TMI Blog2016 (1) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the detailed reasoning given by the Ld.CIT(A) we find no infirmity in his order deleting the addition of ₹ 19 lakhs in the hands of the assessee - Decided in favour of assessee Addition on account of unexplained expenditure - as per AO there are certain payments as per the SMSs which were not recorded in the books of account - CIT(A) deleted the addition - Held that:- .CIT(A) deleted the addition on the ground that the assessee has demonstrated that the amount of ₹ 2 lakhs related to M/s. Suyojit Infrastructure Pvt. Ltd. and does not belong to the assessee and the addition was made by the AO on surmises. Further, the SMSs revealed the payment of the impugned amount to Shri Bhatt and the SMSs nowhere contain that the payment is made on 21-10-2010. There is no material before the AO to the proposition that the impugned payment is made on 21-10-2010 and that too by the assessee. 30. So far as the other amount of ₹ 3,37,500/- is concerned the CIT(A) deleted the same on the ground that the same has been claimed to be paid to Shri Dwarka Prasad Agarwal, an employee of Suyojit Infrastructure Pvt. Ltd. for making payment to departmental labour. Since the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-2006 -do- 10.00 Total 19.00 4. On being questioned by the AO, it was explained by the assessee that the impugned amount was received by him in his capacity as director of M/s. Suyojit Infrastructure Ltd. (presently known as M/s. Suyojit Infrastructure Pvt. Ltd.) and for and on behalf of the partnership firm M/s. Suyojit Baug as advance against sale of Shop No. L-1 L-2 in the proposed project of M/s. Suyojit Baug, the construction of which was not yet started by the assessee or M/s. Suyojit Baug. It was submitted that the amount of ₹ 19 lakhs is towards part payment of total consideration of ₹ 2,16,00,000/- of the agreed amount of the proposed sale of shops. It was submitted that the said amount has been shown as liability in the books of the firm. A copy of the partnership deed was also filed. 5. However, the AO did not accept the explanation offered by the assessee and treated the said amount as unexplained cash receipts and added the same to the income of the assessee for reason that M/s. Suyojit Baug has not filed any inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of Director of the company M/s. Suyojit Infrastructure Pvt. Ltd. and the company M/s. M/s. Suyojit Infrastructure Pvt. Ltd. in turn is the partner in the said partnership firm M/s. Suyojig Baug. The said advance received from M/s. Gulab Maharu Badgujar HUF was accounted in the books of account of M/s. Suyojit Baug, the partnership firm. It was also explained to the AO that said amount of advance received from Gulab Maharu Badgujar (HUF) during the impugned year is not an income of M/s. Suyojit Baug as well as the assessee as the construction of said project for which the said advance was received is not yet commenced and therefore the said amount received from Gulab Maharu Badgujar HUF is a liability in the firm M/s. Suyojit Baug. 9. Based on the arguments advanced by the assessee the Ld.CIT(A) deleted the addition by observing as under : 5.2 I have carefully considered facts of the case, the assessment order and the rival submissions. It is undisputed fact that the impugned transaction is recorded in the books of account of M/s. Suyojit Baug. The A.O. has erred in rejecting the contention of the appellant just on the ground that the said firm has not filed any income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not justified in making the impugned addition of ₹ 19,00,000/- being amount received from Mr. Mrs. Badgujar as the same is a liability and not income particularly when the said transaction is disclosed by Mr. Mrs. Badgujar in their respective financial statements as advance given for purchase of shops in view of above, the impugned addition of ₹ 19,000/- is unjustified and is directed to be deleted. This ground of appeal No.1 is allowed. 10. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us with the following grounds : 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 19,00,000/- made by the AO on account of unexplained cash receipts. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that the incriminating document in Annexure A-8 which is a Red Dairy and Annexure A-7, loose paper bundle which contains cash receipts issued by the assessee is a direct evidence. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as accepted that cash receipts had been issued and signed by him and further accepted the same as unaccounted business receipts. Subsequently, the assessee in his reply to Question No.6 had voluntarily surrendered ₹ 2.98 crores as additional income for the current year. Since the receipts are specific and not recorded in the regular books of account and reflects the entire transactions of unexplained receipts, therefore, the subsequent retraction of the assessee is nothing but an afterthought. He accordingly submitted that the order of the CIT(A) be reversed and that of the AO be accepted. 12. The Ld. Counsel for the assessee on the other hand while supporting the order of the CIT(A) submitted that the partnership deed is dated 06-09-2003 which was reconstituted on 20-07-2006. Referring to the copy of the Panchanama in the case of Suyojit Infrastructure Pvt. Ltd. and others he drew the attention of the Bench to the list of inventories/books etc. found/seized during the course of search, copy of which is placed at page 11 of the paper book No.2. Referring to the copy of the audited profit and loss account of Suyojit Infrastructure Ltd. dated 30-08-2008 the Ld. Counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find in the instant case during the course of search a diary as per Annexure A8 was found from the residential premises of the assessee. Similarly, loose paper Bundle marked as Annexure A7 was also found. The seized documents contain the cash receipts issued by the assessee to Mr. Gulab Mrs. Yogita Badgujar amounting to ₹ 19 lakhs for the year. It was explained by the assessee that the said amount was received by him in his capacity as director of M/s. Suyojit Infrastructure Ltd. on behalf of the partnership firm M/s. Suyojit Baug as advance against sale of Shops L1 and L2 in the proposed project of Suyojit Baug. The construction of the said project was not yet started. However, we find the AO did not accept the contention of the assessee for the following reasons : 1. The partnership firm M/s. Suyojit Baug did not file any income tax return and the deed submitted by the assessee is not registered. 2. During the recording of the statement of the assessee in reply to Question No.37, the assessee has accepted that this cash receipts ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05- 06 to 2010-11 u/s.153A r.w.s 143(3) in the case of Ms. Suyojit Infrastructure Pvt. Ltd. has also asked the Managing Director of Suyojit Infrastructure Pvt. Ltd. regarding the MOU dated 09-07- 2006. The relevant queries raised by the AO are as under : 7. Pages 85 to 87 is a MOU dated 09-07-2006 (Stamp Paper No.06AA 6613165 between you and Shri Gulab M. Badgujar. As per this agreement you had agreed to transfer on rental basis of Shop No.G-44 to G-53, admeasuring 4,000 sq.ft. in Suyojit YEWS Compled for a sum of ₹ 1.20 crores, out of which sum of ₹ 15 Lacs was received by you on 09-07-2006 and balance amount was receivable by monthly instalments. Please explain whether the above transaction has been accounted in your regular books of accounts. If yes, furnish copy of relevant ledger account extract alongwith books of accounts, failing which the same will be assessed as your undisclosed income A.Y. 2007-08. 8. Page No.111 to 113 is a copy of MOU dated 05-04-2007 (Stamp Paper No.AF559067) between Shri Gulab M. Badgujar and you. As per this agreement you had entered into MOU as per which Flat No.9 to 12 on 3rd floor and Flat No. 13 on 4th floor admeasuring 10,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is dependent on the charging section, which needs to be strictly construed. Referring to the decision in CIT v. Bhaskar Mitter (1994) 73 Taxman 437 (Cal) at p. 442 (paragraph 8), we had occasion to so hold in the decision in Maynak Poddar (HUF) v. WTO (IT Appeal No. 84 of 1998, dated 24-2-2003). 20. In view of the above discussion and in view of the detailed reasoning given by the Ld.CIT(A) we find no infirmity in his order deleting the addition of ₹ 19 lakhs in the hands of the assessee. The order of CIT(A) is therefore upheld. Accordingly, the grounds raised by the Revenue are dismissed. ITA Nos. 1684 and 1685/PN/2013 (A.Yrs. 2007-08 2011-12) : 21. Identical grounds have been taken by the Revenue in ITA No.1684/PN/2013 for A.Y. 2007-08 and for A.Y. 2011-12. Following the same reasoning the grounds raised by the Revenue on this issue are accordingly dismissed. 22. There is one more ground in ITA No.1685/PN/2013 for A.Y. 2011-12 wherein the Revenue has challenged the order of the CIT(A) in deleting an amount of ₹ 5,37,500/- added by the AO on account of unexplained expenditure. 23. Facts of the case, in brief, are that during the course of searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector in many companies and also actively involved in day to day transactions of other companies or concerns. Therefore, the A.O. is not justified in making the impugned addition without bringing on record that the impugned payment was made on 21/08/2010 and that too by the appellant and in absence of any material on record the impugned addition of ₹ 2,00,000/- made by the A.O. is unjustified and is directed to be deleted. This part of ground of appeal is allowed. 6.2.1 As regards the another SMS of the same date of ₹ 3,37,500/- being paid to D.P., the same is claimed to be paid to Mr. Dwarka Prasad Agarwal, i.e. employee of M/s. Suyojit Infrastructure Pvt. Ltd. for making payment to departmental labour. This addition is also not justified for the same reasons as mentioned hereinabove because the contentions of the appellant appears to be bonafide as the impugned payment is given to staff of the said company in which the appellant is a director. Therefore, the A.O. is also not justified in making the impugned addition without bringing on record that the impugned payment was made on 21/08/2010 and that too by the appellant and in the absence of any material on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch action or in the post search inquiries to support the stand of the A.O. However, the contentions of the assessee are supported by the audited books of accounts of the assessee as well as agreement, etc. 29. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We find the AO in the instant case made addition of ₹ 5,37,500/- being unexplained expenditure on the ground that there are certain payments as per the SMSs which were not recorded in the books of account. Even if certain amounts were recorded in the books of accounts, the dates are not tallying, i.e. there is mismatch between the dates of SMSs and the dates of recording in the books of account. We find the Ld.CIT(A) deleted the addition on the ground that the assessee has demonstrated that the amount of ₹ 2 lakhs related to M/s. Suyojit Infrastructure Pvt. Ltd. and does not belong to the assessee and the addition was made by the AO on surmises. Further, the SMSs revealed the payment of the impugned amount to Shri Bhatt and the SMSs nowhere contain that the payment is made on 21-10-2010. There is no materi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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