TMI Blog2022 (9) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... source of cash deposits in the bank account of Mr. Pawan Goyal, from whom the assessee had received the share application money, to be out of the income surrendered on account of unaccounted sale during the course of search. Before us, the Revenue has not placed any material on record to demonstrate that the income surrendered in the case of share application money has not been accepted by the Revenue. In absence of any fallacy pointed to in the findings of the CIT(A), we find no reason to interfere with the order of CIT(A) and thus, ground of appeal of the Revenue is dismissed. Addition on account of business promotion expenses and on account of Diwali expenses - HELD THAT:- We find that CIT(A) after considering the detailed submissions made by the assessee before him has given a finding that there is no doubt about the genuineness of the expenditure and there is no finding in the assessment order that the business promotion expenses and Diwali expenses were incurred for the personal purpose / extraneous nature of expenses in the hands of Directors. CIT(A) after considering that since the assessee could not give the full details, restricted the disallowance to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of revised return of income and accordingly the claim made during the assessment proceedings was not in line with the decision of Hon ble Supreme Court in the case of Toetze India Limited vs. CIT reported in 284 ITR 323 (SC)? 3. Whether on the facts and circumstances of the case, the Id. CIT(A) was correct in deleting the addition of Rs.2,74,42,000/- made u/s 68 of the Income Tax Act? 4. Whether on the facts and circumstances of the case, the Ld. CIT(A) was correct in restricting the addition of Rs.42,88,787/- made on account of disallowance of business promotion expenses to Rs.4,28,787/- by ignoring the fact that the assessee could not substantiate that the said expenditure was made wholly and exclusively for the purposes of its business? 5. Whether on the facts and circumstances of the case, the Ld. CIT(A) was correct in deleting the addition to the extent of Rs.26,09,082/- out of Diwali expenses ignoring the fact that the assessee could not substantiate that the said expenditure was wholly and exclusively for its business purposes? 4. Grounds of appeal Nos.1 and 2 of the Revenue are inter-connected and are with respect to addition of Rs.2,43,90,691/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee has rightly deducted the alleged income from its computation of income and the assessee was justified in not offering the income to tax in view of real income theory for taxation according to which no tax can be charged on hypothetical and unilateral income. He has further given a finding that assessee had not written off the amount in the books of account during the same financial year and assessee had also furnished the documents in respect of realisation of the aforesaid amount in subsequent years. The Ld. CIT(A) accordingly, set aside the addition made by the A.O. 6. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before the Tribunal. 7. Before us, the Ld. D.R. took us through the findings of the A.O. and supported the order of A.O. 8. The Learned Authorised Representative, on the other hand, reiterated the submissions made before the authorities below and further submitted that the aforesaid amount which was not realised in A.Y. 2012-13 was realised by the assessee in A.Y. 2016-17 and was offered to tax in A.Y. 2016-17. In support of his contention, he has placed on record copy of the computation and the copy of acknowledgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 132 of the I.T. Act, 1961 was conducted on 22.10.2009 on residential and business premises of Mr. Pawan Goyal. Thereafter, consequent to the notice issued under section 153A of the I.T. Act, 1961, Mr. Pawan Goyal had filed his return of income disclosing aggregated income of Rs.4,20,00,000/- as unaccounted sales spread over in different assessment years i.e., from A.Y. 2007-08 to 2010- 11. It was submitted that cash deposited in the Bank represented the unaccounted sales, disclosed in the return of income. The submissions of the assessee about the source and deposits was not found acceptable to A.O. as he was of the view that search was conducted on 22.10.2009 and thereafter after two years the amount was deposited in the Bank account and according to A.O. this period was sufficient to show that the assessee was not having any debtor from whom unrealized sales was recoverable. The A.O, therefore, concluded that assessee has failed to prove the immediate source of earnings and nature of cash deposits in the bank by Mr. Pawan Goyal. He, therefore, held that share application money deposited by Mr. Pawan Goyal to be unexplained under section 68 of the I.T. Act, 1961 and accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record to demonstrate that the income surrendered in the case of share application money has not been accepted by the Revenue. Considering the totality of the facts and circumstances of the case and in absence of any fallacy pointed to in the findings of the Ld. CIT(A), we find no reason to interfere with the order of Ld. CIT(A) and thus, ground of appeal No.3 of the Revenue is dismissed. 17. Grounds of appeal Nos.4 and 5 of the Revenue is with respect to restricting the addition of Rs.42,88,787/- on account of business promotion expenses and deleting addition to the extent of Rs.26,09,082/- on account of Diwali expenses . 18. During the course of assessment proceedings A.O. noted that assessee had debited a sum of Rs.47,88,165/- and a sum of Rs.56,68,240/- on account of business promotion expenses and Diwali expenses respectively. The assessee was asked to explain and justify the expenses, to which, assessee furnished details. The A.O. on examining the details noted that the expenses on account of purchase of gold coins, silver items, luxury holiday hotels, credit cards bills in the name of Directors of the company, which according to the A.O. was not incurred wholly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y evidence on record. He, thus, supported the order of the Ld. CIT(A). 23. We have heard the Learned Representative of both the parties and perused the material available on record. We find that the Ld. CIT(A) after considering the detailed submissions made by the assessee before him has given a finding that there is no doubt about the genuineness of the expenditure and there is no finding in the assessment order that the business promotion expenses and Diwali expenses were incurred for the personal purpose / extraneous nature of expenses in the hands of Directors. The Ld. CIT(A), however, after considering that since the assessee could not give the full details, restricted the disallowance to the extent of 10% on business promotion expenses after considering the business and turnover of the assessee and similarly granted partial relief of Rs.26,09,082/- on account of Diwali expenses against a sum of Rs.56,62,840/- claimed by the assessee on account of Diwali expenses . Before us, the Revenue has not pointed out any fallacy in the finding of the Ld. CIT(A). We, therefore, find no reason to interfere with the order of the Ld. CIT(A) and thus, the grounds of appeal Nos.4 and 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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