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2015 (5) TMI 421 - ITAT DELHI

2015 (5) TMI 421 - ITAT DELHI - TMI - Income from other unexplained source - CIT(A) deleted the addition - Held that:- In the present case, it appears that the assessee furnished all the relevant details along with the books of accounts before the ld. CIT(A) who forwarded the same to the AO for his examination. However, the AO in his remand report did not point out any specific discrepancy in those books of accounts and other details. The AO had not given any reason for making the addition of &# .....

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to treat the receipt of ₹ 14,23,065/- as business receipts. No valid ground to interfere with the findings of the ld. CIT(A) - Decided against revenue.

Disallowance of depreciation - CIT(A) deleted the addition in part - Held that:- the assessee was having old assets with opening written down value of ₹ 13,14,240/- and purchased new assets of ₹ 3,87,680/-. The ld. CIT(A) found that out of the aforesaid new assets three bills were in the name of Rohit Bhardwaj and no .....

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Decided against revenue.

Unexplained expenses - CIT(A) deleted the addition - Held that:- In the present case, it appears that the AO made the disallowance of almost all the expenses claimed by the assessee by presuming that no business activity was undertaken by the assessee. On the contrary the AO admitted the receipts of ₹ 14,23,065/- which were on account of machinery hire chargers and earth excavation. The assessee was also engaged in the business of laying underground cabl .....

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K. Saini And Sh. A. T. Varkey JJ. For the Appellant : Dr. Rakesh Gupta, Adv. For the Respondent : Sh. B. R. R. Kumar, Sr. DR ORDER 1Per N.K. Saini, A.M. The appeal by the Department and the Cross Objection by the assessee are directed against the order dated 24.03.2011 of ld. CIT(A)- V, New Delhi. 2. First we will deal with the appeal of the Department. Following grounds have been raised in this appeal:- 1. The Ld. CIT(A) has erred on facts and in law in deleting addition of ₹ 26,34,866/- .....

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has erred on facts and in law in deleting addition of ₹ 9,17,946/- on account of unexplained expenses ignoring that the assessee failed to produce any bill with respect to the expenses claimed and also failed to submit any evidence with respect of any business being conducted by the assessee. 4. The appellant craves leaves for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal 3. Vide Ground No. 1 the .....

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u/s 144 of the Act. According to the AO, the assessee had not filed any details of hire charges earned by it amounting to ₹ 14,23,065/-. He also noticed that almost all the receipts were received in cash except a few amounting to ₹ 5,00,000/- and that there was another receipts of ₹ 12,11,801/- to which no explanation was offered. The AO added ₹ 26,34,866/- (Rs.14,23,065/- + ₹ 12,11,801/-) considering the same as income from other sources. 4. Being aggrieved the as .....

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our good self that the completion of assessment u/s 144 of the Act was bad in law and facts and illegal and unjustified. The assessee is a company existing on the records of the Government of India. The assessee company is doing business for last 10 years. Moreover, during the course of assessment proceedings the assessee company has submitted requisite details along with the reply before Ld. AO. Therefore, observations of the Ld. AO in the first part of the assessment order that there was no co .....

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tion that no replies were filed was just in the air and factually incorrect, unfair and unjustified. In this regard, it is seen from the perusal of note sheet entries that the sufficient opportunities were given to the assessee to produce the details with regards to the nature of receipts. In this back ground of the facts, the contention of the assessee that proper opportunities were not provided is erroneous and should be rejected. It is submitted that the AO had not made an addition of ₹ .....

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ed as these are found to be from undisclosed sources. It has specifically mentioned in the order that the receipts shown by the assessee was less than what was shown in the copy of Bank Accounts of the assessee company. Since, it was found that the assessee had shown all bogus activities, the entire receipts as per the bank account was added. Hence, it is seen that there is no ambiguity in the figures. In view of above, it is requested that the contention of the assessee is wrong footed and shou .....

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not provided before passing ex-parte order u/s 144, it may kindly be seen that even in the remand report, ld. AO is not able to controvert the facts that no show cause was issued to the assessee company before making the impugned addition of ₹ 26,34,866/-. The requisite details were filed before the AO during the course of assessment proceedings. All details with regard to expenses claimed, details of hire charges received out of hiring of earth-moving machinery of ₹ 14,23,065/- for .....

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d also with reply submitted dated 17.11.2008 (Refer PB 31). Ld. AO in para 2.1 of the impugned order has mentioned that AR of the assessee appeared on 17.11.2008, but the copy of bank account was not filed, and subsequently in the same breath it is stated that neither any details were filed nor the books of accounts along with bills and vouchers were produced, whereas the fact is that all requisites details with reference of books of account were duly filed by the assessee during the course of a .....

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the course of appellate proceedings by way of written submissions submitted. Detailed supporting evidences, with books of accounts were submitted in the paper book as well which were forwarded to the ld. AO by your predecessor CIT(A), but ignoring the same the ld. AO has again mentioned that the books of accounts were not produced. Ld. AO could not specify even in the remand proceedings as to what is the basis for arriving at a figure of ₹ 12,11,801/- or ₹ 26,34,866/-. In the remand .....

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he assessee company. PB 51-52 is copy of the bank Account of Bank of India, and PB 53-54 is copy of the bank account of Syndicate Bank. Even complete total of these accounts do not reach to the figure of ₹ 26,34,866/-. Ld. AO has mentioned that entire receipts as per the bank account was added is again appears to be without considering the paper book submitted by the assessee, and the details filed therein. To sum up the ld. AO could not make any justification for making an imaginary addit .....

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bly submitted that the additional evidences may kindly be admitted, as these go to the root of the matter, and even no ex-parte assessment can be made just on presumptions and assumptions, and without considering the material available on records and filed by the assessee during the course of assessment proceedings. It is once again respectfully submitted that assessee is ready to produce the books of accounts with complete vouchers before you Honour as well, if considered necessary. It is there .....

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assessee which shows that there was appearance from the assessee s side and the details were furnished. Therefore, the action of the AO framing the assessment u/s 144 of the Act was not justified. 7. The ld. CIT(A) after considering the submissions of the assessee and the remand report of the AO observed that the assessee appeared on various dates and filed some details before the AO. He further observed that the AO did not issue any show cause notice before making ex-parte order to show on what .....

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ooks of accounts furnished by the assessee. The ld. CIT(A) observed that the paper book of the assessee containing books of accounts was forwarded which had been examined by the AO who did not find any discrepancy in those and had not commented on the evidences furnished by the assessee. He also observed that the AO had not given any reason for making the addition of ₹ 12,11,801/-. Accordingly, the said addition was deleted. As regards to the remaining amount of ₹ 14,23,065/-, the ld .....

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strongly supported the order of the AO and reiterated the observations made in the assessment order. In his rival submissions the ld. Counsel for the assessee reiterated the submissions made before the authorities below and strongly supported the impugned order passed by the ld. CIT(A). 9. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it appears that the assessee furnished all the relevant details alo .....

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377; 12,11,801/- which were arbitrarily added by the AO separately. In the present case, the assessee was carrying out the business of laying underground cable wires/excavation work and received hiring charges of ₹ 14,23,065/-, therefore, the ld. CIT(A) was justified in directing the AO to treat the receipt of ₹ 14,23,065/- as business receipts. We do not see any valid ground to interfere with the findings of the ld. CIT(A) on this issue. 10. The next issue vide Ground No. 2 relates .....

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assessee carried the matter to the ld. CIT(A) and submitted that the assessee furnished the copies of bills for the assets purchased during the year aggregating to ₹ 3,87,680/- and further submitted that a car for ₹ 60,120/- was purchased by the assessee on 11.02.2006 as per the sale letter and delivery receipt whereas the opening written down value of the car was ₹ 6,08,852/-. It was also pointed out that the depreciation was claimed on account of other assets and that the ope .....

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nt of ₹ 18,000/- to Darshan Singh for furniture making and ₹ 10,087/- to painter Chotte Lal for labour charges. It was also observed that the aforesaid two bills revealed that the timber was purchased in the name of Rohit Bhardwaj and one bill amounting to ₹ 38,561/- for wooden purchased from Durga Timber Trading Company was also in the name of Rohit Bhardwaj, Palam Vihar. The ld. CIT(A) held that the depreciation was not allowable on the above said payments of ₹ 38,561/- .....

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h opening written down value of ₹ 13,14,240/- and purchased new assets of ₹ 3,87,680/-. The ld. CIT(A) found that out of the aforesaid new assets three bills were in the name of Rohit Bhardwaj and not in the name of the assessee company. Therefore, the depreciation was not allowable on those new assets and the ld. CIT(A) rightly directed the AO in not allowing the deprecation on the furniture amounting to ₹ 66,648/- (Rs.38,561/- + ₹ 18,000 + ₹ 10,087/-). In respect .....

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he expenses claimed and there was no indication of any business activity. However, the AO allowed only ₹ 84,827/- out of the total expenses claimed at ₹ 9,17,946/-. 16. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the complete set of books of accounts was furnished during the course of appellate proceedings which were examined by the AO who did not make any adverse remark on the books furnished or expenses incurred. It was further stated that t .....

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ing stock, the assessee furnished the details which included building material e.g. brick, sand, stones etc. and submitted that the assessee was engaged in the business of lying of underground cables and this project required user of machinery, the building material for excavation and refilling/leveling of the land after laying the cable. 17. The ld. CIT(A) after considering the submissions of the assessee observed that the expenses claimed by the assessee did not include expenses of personal na .....

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for purchases and the expenses claimed in the books of accounts. He further stated that from the detail of the closing stock it was not clear as the same was used to which business of the assessee. Therefore, the AO rightly made the disallowance and the ld. CIT(A) was not justified in deleting the same. 19. In his rival submissions the ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the expenses were incurred for the business .....

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