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TMI Blog2018 (11) TMI 1546X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the name of company. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 62,52,198/- on account of difference in receipts ignoring the fact that the assessee company failed to reconcile the difference between the declared receipts and- gross receipts. 4. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." CO No. 487/Del/2015 1 That learned Assistant Commissioner of Income Tax, Circle-3(1), New Delhi has grossly erred both in law and on facts in determining total income of the appellant company at Rs. 9,57,29,480/- as against returned income of the appellant company at Rs. 6,38,77,280/- in an order of assessment under section 143(3) of the Act dated 30.12.2011. 2 That the learned Assistant Commissioner of Income Tax has erred both in law and on facts in making an addition of Rs. 2,56,00,000/- representing alleged unexplained cash deposits in the bank account of the appellant company by invoking section 68 of the Act. 2.1 That the learned Assistant Commissioner of Income Tax has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves, leave to add, alter, delete or modify all or any of the above grounds of cross objections." 2. Brief facts of the case are as under: Assessee filed its return of income on 26/09/09, declaring income of Rs. 6,38,77,280/-. Return was processed under section 143 (1) of the Income Tax Act, 1961 (the Act), subsequently notices under section 143(2) was issued along with notice under section 143(1) and questionnaire. In response to statutory notices, representative of assessee appeared before Ld.AO and filed necessary details. 3. Ld.AO observed that assessee is engaged in business of advertising i.e. Print Media and Visual Media, as well as in event management, Ad film production, public relation services etc. 4. During assessment proceedings, Ld.AO observed that, certain cash transaction amounting to Rs. 2,30,00,000/- was appearing in bank account of assessee. Apart from that, cash was introduced in cash book of assessee, amounting to Rs. 2,60,00,000/-. Assessee was accordingly called upon to explain cash deposited in bank, and credited in cash book. Assessee was also required to prove identity, genuineness and creditworthiness within section 68 of the Act. Assessee vide reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar during financial year 2006-07 for a sum of Rs. 34,85,385/- and subsequent sale during year under consideration cannot be accepted. He submitted that assessee failed to prove identity of cash transaction. He placed reliance upon orders of Ld. AO in support of his arguments. 11. On the contrary, Ld.Counsel submitted that Rs. 25 lakhs represents cash credit in books of account on sale of car. It was submitted that assessee purchased car for Rs. 34,85,395/- during financial year 2006-07 and written down value of said car during year of purchase was Rs. 25,02,04/-. The said car was sold during the year under consideration for a sum of Rs. 25 lakhs. He submitted that confirmation copy dated 20/07/08 of purchase of car has been submitted to authorities below. Ld.AR further submitted that, assessee computed WDV of car from fixed assets and claimed depreciation on it, which has been allowed by Ld.AO in preceding Assessment Years. He thus submitted that no doubt can be raised on sale of car during year under consideration. 12. We have perused submissions advanced by both sides in the light of records placed before us. 13. Ld.CIT(A) while analysing the issue observed that addition relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve at the conclusion that the transactions were not genuine without merely doubting such transactions. Having regard to the above, addition made to the extent of Rs. 2,31,00,000/- is deleted." 13.2. We do not find any infirmity in aforestated observations of Ld.CIT(A) and more so when Ld.AO during remand proceedings has not challenged authenticity/veracity of documents filed by assessee, which was verified by him. It is further pertinent to note that assessee declared said sum as its income and there was full disclosure of such sum as has been recorded by Ld. CIT(A). We therefore do not find any infirmity in decision of Ld. CIT(A) in respect of cash found deposited in bank account amounting to Rs. 2,30,00,000/-. 14. Accordingly this ground raised by revenue stands dismissed. 15. Ground No. 2 is in respect of the addition amounting to Rs. 25 lakhs deleted by Ld.CIT(A) against cash receipts for sale of car. 15.1. Both parties before us argued upon this issue while arguing Ground No. 1 hereinabove. 16. We have perused submissions advanced by both sides in light of records placed before us. 17. It is observed from order passed by Ld.CIT(A) that assessee claimed depreciation of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s History Logistics (Prop. Mr. Sanjay Bhandari) in F.Y. 2006-07 relevant to A.Y. 2007-08 and written down value of the said car at the beginning of the instant financial year was Rs. 25,02,044/-. It was explained that the seller had provided the company all requisite documents at the time of purchase of the car and the appellant applied for registration of the said car in its favour with the appropriate authority. However the transfer of car in favor of the appellant company was refused by the registering authorities as the seller had committed some custom duty violations and the government authorities imposed blanket ban on transfer of all cars imported by the said seller M/s History Logistics. Thus to save itself from unnecessary legal hurdles the appellant company sold the car back to M/s History Logistics. The appellant also placed following evidences on record:- "i) Copy of Customs certificate dated 14-02-2007 evidencing import of Car by M/s History Logistics in the year 2005 (page 307 of paper book) ii) Copy of Form No. 29 and 30 duly signed by M/s History Logistics in favour of M/s Crayons Advertising Limited evidencing sale of car to the appellant by History Logistics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 62,52,198/-, being deleted by Ld.CIT (A). 22. Ld.Sr.DR submitted that assessee was required to furnish details of bills raised for advertising services. From details filed, it was observed by Ld.AO that billing amount of Rs. 1,52,16,35,741/,- was later on corrected to Rs. 1,39,04,40,325/-. He submitted that assessee when called upon to explain difference in gross receipts shown in P&L account and billing amount, it was submitted that, service tax amount was included in gross receipt. Assessee was accordingly called upon to furnish details of service tax amount. Ld.Sr.DR submitted that even after considering explanation offered by assessee, and taking into consideration service tax expenses included in gross receipt, there has been understatement of gross receipts to the extent of Rs. 62,52,198/-. 23. On the contrary Ld.Counsel placed heavy reliance upon reconciliation statement filed before Ld.CIT(A) which was sent to Ld. AO for remand. He relied upon specific observation of Ld. AO in remand report, which is reproduced in impugned order at page 26 which reads as under: "although the assessee company has explained the figures in written submission, but has failed to subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the deduction claimed by the appellant of Rs. 1,23,24,471/-. The appellant has provided branch wise client wise list on account of discount allowed to the clients or deductions made by the clients other than a sum of Rs. 45,00,000/- which represents rental income. The AO has not disputed the discounts/deductions but vis-a- vis rental income he has observed that the same cannot be accepted since it has not been supported by the relevant documents. However, I find that a copy of the agreement with M/s Mega Corporation Ltd. has been furnished in the Paper Book. The appellant has also enclosed copy of ledger account of rental income as part of the Paper Book. Thus, it is seen that during the instant year appellant had incurred an expenditure on rent of Rs. 1,33,63,632/- out of which Rs. 45,00,000/- was recovered from M/s Mega Corporation Ltd. and the appellant had claimed net expenditure on rent of Rs. 88,63,632/-. Thus once the AO has allowed deduction of rent at Rs. 88,63,632/- there remains no basis to suggest that such rental income should not be reduced from the gross receipt, as the same was netted separately from rental expenses. Having regard to the above, the addition ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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