TMI Blog2013 (7) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... icer noted that the assessee group hosts a lavish party at the residential farm house during every New Year where entry is strictly by invitation only. This expenditure has been claimed as business expenditure in the hands of concerned VH group. He referred to the assessment year pertaining to A.Y. 2007-08 where the issue is discussed and certain additions were made on the basis of certain seized documents. He, therefore, came to the conclusion that the assessee was following the same practice in all the years. He, therefore, asked the assessee to explain as to why such inference should not be drawn and why cash expenses for this year also should not be estimated in the ratio of the decision for the A.Y. 2007-08 during which certain evidences were seized which relate to A.Y. 2007-08. The assessee objected to the same. However, the Assessing Officer did not accept the contention of the assessee and made addition of ₹ 31.5 lakhs on account of 31st December party expenses. In appeal the Ld.CIT(A) following his decision in A.Y. 2003-04 directed the Assessing Officer to delete the addition. 2.2 Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 3. Af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee admitted that the addition on account of cash of ₹ 30 lakhs may be made in the hands of VHPL for A.Y. 2008- 09. The Assessing Officer accepted the above contention of the assessee that all the concerns in the group are effectively managed by Desai/Rao families and that the money generated in VHPL is utilised for payment of ₹ 30 lakhs for purchase of vintage car appears to be reasonable. He, however, made addition of ₹ 30 lakhs as unaccounted expenditure of the assessee u/s.69C for A.Y. 2008-09. 4.2 In appeal the Ld.CIT(A) deleted the addition by holding as under : 2.5 I have gone through the grounds and also considered submissions made by the appellant company and material available on record. I find that the Assessing Officer himself has observed that assessee s contention that money generated in VHPL is utilised for payment of ₹ 30 lacs for purchase of vintage car appears to be reasonable and is accepted. The Assessing Officer has however inadvertently made an addition in the computation of income. In view of this an addition of ₹ 30 lacs made in the computation of income ought to be deleted. The learned Assessing Officer is directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has offered only ₹ 13 crores as undisclosed income. Thus, there was a shortfall of ₹ 2,99,45,000/- in the declaration. On being questioned by the Assessing Officer, it was explained by the assessee that it was an inadvertent omission. However, it was submitted that the declaration was given on the basis of unaccounted receipts and application both. There was substantial duplication in the declaration given by the assessee and there was no need for a separate addition. However, the Assessing Officer was not satisfied with the above explanation and held that it does not stand the test of reason. According to him, the assessee was unable to explain the difference of ₹ 2.99 crores which denotes the unaccounted income of the beginning only. He accordingly made addition of ₹ 2,99,45,000/-. 6.2 Before the CIT(A) the assessee submitted that the addition is not at all justified. It was submitted that the total unaccounted sales were not ₹ 15.99 crores as held by the Assessing Officer but were around ₹ 6.35 crores only. Against this the assessee has already offered ₹ 13 crores as additional income. Therefore, further addition of ₹ 2.99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LAND 183.78 100.00 283.78 VEHICLE 30.00 30.00 REVENUE EXPS DIARY (TALLY) 572.45 263.51 835.96 REVENUE EXPS DIARY (TALLY)- VIL 54.00 15.00 69.00 REVENUE EXPS SEIZED 132.99 92.71 225.70 621.80 621.80 REVENUE EXPENSES B NO 1-6 DT 0.98 0.98 UTTARA FOODS DONATION 311.00 231.00 542.00 TOTAL PAYMENTS 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of ₹ 2.99 crores which has been upheld by the Ld.CIT(A). It is the case of the Ld. Counsel for the assessee that the seized documents contain the expenditure to the tune of ₹ 9.50 crores and the difference between unaccounted receipts and the cash expenses found in the seized documents is only ₹ 6.49 crores. As against this the assessee has already disclosed ₹ 13 crores as additional income and therefore no addition is called for. It is the alternate contention of Ld. Counsel for the assessee that only the net profit on the unaccounted receipt of ₹ 2.99 crores at best can be added in view of the series of decisions cited before him. 7.1 The assessee s submission that he has declared ₹ 13 crores as additional income is not disputed by the Assessing Officer or CIT(A). Further, the submission of the Ld. Counsel of the assessee that as against the unaccounted sale of ₹ 15.99 crores the seized documents show unrecorded cash expenditure to the tune of ₹ 9.50 crores and the difference between ₹ 15.99 crores and ₹ 9.50 crores being less than ₹ 13 crores declared by the assessee and therefore no addition is called for f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions with Mr. Dimpee were recorded are as under : Party No. Bundle No. Date of seizure Page No. PO-1 6 20-12-2008 47 PO-1 29 22-10-2008 63, 64 PO-1 6 20-12-2008 13 PO-1 1 2 22-10-2008 -- 8.2 The Assessing Officer asked the assessee to explain as to why this should not be added to its total income including interest in the respective assessment year. The assessee in its reply submitted as under: The assessee submits that it has not taken any loan from Mr. Dimpeee. It is submitted that the loose papers are rough papers and it is not known as to who had written and they belong to whom. We submit that as per our books and records, we have not taken any loan from Mr.Dimpeee. Thus, the question of making any repayment of the said loan does not arise. Therefore, we submit that no addition is to be made in respect of the repayme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has considered this amount as unexplained income in its return of income for A.Y. 2008-09. He further noted from the seized documents that the repayments of principal amount and interest have been made in the part of F.Y. 2007-08 and 2008-09. He accepted the contention of the assessee that the same were paid out of the cash available with it. Based on the cash flow statement filed by the assessee and noting from the scanned document that the loan has been taken during A.Y. 2008-09 which has already been declared by the assessee as unexplained income during A.Y. 2008-09 he deleted this addition. 8.7 Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 9. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. From the scanned copy of the seized document placed at Page No.63 and 64 of the Paper Book we find the loan was taken prior to 06-07-2007. The Ld. Departmental Representative could not controvert the factual finding given by the Ld.CIT(A) that the loan was taken prior to 06-07-2007 and therefore the same relates to A.Y. 2008-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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