2012 (1) TMI 241 - AT - Income Tax

Issues Involved:

1. Deletion of addition made on account of undisputed disallowance u/s 143(3) not disclosed in return filed u/s 153A.
2. Deletion of addition made on account of dismantling expenses without seized materials.
3. Allowance of expenses not recorded in books or seized material on presumptive basis u/s 153A.
4. Taxation of "on money" receipts and advances in the year of transfer instead of the year of receipt.
5. Reliance on Tribunal decision in the case of Golani Bros Vs. ACIT despite differences in facts.

Summary:

A.Y. 2001-02:

1. The Ld. CIT(A) deleted the addition of Rs. 1,09,325/- made on account of undisputed disallowance u/s 143(3) not disclosed in the return filed u/s 153A, noting that the assessee had already accepted the addition and paid taxes, thus separate addition in the order u/s 153A read with section 143(3) is not justified.

A.Y. 2002-03:

1. The Ld. CIT(A) deleted the addition of Rs. 2,49,000/- made on account of dismantling expenses, ignoring the fact that no seized materials indicated any such expenses.
2. The Ld. CIT(A) held that u/s 153A, expenses not recorded in the books of account or not noted in seized material can be allowed on presumptive basis.
3. The Ld. CIT(A) directed the AO to tax the "on money" receipts and advances in the year of transfer of shops instead of the year of receipt.
4. The Ld. CIT(A) relied on the decision of the Tribunal in the case of Golani Bros Vs. ACIT, despite the revenue's contention that the facts were not identical and the decision was under litigation before the High Court, Bombay.

A.Y. 2003-04:

1. The Ld. CIT(A) deleted the addition of Rs. 9,93,000/- on account of advances and Rs. 3,00,000/- on account of on-money during the transfer of shops, directing the AO to tax the advances in the year of transfer, not in the year of receipt.
2. The Ld. CIT(A) relied on the decision of the Tribunal in the case of Golani Bros. Vs. ACIT, despite the revenue's contention that the facts were not identical and the decision was under litigation before the High Court, Bombay.
3. The Ld. CIT(A) deleted the addition of Rs. 99,000/- on account of disallowance of commission and Rs. 1,24,800/- on account of disallowance of watchman's salary, holding that expenses not recorded in the books or not noted in seized material can be allowed on presumptive basis in assessment u/s 153A.

A.Y. 2004-05:

1. The Ld. CIT(A) deleted the addition of Rs. 12,03,000/- on account of advances and Rs. 4,40,000/- on account of on-money during the transfer of shops, directing the AO to tax the advances in the year of transfer, not in the year of receipt.
2. The Ld. CIT(A) relied on the decision of the Tribunal in the case of Golani Bros Vs. ACIT, despite the revenue's contention that the facts were not identical and the decision was under litigation before the High Court, Bombay.
3. The Ld. CIT(A) deleted the addition of Rs. 2,20,000/- on account of disallowance of commission, Rs. 1,53,600/- on account of disallowance of watchman's salary, and Rs. 19,954/- on account of disallowance of dismantling expenses, holding that expenses not recorded in the books or noted in seized material can be allowed on presumptive basis in assessment u/s 153A.

A.Y. 2005-06:

1. The Ld. CIT(A) deleted the addition of Rs. 40,10,000/- on account of advances in the transfer of shops, directing the AO to tax the advances in the year of transfer, not in the year of receipt.
2. The Ld. CIT(A) relied on the decision of the Tribunal in the case of Golani Bros Vs. ACIT, despite the revenue's contention that the facts were not identical and the decision was under litigation before the High Court, Bombay.
3. The Ld. CIT(A) deleted the addition of Rs. 45,600/- on account of disallowance of watchman's salary, Rs. 40,150/- on account of supervision charges, and Rs. 8,804/- on account of disallowance of dismantling expenses, holding that expenses not recorded in the books or not noted in seized material can be allowed on presumptive basis.
4. The Ld. CIT(A) restricted the addition u/s 69C from Rs. 2,14,663/- to Rs. 1,72,663/-, allowing relief of Rs. 42,000/-, ignoring the fact that the source of such expenditure was unexplained and would be deemed to be the income of the assessee for the relevant financial year as held by the Hon'ble Calcutta High Court in the case of CIT V Bhagwati Developers (P) Ltd. (2003) 261 ITR 658.

Additional Grounds for A.Y. 2001-02:

1. The Ld. CIT(A) held that u/s 153A, expenses not recorded in the books of account or not noted in seized material can be allowed on presumptive basis.
2. The Ld. CIT(A) directed the AO to tax the on money receipts of Rs. 3,20,000/- and the advances of Rs. 2,10,000/- in the year of transfer of shops instead of in the year of receipt.
3. The Ld. CIT(A) relied on the decision of the Tribunal in the case of Golani Bros. Vs. ACIT, despite the revenue's contention that the facts were not identical and the decision was under litigation before the Bombay High Court.

Conclusion:

The Tribunal upheld the decisions of the Ld. CIT(A) on all issues, dismissing the revenue's appeals for all assessment years.

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