TMI Blog2011 (8) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 11/H/05 is with regard to treatment of investment in land as undisclosed income. 3. Brief facts of the issue are that during the search, evidence was gathered which suggested that there has been unexplained investment of ₹ 2.5 lakhs made by the Assessee during July 2000 in property situated at D. No. 21-1-854 Rikabgunj, Hyderabad. In the assessment order, the Assessing Officer has referred to the seized material cited as evidence. It is also mentioned that the Assessee during the search proceedings as well as the assessment proceedings accepted that the above investment is not reflected in the books of accounts. A request was made during the assessment proceedings for telescoping of this investment against undisclosed sales admitted by other concerns. The Assessing Officer rejected the submission of the Assessee after pointing out that the investment in the above property was made during the previous year relevant to assessment year 2001-02 and the income from suppression of sales belongs to other members of the group and that too undisclosed sales is assessed for the period from 1.4.01 to 29.1.02. The Assessing Officer has also pointed out that the Assessee as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount Rs. Balance as per books of accounts Supreme Music 98,303 Music Network 49,735 Sumadhur 1,07,828 2,55,866 Cash belonging to our employee at Supreme Music Vizag 50,000 3,05,866 Balance cash belonging to the other family members and children 60,323 3,66,189 Thus the each found at the residence stands duly recognised 8.1. The assessing officer has rejected his explanation after following observations: a) The Assessee had taken a stand in another connected case that ₹ 70,000/- belongs to M/s Supreme Music but now is being claimed as the source for the cash found. b) The cash book of the above concerns were not up to date. The family concerns of the Assessee are involved in purchases and sales outside the books of accounts which is evident from the deficit and surplus stocks found during the search. The Assessing Officer also noted that the Assessee had not explained t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer while rejecting the explanation is as under: a) On the day of search, a sworn deposition was recorded from Shri Harish Kumar Harwani one of the directors of the Assessee company wherein he was asked about the details of the sales realisations from out station parties. In response he stated that he did not know Mr. P. Karunakar Rao and also did not know in what capacity Mr. P. Madhava Rao is working in the Assessee company. Further, he has also stated that he did not know anything about the details of above transactions. b) The Assessee company is involved in making purchase outside the books of accounts as is evident from the surplus stock found on the day of search. c) The cash book is not updated and the theory of the Assessee that the sources for the above cash are realisations of sales from outstation parties by the sales agent Mr. P. Madhava Rao is a mere after thought on the part of the Assessee to explain away the cash found on the day of search. d) The Assessee has not adduced any evidence flowing from the material seized to substantiate its claim. e) On perusal of the details filed by the Assessee with regard to realisations, it is found th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us, we find there is no such ground raised before the CIT(A) or before us. Accordingly this ground is dismissed as un-admitted. 19. The next ground in IT No. 18/H/2005 is with regard treatment of unaccounted payment to M/s Laxmi Narasimha Pictures. 20. Brief facts of the issue are that the evidence gathered during the search with regard to unexplained expenditure has indicated unaccounted payment of ₹ 4,50,000/- by the Assessee towards purchase of assignment charges of Telugu film 'Audi' to one M/s Lakshmi Narasimha Pictures. The Assessing Officer has referred to the seized document which indicated such payment. Shri Raj Kumar Harwani, Director of the company accepted the un-account payment. However, the Assessee company while filing the return sought for telescoping of the same to the undisclosed sales admitted in other concerns of the group into the above unaccounted payment. 21. We have heard both the parties and perused the materials available on record. Herein the Assessee's counsel sought for telescoping of this payment out of undisclosed income. We accede to the request of the Assessee. Accordingly, we direct the assessing officer to set off th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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