenue supported the order of the Assessing Officer. 20. The counsel for the assessee relied on the order of the Commissioner of Income Tax (Appeals). 21. The Commissioner of Income Tax (Appeals) considering the submissions of the assessee and the reasons for making the addition by the Assessing Officer deleted the addition holding as under: "16. I have considered the arguments of the ld. AR and the facts and circumstances. I am inclined to accept his arguments for the following reasons: 1. The proprietory concern by name Everbright Exports has been in existence right from the year 2004. It has been filing returns before the Assessing Officer at Vellore. It is not an after-thought. 2. There was sufficient cash balance available in the books of accounts relating to Everbright Exports, and these books of accounts have not been rejected by the Assessing Officer. 3. As the ld. AR submits, from the day of search, the appellant has been maintaining that the cash available was out of bank withdrawals. This explanation has not been disproved. 4. The appellant has been returning income the magnitude of which make the possession of Rs..7,00,000/- as in keeping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 10B of the Act. 27. The counsel for the assessee submitted that the Commissioner of Income Tax (Appeals) has not considered the additional ground raised by the assessee on deduction allowable under section 10B of the Act. The counsel for the assessee submitted that the assessee could not file the returns in time due to search proceedings and therefore, the assessee could not claim the deduction under section 10B by filing the returns in time. The counsel for the assessee placing reliance on the decision of the Delhi Bench of ITAT in the case of ACIT vs. Dhir Global Industrial (P) Ltd. [43 SOT 640] submits that as there was genuine and valid reason for the delay in filing the returns, it is not justified in rejecting the assessee's claim for deduction under section 10B. He submits that in the case of genuine hardship, relief can be granted by the appellate authority. The Commissioner of Income Tax (Appeals) in his order stated that the additional grounds of appeal are not considered as the assessee had not claimed any deduction at all in the return filed. 28. When the assessee is making a claim for the first time before the Commissioner of Income Tax (Appeals) it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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