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2015 (7) TMI 155 - AT - Income TaxAddition u/s 69 A - CIT(A) deleted the addition - Held that - CIT(A) while deleting the addition has given a finding that during the assessment proceedings, Assessee had filed replies for each of the items of jewellery and cash seized and had also furnished the addresses of the senders of parcel and cash, the original affidavits of the senders were also filed. A.O had not verified any of the evidence either at the assessment stage or the remand stage. Ld. CIT(A) has further given a finding that Assessee was courier and had explained through evidences that the parcel belonged to its customers and the parcels were received during the course of business. Ld. CIT(A) has further given a finding that there was no evidence to show that the Assessee was the owner of the goods. Ld. CIT(A) has further noted that Assessee was mere custodian of the articles that were handed over to him and which was being transported from Jaipur to Ahmedabad and the parcels were held in the capacity of the courier and there was no question of ownership and Section 69A was not applicable. Before us, Revenue has not produced any material on record to controvert the findings of ld. CIT(A) - Decided against revenue. Addition on account of luxury bus expenses - CIT(A) deleted the addition - Held that - CIT(A) after considering the submissions and the documents has given a finding that except of ₹ 500 per day which was given to driver for lodging, there was no food expenditure relating to driver salary, food expenses etc which was included under the total vehicle expenditure. He after considering the totality of the facts, deleted 50% of the addition. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A). We therefore find no reason to interfere with the order of ld. CIT(A)- Decided against revenue.
Issues Involved:
1. Addition under Section 69A of the Income Tax Act. 2. Disallowance of luxury bus expenses. 3. Confirmation of addition for non-business expenses. 4. Legality of the assessment order under Sections 153B and 132 of the Income Tax Act. 5. Levy of interest under Sections 234A, 234B, and 234C of the Income Tax Act. Detailed Analysis: 1. Addition under Section 69A of the Income Tax Act: The Assessee, a partnership firm engaged in Angadia business, had its employees detained by police carrying parcels of jewelry and cash. The Assessee claimed these parcels belonged to its clients and not to the firm. The A.O. added Rs. 52,82,068/- under Section 69A, considering the Assessee as the owner due to the inability to verify the identity of the parcel owners. The CIT(A) admitted additional evidence, including affidavits and addresses of senders and receivers, and concluded that the Assessee was merely a courier. The CIT(A) held that Section 69A was not applicable as the Assessee was not the owner but a custodian of the parcels. The Tribunal upheld the CIT(A)'s decision, noting the lack of evidence from the Revenue to counter CIT(A)'s findings. 2. Disallowance of Luxury Bus Expenses: The A.O. disallowed Rs. 6,68,750/- out of the total expenses of Rs. 26,75,000/- for luxury bus activities, citing unverifiable self-made vouchers. The CIT(A) reduced the disallowance by 50%, considering only Rs. 500 per day given to the driver for lodging as verifiable. The Tribunal upheld the CIT(A)'s decision, finding no material from the Revenue to challenge the CIT(A)'s findings. 3. Confirmation of Addition for Non-Business Expenses: The A.O. added Rs. 1,10,000/- for various expenses like Khem expenses, vehicle expenses, and office expenses, which were not supported by proper vouchers. The CIT(A) dismissed the ground as it was not pressed by the Assessee. The Tribunal found no reason to interfere with this decision due to the lack of evidence from the Assessee. 4. Legality of the Assessment Order under Sections 153B and 132: The Assessee argued that the A.O. should have passed the order under Section 153A instead of 153B, and that the search action under Section 132 was illegal as the items were already under police custody. The CIT(A) did not adjudicate on this ground. The Tribunal dismissed the C.O. filed by the Assessee, supporting the CIT(A)'s order. 5. Levy of Interest under Sections 234A, 234B, and 234C: The Assessee contested the levy of interest under these sections. The Tribunal dismissed this ground as part of the C.O., supporting the CIT(A)'s decision. Conclusion: The Tribunal dismissed both the appeals of the Revenue and the Assessee, as well as the C.O. filed by the Assessee, thereby upholding the CIT(A)'s order in all respects. The key findings were the non-applicability of Section 69A due to the Assessee's role as a courier, partial relief on luxury bus expenses, and the confirmation of non-business expenses due to lack of evidence. The legality of the assessment order and the levy of interest were also upheld. Order Pronounced: The order was pronounced in the Open Court on 25-06-2015.
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