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TMI Blog2010 (12) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... tt Chamber-II, Bhikaji Cama Place, R.K. Puram, New Delhi 3. Marry Villa, Andhri(E), Opp. Sahara Air Complex, Sutarwa, Mumabi-99 4. J-7, NDSE Part-I, New Delhi 5. Farm House of Shri Virender Khosla at Sonia Farm Opp. BSF Center, 54/22, Chawwla, Bijwasan, Delhi 6. G-42, Mansarover Gardens, New Delhi 7. 68, Ring Road, Lajpat Nagar, New Delhi" 3. Notice under Section 158BC of the Income Tax Act, 1961 was issued on 07.11.2002. The assessee had filed the return of income for the block assessment. In Form no. 2B the assessee had declared un-disclosed income of Rs.12 lacs. Accordingly, the notice under Section 143(2) and 142(1) along with questionnaire were issued on 10.10.2003. The same was duly served upon the assessee. The assessee had filed the written submission and other details during the course of hearing. During the course of search cash of Rs.2,07,300/- was found at the business premises of the assessee at Plot No.9-A, NH-8, Mahipalpur Extension, New Delhi. The business of the assessee company was an IATA approved rate and forwarding agent, however they are mainly engaged in the business of booking of export cargo through various Ai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 114000 Paid to Directors 24 28-May-01 15000 15000 Mr.Gupta 24 28-May-01 65000 65000 Received from inderveer 24 29-May-01 177000 177000 Received from Mr.Wadhwa 24 1-June-01 375000 375000 Anil 24 1-June-01 13000 13000 V.K. 24 1-June-01 35000 35000 Wadhwa 25 8-June-01 5000 5000 Received 26 12-June-01 6160 6160 Received from gardner 27 20-June-01 65000 Paid to Murli Kakkar 32 27-June-01 31250 31250 Wadhwa 33 30-Aug-01 10000 10000 M.Singh 39 11-Sep-01 130000 Mr.Gupta 41 24-Sep-01 50000 Mr.K. 41 24-Sep-01 2000 Paid to Doctor 42 5-Oct-01 200000 Paid to Mr.Magu 51 5-Dec-01 165000 165000 Received from Katyal 51 5-Dec-01 100000 100000 Satprakash 61 7-Nov-01 650000 650000 To be received from V.M. 61 57700 57700 Received Total undisclosed income as per annexure A-59 35,75,110/- 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee and all the transactions mentioned therein are business transactions of the assessee unless otherwise route. Though the assessee had admitted that the transactions amounting to Rs. 21,75,000/- as per the details mentioned in above table were business transactions of the company. Therefore, in regard to the balance transactions of Rs.14,00,110/-, the assessee had failed to controvert the presumption of law that these transactions do not pertain to the assessee's business. In view of the above discussion and after considering the facts that the transactions of Rs.35,75,110/- has not been recorded in the books of accounts of the assessee company, although, the assessee admitted that these were its business transactions. Therefore, all such transactions were undisclosed income of the assessee company and the same was included in total undisclosed income of the assessee as under:- "Undisclosed income Rs. 21,75,000/- (included on substantive basis) Undisclosed income Rs. 14,00,000/- (included on protective basis) Total: Rs. 35,75,110/-" 11. Annexure A-5 of the seizure documents reveals that cash payment of Rs.20,000/- and Rs.10,000/- were made to Mr.Mal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submitted before the Assessing Officer that the table diary was maintained by Mr. V.K. Khosla, Director of the company, in his own hand writing which contains details of business transactions relating to the assessee company but the Assessing Officer has not accepted the contention of the assessee. The Assessing Officer has observed in the assessment order that books of accounts of the assessee company were verified and found that not a single transaction recorded in AnnexureA-59 had been accounted for in the books of accounts for the period mentioned in the annexure A-59. The Assessing Officer has also mentioned the details of the transaction claimed to be pertaining to the business of the assessee company which is reproduced below:- Page No. Date Receipt Payment Income Remarks 5 15-Jan-01 600000 600000 Received 5 15-Jan-01 450000 Paid Chachaji 5 15-Jan-01 150000 Paid to Katyal 7 3-Feb-01 750000 750000 Received 7 3-Feb-01 500000 Paid to Katyal 8 8-Feb-01 450000 450000 Received 9 14-Feb-01 30000 Cash paid to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining Rs.13,30,110/- and undisclosed income for the block period. Thus, even in the ground of appeal taken before CIT(A), Mr. Khosla had not contested the fact that the entries of Rs.14,00,100/- pertains to his personal transactions. The Assessing Officer has not brought out any material on record to established that the transactions entered in this table diary amounting to Rs.14,00,100/- does not belong to personal transactions of Mr. V.K.Khsola. Moreover, in the block assessment order undisclosed income cannot be determined on protective basis. 20. Therefore, keeping in view the facts and circumstances of the case the CIT(A) was of the view that the Assessing Officer was not justified in determining Rs.14,00,100/- as undisclosed income for the block period of the assessee company on protective basis. Hence, addition of Rs.14,00,100/- made in the undisclosed income on protective basis was deleted by the CIT(A). 21. With regard to the undisclosed income of Rs.21,75,000/-, the AR reiterated the arguments which were taken before the Assessing Officer that the noting jotted in this diary primarily pertains to collection of actual cheques, whether received by the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Pvt. Ltd. of Rs.4 lacs and from M/s Sheriff Travel and Cargo of Rs.2 lacs. The CIT(A) has also noticed from the bank book of the assessee that many other cheques from various parties on that date had been recorded in the bank book , such as cheque of Rs.5,08,045/- from M/s HTL Logestick India Pvt. Ltd., Rs.1 lac from Continental Cargo Movers etc. It is worth mentioning that in the table diary it had been noted that out of Rs.6 lacs were paid to chachaji and Rs.1.5 lacs to Mr. Katyal. However, in the bank book, no such entry regarding payments of Rs.4.5 lacs and Rs.1.5 lacs were found recorded. The assessee unsuccessfully tried to explain that these entries were recorded as M/s Mals Cargo Pvt. Ltd. that they would pay a cheque of Rs.4.5 lacs and M/s Sheriff Travel and Cargo would pay a cheque of Rs.1.5 lacs but no such actual payments were made to chachaji and to Mr. Katyal. As noted by the CIT(A) that on an another date i.e. 03.02.2001 in table diary on page-7, it is recorded that a payment of Rs.5 lacs was made to Mr. Katyal and the assessee tried to explain that the entry represents payment of Rs.5 lacs by cheques to M/s. Kuber Co. Sales(P) Ltd. 24. In regard to entry N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in order to collect payment from their customers, pressure was built on customers through telephonic talk and by sending the persons, and if on telephone the customers assure for making the payment, the same was noted in the name of customer, the same cannot be made the reasons for alleging that assessee was not in receipt of the cheque. Whenever, any notings regarding receipt of cheque is found, the department has all the powers to verify the cheques either from the bank account of the assessee or from the bank account of issuing parties, and if any discrepancy is found or the other party refuses for making any such payment or assessee could not explain the source of such cheque, definitely addition can be made, but merely on the plea that cheques were found entered in the diary, which was actually not received or recorded in regular book on subsequent date, cannot be made the basis for making the addition, unless some contrary material is found by the department. 28. The ITAT had also observed that each cheque number, date of clearing and the name of the party from whom cheque was received was noted in the diary were duly found to be entered in regular books. Merely because t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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