TMI Blog2012 (10) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER B.C. MEENA, ACCOUNTANT MEMBER The appeal and cross objection filed by the revenue and the assessee respectively emanate from the order of the CIT (Appeals)-II, Delhi dated 06.02.2012. The grounds of revenue s appeal read as under :- 1. That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of ₹ 40,83,460/- made by the Assessing Officer on account of unexplained purchases u/s 69C of the Income-tax Act, 1961. 2. That the Commissioner of Income Tax (Appeals) erred in law and on facts in accepting the transaction of sale and purchase made in cash as genuine. 3. That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of ₹ 75,867/- made by the Assessing Officer by way of 50% disallowance of expenditure claimed by the assessee. 4. That the Commissioner of Income Tax (Appeals) erred in law and on facts in holding that the statements of various person without being confronted to the assessee have no evidentiary value and they did not have any connection with the assessee, without properly appreciating the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication money inward of ₹ 2,12,20,000/- (Schedule E ). Total administrative and other expenses debited in P L account are ₹ 1,51,735/- (Schedule I ). The total purchases and sales as per P L account are ₹ 40,83,460/- and ₹ 42,42,525/- respectively. There is no opening and closing stock as per accounts. 3. At the outset of the hearing, the ld. AR submitted that the issue raised in appeal of the revenue in ground nos.1 2 are covered in favour of the assessee by three decisions of coordinate Benches of ITAT, Delhi Benches. In those cases also, the order of Assessing Officer was of Central Circle 21. The CIT (A)-II was also the same. The Assessing Officer and the CIT (A) are same in assessee s case. In those cases, the additions were also made on account of same findings and conclusions as arrived made by the Assessing Officer in assessee case. In all these cases, the trade was textile and books of account and registers filed were not rejected. Same is the case of the assessee. Ld. AR made available the copies of these three decisions of ITAT, Delhi Benches in the case of ACIT, Central Circle 21, New Delhi vs. Blue Luxury Impex Pvt. Ltd. in ITA Nos.5495 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs to have been made by the Assessing Officer. 4. The case before us has two dimensions. The first being as to whether the Assessing Officer was right in treating the said sum of ₹ 44,38,997/- as unexplained expenditure under Section 69C of the said Act. The second aspect is whether the said addition could legitimately have been made in the course of a block assessment. 5. Insofar as the first aspect of the matter is concerned, we find that Section 69C clearly stipulates that where, in any financial year, the assessee has incurred an expenditure and he offers no explanation about the source of such expenditure or part thereof , or the explanation, if it is offered by him, is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year. Thus, the focus of Section 69C is on the source of such expenditure and not on the authenticity of the expenditure itself. It is an admitted position that the expenditure was shown by the assessee in its regular books of accounts and it is because of this reason that the Income-tax Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as because of this reason that the ITAT observed as under :- As the expenditure was accounted in the regular books, the source is obviously explained. The provisions of section 69C are not applicable as there was no unaccounted expenditure. [Emphasis supplied] 6.1 Hon ble High Court, accordingly, held that section 69C refers to the source of the expenditure and not to the expenditure itself. Consequently, the AO was clearly wrong in treating the said expenditure as unexplained expenditure under section 69C of the said Act and the lower appellate authorities were right in their conclusions in deleting the said addition, Hon ble Court concluded. 6.2 In the instant case before us, indisputably, the purchases and sales are accounted for in the books of accounts. Thus, source of the expenditure incurred in purchases is obviously explained. In the light of view taken in the their aforesaid decision by the Hon'ble jurisdictional High Court ,especially when the Revenue did not place any material before us, controverting the aforesaid findings of facts recorded by the ld. CIT(A) so as to enable us to take a different view in the matter, we have no basis to interfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.04.2010, rendered by the Hon'ble Delhi High Court, held the provisions of Section 69-C of the Act to be not applicable. Further, the matter is also covered by Babulal C. Borana , 282 ITR 251 (Bom), which is on similar lines. 10. In view of the above, we do not find any error in the orders passed by the Ld. CIT (A) and, accordingly, the same are confirmed. The grievance raised by the department by way of the grounds of appeal taken is, therefore, rejected. The ITAT in the case of ACIT vs. AA Testronics Solutions Pvt. Ltd., cited supra, has held as under :- 8. Having considered the written submissions filed on behalf of the assessee and the contentions of the Ld. DR, it is seen that the matter is indeed covered in favour of the assessee by Anupama Links Pvt. Ltd. (supra). The first and foremost, the search in the case of the assessee is the same as that in Anupama Links Pvt. Ltd. . The Assessing Officer in the two cases is also the same. The trade of both the assessees is one and the same i.e., trade of textiles. Then, in both cases, books and stock register were filed and the Assessing Officer did not reject the same. The Ld. CIT (A) has, as noted hereina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. 7. We have heard both the sides on the issue. First of all, we would like to state that there was a clerical mistake in respect of quantum of disallowance which has been rectified by the CIT (A). Further, the disallowance was made completely on ad hoc basis. No defect was pointed out in the expenditure claimed. The revenue has failed to establish that these expenditure were not incurred wholly and exclusively for the purpose of the business of the assessee. The CIT (A) has granted the relief by relying on various decisions of Hon'ble Delhi High Court. The Hon'ble Delhi High Court held that additions made on ad hoc basis are liable to be deleted. The Assessing Officer in this case has failed to pinpoint which expenditure was not verifiable and were not for business purposes of the assessee. Looking these facts in view, we dismiss these grounds of revenue s appeal. 7. Since we have dismissed the revenue s appeal and the ld. AR has not pressed the cross objection, therefore, the same also stands dismissed. 8. In the result, the appeal of the revenue as well as the cross objection of the assessee stand dismissed. Order pronounced in open court on this 31st ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
