9911796707
TMI Blog2021 (10) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... se appeals were heard together and are being disposed of by this common order, for the sake of convenience. 2. The revenue is challenging the decision of Ld. CIT(A) in deleting the undisclosed income of Rs. 1.74 crores and Rs. 2.51 crores assessed by the A.O. respectively in assessment years 2011- 12 & 2012-13. In the cross objections, the assessee is challenging the decision of Ld. CIT(A) in upholding the validity of search conducted in the hands of the assessee u/s 132(1) of the Incometax Act,1961 ['the Act' for short]. 3. The facts relating to the case are stated in brief. The assessee company is engaged in the business of manufacturing and processing of animal feed supplements in feeds and farm division, manufacturing & proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it to explain how the amounts advanced were accounted in the books of the company and also directed to furnish the details of withdrawals made from banks. The assessee submitted that it has withdrawn money from United Bank of India and the same was deposited with Bank of India. It was submitted that it was necessitated, since it has fully used the loan granted by United bank of India. Hence money was withdrawn from United bank of India and the same was deposited into Bank of India, so that it can use the funds as per its requirements. However, while withdrawing funds from United bank of India, the imprest account of Prakash Ladhani was debited. When depositing money with Bank of India, the imprest account was credited. It was submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings. Only at the fag end of the assessment proceeding, the A.O. asked for the details of payments made to the Imprest account of Shri Prakash Ladhani and assessee has also explained the same. The Ld CIT(A) also confronted the cash book with the AO and hence there is no violation of Rule 46A. He further submitted that the imprest account is finding place in the cash book and ledger, which means that these transactions are duly recorded in the books of account. Hence, the question of treating it as undisclosed income in the hands of the assessee firm does not arise at all. Since the imprest account has been created only to have the control over these transactions and further since Shri Prakash Ladhani was not given any amount for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were given at the time of search. 6.5 In the assessment proceedings, the AO has asked the appellant once again about the seized ledgers. The A.O. asked the appellant to establish 2 things - first how the advances given to Sri.Prakash Ladhani have been accounted and secondly to explain the source of the advances given. The A.O. wanted the appellant to explain whether any expenses have been booked in relation to the amount advanced to Sri Prakash Ladhani. The cash book was also required to be produced and point out the relevant entries in the name of Sri Prakash Ladhani. In reply, the appellant stated that the cash advanced to Sri Prakash Ladhani was drawn from United Bank of India and deposited in Bank of India for expenses. It was explai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission of the appellant that several assessment proceedings of the entire group were being taken up together and there was a bonafide oversight in producing the cash book appears to be a reasonable explanation. Hence, I hold that the additional evidence tendered by the appellant requires to be admitted to serve the ends of justice. No prejudice will be caused by admitting the additional evidence as the A.O. has also been given the opportunity to examine the same and furnish his comments. 6.7 I find from the examination of the cash book that the cash payments made to Sri Prakash Ladhani are properly recorded therein as per the seized ledger account. The appellant has also filed the ledger account of United Bank of India to show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est account is created as conduit between the bank transactions. We notice that the Ld. CIT(A) has examined the books of account which has also been confronted before the A.O. Further, the Ld. CIT(A) has also recorded a finding that all the transactions are duly recorded in the books of account. When all the transactions have been routed through the books of accounts, the question of undisclosed income will not arise. Hence we are of the view that the AO has made the impugned addition on surmises and conjectures only and accordingly, in the facts and circumstances of the case, we do not find any infirmity in the decision rendered by Ld. CIT(A) in deleting this addition in both the years. 10. In the C.O., the assessee is challenging the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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