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TMI Blog2012 (7) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... w: "1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs.19,14,623/- on account of unaccounted purchases made and the peak investment therein, based on the disclosure made as per impounded material being Annexure A/11 and A/12 during survey u/s. 133A of the Act. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs.14,82,877/- u/s. 40A(3) on account of casu payments for purchases as recorded in Annexure A/11 and A/12. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs.1,23,450/- on account of unaccounted ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ak investment for Rs.19,14,623/- and observed as under: "4.3.2 Regarding the legal contention of the assessee with respect to the addition being made merely on the basis of statement recorded in the course of survey proceedings without any cogent and corroborative evidence and on going through the records and materials, I find that though an admission was made in the course of survey, the same was not accepted while filing the return wherein the assessee has mentioned that the statement recorded during the survey was not binding on him and thus, in these circumstances, it was imperative on the Assessing Officer to gather evidence or material to strengthen the addition. I find that the explanation of the assessee th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be sustained and therefore, directed to be deleted." 5.1 Further, the learned CIT(A) deleted the addition of Rs.14,82,877/- made u/s 40A (3) of the Act for cash payments for purchases made outside the books of account by following the decisions of the Tribunal in the case of (i) Hynoup Food & Oil Industries Pvt. Ltd., 48 ITD 202 (Ahd) and (ii) Sharma Associates Vs ACIT, 55 ITD 171 (Pune). 5.2 The learned CIT(A) also deleted the addition of Rs.1,23,450/- made on account of unaccounted profit generated from the sale outside the books by giving telescopic effect on addition made for Rs.2,10,463/- due to difference in physical cash and cash balance as per the books of accounts. 6. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by giving telescoping benefit. 8. We have heard the rival submissions and perused the material on record. 8.1 (I) Deletion of Rs.19,14,623/-: The assessee has no doubt admitted the purchases and sales of goods outside the books of accounts, but at the same time retracted for the peak investment of Rs.19,14,623/- agreed upon at the time of survey. It is pertinent to note that the revenue has not looked into the nature of business and transactions and come out with any concrete evidence to establish that the assessee had made investment for such purchases made outside the books of accounts. The claim of the assessee cannot be simply brushed aside. The assessee had claimed that in his wholesale business of edible oi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this behalf by the Central Government by notification in the Official Gazette, in a sum exceeding [ (twenty) thousand] rupees otherwise than by [an account payee cheque drawn on a bank or account payee bank draft] [twenty per cent of such expenditure shall not be allowed as a deduction.]: Provided that where an allowance has been made in the assessment for any year not being an assessment year commencing prior to 1st day of April, 1969, in respect of any liability incurred by the assessee for any expenditure and subsequently during any previous year the assessee makes any payment in respect thereof in a sum exceeding [ (twenty) thousand] rupees otherwise than by [ an account payee cheque drawn on a bank or account payee bank draft] the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned from purchases and sales of goods outside the books of accounts. The learned CIT(A) deleted the same by telescoping the addition made on account of difference in physical cash balance and book balance as per the books of accounts for Rs.2,10,463/- which was confirmed. Considering these facts, we do not find the decision of the Ld.CIT(A) to be unjust. There is no dispute with respect to earning of profit from purchases and sales made outside the books of accounts. It is obvious that such profit will remain in the hands of the assessee outside the books of accounts and requires to be taxed. However, in such situation the surplus cash found during the course of survey which was not recorded in the books of accounts can be obviously poin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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