TMI Blog2023 (8) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... ture claimed was incurred by the assessee for running of chits. Be that as it may, however, before us assessee has neither kept the copy of the cash book found/seized during the search in the form of Paper Book nor the assessee filed any materials/evidences to substantiate the expenditure claimed by the assessee other than the oral assertion as noted supra. In the absence of any relevant evidence or material to support the expenditure claimed by the assessee, the impugned action of the Ld.CIT(A)/AO cannot be held to be perverse and therefore, upheld. Unexplained cash found during search - AO on this issue noted that no books of accounts are maintained by the firm - HELD THAT:- We are of the view that the assessee s assertion that he had some loan received in his hands from 01.04.2017 to date of search, cannot be brushed aside, which fact need to be examined/verified. Since this fact has not been looked into by the AO/the Ld.CIT(A), the assessee has pleaded to restore this issue back to the file of the AO. Having taken note of the sworn statement of assessee about amount of loans returned back to it as well as AO s findings recorded we set aside the impugned order of the Ld.CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to why the expenditure of Rs. 6,36,640/- should not be disallowed/brought to tax. The assessee replied that since finance was its primary business and from chit, assessee only earned foreman commission, it offered only the net amount (after expenses) under the head other income . Therefore, according to the assessee, even though, the gross receipt of foreman commission was to the tune of Rs. 6,75,000/- after deducting the expenses to the tune of Rs. 6,36,640/-, the assessee has shown net commission amount of Rs. 38,360/- on account of running chits and for buttressing this contention, referred to the sworn-statement given during the search proceedings that the income from chit was offered to tax, after meeting of overhead expenses including defaulted amount, etc. The AO was not satisfied with the reply of the assessee. According to him, during the search documents evidencing the receipt of foreman commission was found and seized; and based on which, the assessee was questioned about the quantum received in respect of foreman commission which details were given later by the assessee and it shows that the assessee received Rs. 6,75,000/- as foreman commission. But, according to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he earlier miscellaneous income of Rs. 62,730. Therefore, I am of the view that there is no infirmity in the decision of the AO. Accordingly, the appellant's ground is dismissed. 4. Aggrieved, the assessee is before us. 5. We have heard both the parties and perused the records. The sole issue is regarding the disallowance of expenditure claimed by the assessee to the tune of Rs. 6,36,640/- ( Rs. 2,60,000/- on account of defaulters, Rs. 13,910/- towards salary and Travelling Allowances plus Rs. 62,730/- shown by the assessee as miscellaneous income in the original assessment ) on the ground that no evidences for the expenses claimed could neither be found/unearthed during search nor produced by the assessee during re- assessment proceedings u/s. 153A of the Act. It is elementary that when expenditure is claimed, the assessee has to support the same with material/evidence that such an expenditure it incurred; and show that the expenditure has been incurred wholly and exclusively for the purpose of business. Having failed to produce any material/evidences to support the claim of expenditure, the action of the Ld.CIT(A) to confirm the action of the AO cannot be faulted. Eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the AO, the expenditure to the tune of Rs. 11,99,820/- is not proved by any evidences; and the AO also took note of certain facts viz., that assessee in earlier year (AY 2017-18), earned interest on loan to the tune of Rs. 19,46,735/-, whereas, during the current year, interest on loan offered was only to the tune of Rs. 6,95,000/-, because, the loans outstanding at the end of the previous year was to the tune of Rs. 70,52,000/-, whereas, loan outstanding at the end of the current year was to the tune of Rs. 19,46,290/-; and also he took note of the expenditure of the earlier year i.e. AY 2017-18 and of this year and noted that assessee claimed excess expenditure of Rs. 2,40,000/-. Taking all these facts in to consideration, the AO disallowed the expenditure of Rs. 11,99,820/-. 10.1. Aggrieved the assessee preferred an appeal before the Ld.CIT(A), who gave partial relief to the assessee confirming only Rs. 4,02,924/- [out of the AO s disallowance of Rs. 11,99,820/-] and thus gave relief to the tune of Rs. 7,96,896/-. Still not satisfied, the assessee is before us. 10.2. We have heard both the parties and perused the records. We find that the search took place on 27 Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirm the same. Aggrieved, the assessee is before us. 11.3 We have heard both the parties and perused the records. We note that Rs. 88,16,110/- was found from the premise of the assessee during search; and as per the AO, the assessee was able to explain only source of Rs. 46,86,610/- (supra). Therefore, the balance amount of Rs. 41,29,500/- was added as unexplained u/s. 69A of the Act, which has been confirmed by the Ld.CIT(A). Before us, the Ld.AR of the assessee, drew our attention to Page No. 42 of the Paper Book, which is the copy of the sworn statement of the assessee (managing partner of assessee s firm recorded on 27.10.2017), and took our attention to Q.No.4 regarding source of cash found at the time of search, the Managing Partner of assessee has answered as seen at Page No.44 45 of the Paper Book which reads as under:- (2) Loan recovered from 01.04.2017 to 10.09.2018 (as we are now reconciling the cash book, we will produce the cash book within a week) Rs. 74,49,000 According to the Ld.AR, this crucial fact/source has been missed by the AO and the Ld.CIT(A), even though, the statement was recorded immediately (w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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