9911796707
TMI Blog2015 (7) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure of the company, as is evident form reply of the assessee to question no.10, in his statement dated 19.10.2007, recorded under section 132(4) of the I T Act. 2. The Appellant craves to leave to add, to amend and / or to alter any of the grounds of appeal; if need be. 3. The appellant, therefore, prays that on the grounds stated above, the order of the CIT(A) -39, Mumbai may be set aside and that of the Assessing Officer restored." 3. The Revenue in this appeal is aggrieved by action of CIT(A) in deleting the addition of Rs. 3,13,38,798/- out of the total addition of Rs. 5,81,07,680/- made by the Assessing Officer (hereinafter referred to as the AO) into the returned income of Rs. 6,25,65,246/- of the assessee. 4. The brief facts of the case under consideration are that the assessee is the Managing Director of the company 'M/s Nitin Fire Protection Industries Ltd.' which is engaged in manufacturing of Fire Fighting Equipments etc.. The said company and the other group companies are controlled by the assessee, his family members and associates. A search operation was carried on 6.9.2007 under section 132 of the income tax Act in the case of Group Companies known as 'Nit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d my further embarrassment and in larger interest of the group business, M/s Nitin Cylinders Ltd. would not make claim of depreciation on the amount of Rs. 3,13,07,498/-. The AO thereafter observed that the cheques were discounted by the Director and the cash had been withdrawn / siphoned off by him as the respective parties in whose favour those cheques were issued and debited in the books of NCL had confirmed that those cheque payments had not been made to them. The AO, therefore required the assessee to explain as to why above stated amount of Rs. 3.15 crores should not be taxed in the hands of the assessee. The assessee in his response vide letter dated 22.12.09 submitted that the amount of Rs. 3.15 Crore capitalized in Nitin Cylinders Ltd., no depreciation had been claimed. Further the said amount had already been offered to tax by the assessee in his individual capacity as the assessee had voluntarily disclosed the sum of Rs. 6.85 crores and due taxes thereon had been paid. This disclosure was reflected in Return of Income of respective years. The assessee had never entered or indulged in any transactions relating to the commodity trading in grey market or on commodity excha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before the Ld. CIT(A). 8. During the appellate proceedings before the CIT(A), the assessee relied upon the affidavits of Shri Balkrishna Solkar and Shri K. Mandher and their statements recorded on 21-04-2011 before Asst. Commissioner of Income Tax, and contended that the sum of Rs. 3.13 Crore had already been owned up by Shri Balkrishna Solkar and that the group company Nitin Cylinders Ltd. had not claimed any depreciation under I. T. Act on this sum of Rs. 3.13 Crore capitalized in Nitin Cylinders Ltd. He further contended that this fact of owning up of the amount was stated in the assessment order of Nitin Cylinders Ltd. and that none of the said facts was refuted or controverted by the AO.It was therefore contended that the said sum of Rs. 3,13,38,798/ - was wrongfully added in the hands of the assessee. That this was a case of double addition of the same income. Further that it was very clearly stated by the assessee in his statement that Rs. 5.00 Crorcs were declared to cover up all such discrepancies or deficiencies which could arise during the assessment of group companies. Without prejudice, the assessee submitted that even vide submissions dated 22-12-2009 before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, I state that the sum of my voluntary disclosure of Rs. 5 Crores for A. Y. 2008-2009 is pursuant to the above and/or other discrepancies which may arise during investigation/assessment in different companies/ concerns/in different companies/concerns individuals /huf assessee of Nitin Fire Groups. vi) The sum of Rs. 1.82 crores is for covering the various issues, such as 25% of Rs. 1.19 lacs amounts spent in Alert Fire Protection Ind. Ltd. (group company) towards party on IPO success of Nitin Fire Protection Ind. Ltd. and same is coincidence with the birth date of Mr. Nitin M. Shah and the 25% of Rs. 3.29 lacs being hotel bill of ITC partly for business promotion with the foreigners on the occasion Marriage of Mr. Kunal Shah and all and/or any and/or sundry discrepancies which may arise during investigation/assessment in different companies/concerns /individuals/huf assessee of Nitin Fire Groups. This disclosure, may also cover any purchase of steel differences in M/s. Nitin Cylinders Ltd. c. It is humbly submitted that voluntary disclosure of income is much higher than the discrepancies and the same is made as a gesture of co-operation with I.T. Department." 9. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u have failed to consider our submission and you are making addition of various parties (without any opportunity of cross examination by us) who have confirmed the business and transactions as per our books of account. 6. You are requested to take note of the above facts while finalizing the assessment order." 10. The Ld. CIT(A) after considering the submissions of the assessee and appreciating the evidences on the file deleted the additions on this issue observing as under: "9. 1 have perused the records, considered the submissions and documents placed on record. I have also taken into consideration the assessment framed under s.143(3) in the case M/s. Nitin Cylinders Ltd., for the same year i.e. 2008-09. In the assessment of M/s. Nitin Cylinders Ltd. for the A.Y 2008-09, based on the findings in the course of the search conducted on the group and also based on the post search enquiries conducted, an aggregate sum of Rs. 5,81,03,042/- (Rs.3,15,00,000/- + 2,66,03,042/-) had been held as bogus capital expenditure and hence it was held that the same is to be reduced from the fixed assets and depreciation on the same to be disallowed. In this context it is to be pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered the rival contentions of the Ld. Representatives of the parties. In our view, the Ld. CIT(A) has rightly observed that the assessee had declared a sum of Rs. 5 crores for the year under consideration. The said disclosure was on account of various discrepancies/deficiencies that may be noted in relation to claim of additions to the fixed assets in the case of M/s. Nitin Cylinders Ltd. and also to take care of other issues. So far the contention of the department that the assessee had stated the same as unaccounted income in relation to commodity transactions in grey market is concerned, it may be observed that neither any evidence in this regard was found during the course of search action nor in the investigations during assessment proceedings. The AO had made no enquiries in this respect. He has just relied upon the statement of the assessee made during search action, that in these type of transactions, no evidence generally is available. When there was no evidence found or detected nor there is any contention of the revenue that any evidence in this respect has been concealed by the assessee, then under such circumstances, it has not been explained by the Department as to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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