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TMI Blog2015 (11) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) erred in law and on facts of the case in deleting the addition of RS.31 ,32,336/- made by the Assessing Officer on account of unexplained purchase u/s 69C of the Income Tax Act, 1961. 2. That the Commissioner of Income Tax (Appeals) erred in law and facts of the case in not confirming the Assessing Officer's observation that the entire sales of the assessee represented its income from undisclosed sources . 3. That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of RS.2,06,645/- made by the Assessing Officer by way of disallowance of 50% of expenditure and depreciation claimed by the assessee. 4. (a) The order of the CIT (A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." 3. The grounds raised in the Assessee's Cross Objection being CO No. 338/Del/2012 (A.Y. 2003-04) read as under:- "1. That in view of the facts & circumstances of the case and in law the CIT (A) has erred in not holding that the notice issued U/s 153C and the assessment order passed U/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized. On the basis of documents so found belonging to the assessee company, proceedings were initiated in the case of the assessee company u/s 153C read with section 153A of the I.T. Act. The case of assessee was initially centralized with ACIT, Central Circie-17 u/s 127 of the I.T. Act by Commissioner of Income Tax, Delhi-I, New Delhi vide order F.No. CIT-I/Cent./O9-10/1892 dated 05.01.2010. Notice u/s I53C was issued to the assessee by the then DCIT, Central Circle-17 on 08.07.20 1O, requiring the assessee company to file return within I5 days of the service of the notice. It was also stated in the letter attached to the notice that earlier notice u/s I53A issued on 06.07.2010 to the assessee company requiring it to file returns for the A.Y s. 2003-04 to 2008-09 within 15 days of the service of the notices, may be treated as withdrawn as it was inadvertently issued. In response to notice u/s 153C, the assessee filed a return for assessment year 2003-04 on 06/09/2010 declaring nil income. 4.1 The case was subsequently transferred to Central Circle-21 by an order u/s 127 of the LT. Act issued vide F.No. CIT(C)- II/CENT/2010-1111029 dated 19/10/2010. A copy of the panchnama, reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the purchases of various amounts respectively involved in each of the assessment years in question have been duly accounted for by the appellant in its books of accounts and more particularly when the books of accounts have not been rejected by the AO, no question of disallowance of purchases uls 69C arises. The judgement in the case of CIT vs. Mls Radhika Creation ITA No. 692/2009 by Hon'ble Delhi High Court is applicable to the present facts of the case as all the purchases are accounted in the regular books, the source is obviously explained. The provisions of sec 69C are not applicable as there was no unaccounted expenditure. It is also an admitted fact that the complete books of accounts were also produced before the AO and the same were examined. No defect was pointed out. Thus, the same stood accepted by the AO. It is settled law, that books of account maintained in the normal course of business are evidence under the 'Evidence Act' and 'Income Tax Act. During the course of assessment proceeding, the appellant has furnished full details of all expenses, sales, purchases and remaining closing stock, day wise details of sales, purchases, item-wise detail of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.No. A.Y. Amount (Rs.) 1 2003-04 31,32,336/- 2 2004-05 31,32,218/- 3 2005-06 34,36,870/- 4 2006-07 28,13,390/- 5 2007-08 19,58,310/- 6 2008-09 21,37,969/- The grounds are therefore allowed in favour of the appellant company." 8.2 After going through the aforesaid relevant paragraph of the impugned order on the issue involved in Ground No. 1 raised by the Revenue, we are of the considered view that the Ld. CIT(A) has deleted the addition in dispute on the basis of the judgment dated 30.4.2010 passed in ITA No. 692 of 2009 by the Hon'ble Jurisdictional High Court in the case of Commissioner of Income Tax- V vs. Radhika Creation. The Hon'ble Jurisdictional High Court has held that when all the purchases are accounted in the regular books of accounts, the source is explained and the provisions of section 69C are not applicable, as there was no unaccounted expenditure. The provisions of sec 69C are not applicable as there was no unaccounted expenditure. The complete books of accounts were also produced before the AO and the same were examined and the AO has not pointed out any defect in the books of accounts produced by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessment of the appellant company for the A.Y. 2002-03 has already been completed, wherein no disallowance of expenses made. I have also considered the fact that the assessment of the appellant Co. for the AY. 2005- 06, has been completed u/s 143(3) of the LT. Act by the ITO ward 3(4), New Delhi vide Assessing officer's order dated 30.03.2007, wherein working of the appellant company stood accepted and there in no disallowance of the expenses has been made. In the original assessment for the AY 2005-06, framed under section 143(3) of the I T Act by the AO., no disallowance of the expenses had been made. The AO. after application of mind and detailed scrutiny of accounts had consciously allowed the expenses. Further, the expenses had also been allowed in summary assessment u/s 143(1) of the I T Act for the AYs. 2003-2004, 2004-2005, 2006-2007, 2007-2008 and 2008-2009. In view of the above, in my considered opinion there is no substance in lump sum disallowance of the expenses in each of the respective assessment years, details as under:- S. No AY Amount (Rs.) 1. 2003-04 2,06,645/- 2. 2004-05 2,14,343/- 3. 2005-06 2,15,407/- 4. 2006-07 2,54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ightly directed to allow the same as per Income Tax Act Rules. Therefore, this ground was therefore allowed in favour of the assessee company. Keeping in view of the above, facts and circumstances of the case, we find that Ld. CIT(A) has rightly allowed the ground in dispute by passing a well reason order, which does not need any interference on our part, hence, we uphold the same and decide the issue in dispute involved in ground no. 3 against the Revenue. 9. As regards ITA No. 4130-4134/Del/2012 (AY 2004-05 - 2008- 09) are concerned, we find that the issues involved in these appeals are similar and identical and also the facts and circumstances of the case are also same to that of ITA No. 4129/Del/2012 (AY 2003-04) as decided by us as aforesaid, wherein we uphold the order of the Ld. CIT(A) on both the issues in dispute. Keeping in view of the above, we uphold the orders of the Ld. CIT(A) in respect of the assessment years 2004-05 to 2008-09 also and decide the issue against the Revenue by dismissing all the 6 the appeals filed by the Revenue. ASSESSEE'S CROSS OBJECTION 10. At the time of hearing, Ld. Counsel of the assessee argued the issued involved in ground no. 3 of the Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dictional High Court decision dated 28.8.2015 in the case of CIT vs. Kabul Chawla passed in ITA No. 707, 709 and 713/2014 wherein vide para no. 38 it has been held as under:- "38. The present appeals concern AYs 2002-03, 2005-06 and 2006-07. On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made ot the income already assessed." 12.1 In the background of the aforesaid discussions and precedent, we are of the considered view that the present issue involved in ground no. 3 in the cross objection is squarely covered by the decision of the Hon'ble Jurisdictional High Court decision dated 28.8.2015 in the case of CIT vs. Kabul Chawla passed in ITA No. 707, 709 and 713/2014. Respectfully, following the above precedent, we quash the assessment made u/s. 153C and decide the issue in dispute in favour of the assessee and accordingly, the cross objection is allowed on this ground. 13. Secondly, Ld. Counsel of the assessee stated that AO has not recorded the Satisfaction before issuing the notice u/s. 153C of the I.T. Act to the assessee and in the absence of recording the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n would have to be recorded separately qua the searched person and the assessee." 14.1 In the background of the aforesaid discussions and precedent, we are of the considered view that the present issue in dispute raised in the cross objection is squarely covered by the decision of the Hon'ble Jurisdictional High Court in the case of Pr. Commissioner of Income Tax (Central-II) vs. Aakash Arogya Mandir Pvt. Ltd. & Anr. Dated 28.7.2015 decided in ITA No. 509/2015 & Others. Respectfully, following the above precedent, we also quash the assessment made u/s. 153C on this ground and decide the issue in dispute in favour of the assessee and accordingly, the cross objection is allowed on this ground. In the result, the Cross Objection filed by the assessee being CO No. 338/Del/2012 (AY 2003-04) stands allowed in the aforesaid manner. 15. Since we have dealt the effective grounds raised in the Cross Objections of the Assessee, hence, the other issues raised in the Cross Objection, need not be adjudicated upon, hence, we are not dealing the same. 16. As regards C.O. No. 339-343/Del/2012 (AY 2004-05 - 2008-09) are concerned, we find that the issues involved in these Cross Objections are si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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