TMI Blog2014 (12) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... se, 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. - ITA No. 3039/Del/2009, CO No. 264/Del/09 - - - Dated:- 13-11-2014 - Shri H. S. Sidhu, J. M. And Shri J. Sudhakar Reddy, A.M.,JJ. For the Petitioner : Dr. Rakesh Gupta, Shri Rohan Khare, Advocate For the Respondent : Shri Shameer Sharma, SR. DR ORDER Per J. Sudhakar Reddy, Accountant Member This is an appeal filed by the revenue dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case and perusal of the papers on record and the orders of the authorities below we hold as follows :- 4.1. The facts relating to the addition of ₹ 32,24,772/- are brought out at para 8.1 and 8.2 of the Ld. CIT(A) s order at page 15. These are extracted for your ready reference 8.1 It has been observed by the Assessing Officer that during the course of survey operation, various computer sheets were also found in which the assessee has declared his net profit from ticketing business on day-to-day basis. These computer sheets have been arranged according to dates. Thereafter the net profit for the month of July 2005 was calculated after adding the net profit of each day of month of July 2005. This comes to ₹ 2,68,743/-. However, since the assessee is not maintaining his regular books of accounts, his net profit from ticketing business only for the assessment year 2005-06 is calculated as under :- Total Net Profit for the month of July 2005 ₹ 2,68,743/- No. of working days in a month 27 Net profit of one day ₹ 9,953/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee was a travel agent and the months of May, June and July are the peak season for travel agency business and this cannot be made the basis for addition in the entire year. That the Ld. Assessing Officer has arbitrarily calculated the profit for the F.Y. 2004-05 on daily basis as it is not possible that the assessee would earn under the same trend throughout the year. That while making the separate addition on the net profit earned during the respective period, the Ld. Assessing Officer has completely ignored and not given any reason for not taking into account the audited accounts, the balance sheet and profit loss account of the assessee for the respective period and the tax audit report furnished with the return. 10.3. It has further been submitted by the Ld. Authorised Representative that they are unable to make any further comments in this regard, as the documents in question were not made available to them during the course of the assessment proceedings or in the remand proceedings. It is a well established principle of law that any evidence gathered by the assessing officer cannot be used against the assessee without first confronting him with it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition of ₹ 32.24 lakhs made on this count is, accordingly, hereby deleted. 6. The Ld. DR could not controvert this factual finding of the Ld. CIT(A). The estimation of profit is not sustainable for the various reasons given by the Ld. CIT(A) in his order. The estimation by the AO is arbitrary and was rightly deleted by the Ld. CIT(A). 7. In the result this ground of the revenue is dismissed. 8. The next issue is the deletion of addition of ₹ 66.91 lakhs made by the Ld. CIT(A). 8.1 The facts leading to the addition are a) a survey was conducted in the case of Shri Ram Niwas Sharma, the assessee on 3.10.2005. The assessee was engaged in the business of booking of railway tickets. He was carrying on business in the name and style of M/s. International Travels Corporation. During the course of survey, in reply to a question , the assessee submitted that books of accounts are available with Shri V.P. Verma, CA. Despite opportunity the books were not produced. 9. During the course of survey, the AO observed that a black diary containing 105 pages were found at Chandni Chowk premises of the assessee. The entries in the black diary are reproduced at pages 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries. On the other hand this amount is substantiated by the amount of debtors outstanding in the balance sheet at ₹ 39,03,895/-. 11. There is a totaling mistake of ₹ 2,09,725/- made by the AO while making the total addition at ₹ 66.91 lakhs. 12. Later on para 13.9 and 13.10 Ld. CIT(A) observed as follows :- 13.9. It is observed that the appellant 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 aforesaid entries written under the narration run- 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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