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2018 (12) TMI 458

Addition on account of Rental income - addition on the statement of Shri. Anil Kashinath Khode given at the time of survey - addition based on diaries found in survey - Held that:- The impounded diaries are not prepared by the assessee but by third party and there is no signature of the assessee to even remotely suggest that the assessee has been paid rent by Shri. Kashinath Khemsa Khode for carrying out liquor business under the Excise Licence of the assessee. - While it is true that admis .....

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- Held that:- as the assessee’s books of accounts have been audited u/s 44AB of the Act; copies of challans for payment of Excise Licence Fees to government are filed to corroborate the assessee’s claims for such expenditure and the fact that the assessee admittedly carried on the business of sale of liquor during the impugned Assessment Years 2012-13 and 2013-14, I am of the view that the same is allowable expenditure. In the light of the aforesaid evidence and in this view of the matter, the d .....

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. Since the issues involved in all these 3 appeals are identical and the background facts are common, these appeals are disposed off by way of this common order for the sake of convenience. 2. Briefly stated, the facts of the case are as under: 2.1 The assessee, an individual, is partner in M/s. Jayalakshmi Wine Centre and M/s. Shringar Peg Bar, Hubli, which firms are carrying out retail liquor business. The details of returns of income filed and income declared for Assessment Years 2011-12 to 2 .....

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Wines were made in the name of the assessee. Certain material in the form of loose sheets, note books and diaries were also found and impounded in the survey action. On the basis thereof, a statement of one Shri. Anil Kashinath Khode, son of the aforesaid Shri. Kashinath Khemsa Khode was recorded on the date of survey. In his statement, Shri. Anil Kashinath Khode in Answer to Question No. 3, stated that his father Shri. Kashinath Khemsa Khode was carrying out the purchase and sale of liquor of b .....

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ssee to file his returns of income for these three years. In response thereto, the assessee filed letter dated 12.10.2014, requesting the AO to treat the returns of income originally filed for these Assessment Years as being filed in response to the notices issued u/s 148 of the Act. Thereafter, the AO took up assessment proceedings and concluded the assessments for Assessment Years 2011-12 to 2013-14 vide separate orders of assessment u/s 143(3) r.w.s. 147 of the Act; all dated 31.03.2016. In t .....

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xcise licence fee. 2.4 Aggrieved by the orders of assessment; all dated 31.03.2016 for Assessment Years 2011-12 to 2013-14, the assessee filed appeals before the CIT(A), Hubli, raising several grounds contending that the aforesaid 2 additions/disallowances were unwarranted. The CIT(A), after hearing the assessee, dismissed the appeals for these three Assessment Years vide the impugned orders dated 31.08.2017; holding that, in respect of the additions made towards rent received for each of the th .....

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of rental income - except for change in the quantum of additions made), I am extracting and considering hereunder the grounds raised for Assessment Year 2012-13 for the purposes of adjudicating both the issues involved: 1. The orders of the authorities below in so far as they are against the appellant, are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The order of re-assessment u/s.147 of the Act, is bad in law and void-ab-initio for want of r .....

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s paying rent for running the liquor shop of the appellant, had subsequently clarified his statement and filed an affidavit to this effect and he was also produced by the appellant before the learned A.O., who declined to examine him and thus, the clarification of Sri Anil Kashinatha Khode cannot be brushed aside as unreliable and the addition made on this basis is misconceived and the same deserves to be deleted. 4. Without prejudice to the above, the learned A.O. ought to have excluded the inc .....

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ound Nos. 1 and 6 (Assessment Year 2011-12) Ground Nos. 1 and 7 (Assessment Years 2012-13 and 2013-14) 4.1 These grounds being general in nature, and not being urged before me, require no adjudication and are accordingly dismissed as infructuous. 5. Ground No. 5 (Assessment Year 2011-12) Ground No. 6 (Assessment Years 2012-13 and 2013-14) - Charging of Interest u/s 234B and 234D of the Act 5.1 In these grounds, the assessee denies itself liable to be charged interest u/s 234B and 234D of the Act .....

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inath Khode recorded in the course of survey on 28.08.2014. It is submitted that in the re-assessment proceedings, Shri. Kashinath Khesma Khode and his son Shri. Anil Khashinath Khode have filed sworn Affidavits dated 09.11.2015 before the AO explaining the correct factual situation. It was pointed out that in the Affidavits (copies placed at pages 55 to 58 of the paper book), it was explained that Shri. Anil Kashinath Khode was an employee of the assessee and that the amounts paid to the assess .....

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e Wine Store and not Shri. Kashinath Khemsa Khode as stated in the earlier statement dated 28.08.2014 of Shri. Anil Kashinath Khode. In this regard, it was further contended that the assessee has filed the returns of income for the aforesaid three Assessment Years declaring income from the business of purchase and sale of liquor in the name and style of M/s. Jayalaxmi Wine Centre and thus making an addition on account of rent on the very same business amounts to double taxation. 6.2 Per contra, .....

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against the Hon ble Madras High Court decisions (supra) was dismissed as reported in 254 CTR 228. 6.4.1 After having heard the rival contentions and carefully perused the material on record, I find that the said statement of Shri. Anil Kashinath Khode recorded during the survey on 28.08.2014 is the basis for re-opening the assessee s case for Assessment Years 2011-12 to 2013-14. It is also seen that the assessee was not confronted with the aforesaid statement of Shri. Anil Kashinath Khode in th .....

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survey are admittedly not in the assessee s handwriting and the payment of rent to the assessee has also been denied by both Shri. Anil Kashinath Khode and his father Shri. Kashinath Khemsa Khode in Affidavits dated 19.11.2015, filed in the course of assessment proceedings. I have also perused the statement of the assessee recorded on 17.03.2016 and the statement of Shri. Kashinath Khemsa Khode recorded on 18.03.2016 recorded in the course of assessment proceedings; wherein they have completely .....

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by the assessee but by third party and there is no signature of the assessee to even remotely suggest that the assessee has been paid rent by Shri. Kashinath Khemsa Khode for carrying out liquor business under the Excise Licence of the assessee. While it is true that admission is an important piece of evidence; unless corroborated, it cannot be said to be conclusive and it is open to the person who has made the admission to show that it is incorrect; which in my considered opinion has been succe .....

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12-13 and 2013- 14 (supra) assails the disallowance made by the AO and upheld by the CIT(A) in respect of Excise Licence Fee paid of ₹ 4,18,600/- each for both Assessment Years for want of challan. According to the learned AR, the said amounts have been paid to the State Government towards Excise Licence Fee without which the assessee could not have carried on his liquor business. It is further submitted that the assessee s accounts have been audited u/s 44AB of the Act and the amounts in .....

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am of the view that the same is allowable expenditure. In the light of the aforesaid evidence and in this view of the matter, the disallowance of the expenditure on Excise Licence Fee made by the AO and sustained by the CIT(A) is factually unsustainable for Assessment Years 2012-13 and 2013-14 and therefore the same are deleted. Ground No. 5 raised by the assessee for Assessment Years 2012-13 and 2013-14 are allowed. 8. Ground No. 2 8.1 Since the assessee s grievances/grounds raised on the meri .....

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