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2015 (7) TMI 735 - ITAT MUMBAI

2015 (7) TMI 735 - ITAT MUMBAI - TMI - Addition u/s. 69C - CIT(A) deleted addition - Held that:- It is an undisputed fact that the assessee has filed explanation to each and every entry recorded in the alleged pocket diary. The additions made by the AO are mechanical for example on page-10 of the seized diary marked as A-1, there is no transaction of ₹ 52,000/- on 3.8.2006 or otherwise. Thus the addition made by the AO is without any substance. Further, the allegation of the AO that the pa .....

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e of search, ₹ 10 lakhs were surrendered in the name of the assessee which has been accepted by the Revenue. Restriction of the impugned addition to ₹ 5 lakhs is justified and therefore we decline to interfere. - Decided against revenue.

Disallowance of freight expenses - CIT(A) deleted addition - Held that:- A perusal of the chart to consider the ratio analysis in respect of freight income vis--vis freight charges clearly shows that the freight charges claimed by the ass .....

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se appeals have common grounds though quantum may defer, therefore, they were heard together and disposed of by this common order for the sake of convenience. 2. In both these appeals, the Revenue has challenged the order of the Ld. CIT(A) on two counts. First ground is in relation to the deletion of the addition made by the AO u/s. 69C of the Act and the second grievances relates to the deletion of the addition made by the AO on account of disallowance of freight expenses. 2.1. First we take up .....

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amp;S 2009-10 dtd.12.01.2010 on 25.01.2010 along with copy of seized documents relating to Shri Vikram V Mehta, a son of Shri Vijay J Mehta, which were incriminating in nature. Since the provisions u/s 153C are attracted, proceedings u/s 153C were initiated for A.Y.2002-03 to A.Y.2008-09 by issue of Notice u/s153C of the I.T. Act, 1961 on 19.03.2010. 2.2. The assessee is a proprietor of M/s. Vikram Transport Services which is engaged in the business of transport. During the course of search proc .....

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69) Pocket Diary 05.10.2007 Residence Goita Bldg., Flat No.32, 8th floor, Gamdevi Road, Mumbai. 2 A-2 (Page No.1 to 62) Pocket Diary 05.10.2007 -do- 3. A-3 (Page no.1 to 83) 05.10.2007 -do- 2.4. On analyzing the documents seized with the regular books of account maintained by the assessee, the Assessing Officer noticed that various transactions mentioned in the seized documents were not found recorded in the regular books of accounts. The AO has exhibited the details of such transaction on page- .....

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e letter dt. 8.2.2013. In his remand report, the AO stated that inspite of several opportunities given to the assessee, the assessee did not submit any concrete and satisfactory explanation nor he has furnished any evidence for verification as required. 3.1. When this remand report of the AO was confronted to the assessee, the assessee strongly submitted that the AO has sent his reply without doing any kind of enquiries and verifications from the appellant. Thereafter the assessee furnished a no .....

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The Ld. CIT(A) was convinced that all the figures noted in the pocket diary cannot be treated as unexplained expenditure, particularly when the assessee has given convincing explanation in respect of major entries in the pocket diary. The Ld. CIT(A) further observed that the AO has treated even the entries of cash deposits in the bank account, receipts already recorded in bank accounts and withdrawals recorded in capital account as unexplained expenditure. The Ld. CIT(A), however, observed that .....

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ore us. 5. The Ld. Departmental Representative strongly supported the assessment order relying upon each and every findings of the AO. 6. Per contra, the Ld. Counsel could not advance anything new other than what has been advanced before the First Appellate authority. 7. We have given a thoughtful consideration to the findings of the AO and the findings of the Ld. CIT(A) qua additions. With the assistance of the Ld. Counsel, we have also gone through the relevant documentary evidences brought on .....

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not correct, for example payment of ₹ 28,000/- made to Shree Krupa Roadlines is supported by FAPS, which is part of the paper book filed before the Revenue authorities. We have also gone through the remand report of the AO dt. 8.2.2013 which is exhibited at pages 153 and 154 of the paper book. We find force in the contention of the Ld. Counsel that the AO has submitted the remand report without any verification. Considering all these facts in totality and also considering the fact that at .....

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the assessee has claimed various expenses. The major expenses were claimed under the head freight expenses, bank interest. The assessee was specifically asked to produce the necessary bills and vouchers in support of expenses claimed. The AO observed that the assessee has not produced satisfactory evidences as most of the expenses debited to profit and loss account towards freight charges were incurred in cash. The AO found that the ratio of cash payments and cheque payments is 80:20. As proper .....

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ointing out any specific instance of any bogus or allowable business. It was further noticed to the Ld. CIT(A) that if such disallowances are sustained, then the net profit of the assessee would be around 16% which is unrealistic. After considering the facts and the submissions, the Ld. CIT(A) observed that the AO has not made any enquiry from any of the parties to whom freight charges were paid. The Ld. CIT(A) further observed that the AO has not pointed out any abnormal increase in the freight .....

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