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TMI Blog2012 (7) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... aying the depositors year after year - The AO has not discussed in his order that in what type of business and how there will be a business yield @ 6.5 times - against revenue. Addition i.e. making imaginary disallowances out of expenses of non existent business - Held that:- whatsoever has been given by the AO while disallowing admissible expenses on adhoc basis. The income has been estimated on imaginary basis which we have already deleted - in favour of assessee. Addition on account of rent received - Held that:- Addition of Rs.1,54,000/- by mentioning Rent as other income is not acceptable as no discussion has been made in the body of the order that how this rent income is other income. In fact, the assessee in its Profit & Loss account of the Hotel business had shown rental income of Rs.1,68,650/- and it seems that AO had treated the rental income of hotel as income from other sources. However, no finding has been given by the AO that how the rental income of hotel can be treated as income from other sources - in favour of assessee. - ITA Nos.164 & 165/Agr/2009 - - - Dated:- 22-6-2012 - SHRI BHAVNESH SAINI, AND SHRI A.L. GEHLOT, JJ. Appellant by : Shri Anurag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nerator expenses, general expenses and repair maintenance expenses. The A.O. disallowed 20% of generator expenses of which calculation of the amount comes to Rs.31,741/- to cover up the deficiencies and leakages. Similarly, the A.O. disallowed Rs.15,000/- each in respect of general expenses and repairs maintenance expenses. The A.O. noted that similar disallowance were made in earlier years also. 7. The brief facts of ground nos.3 4 noted from the order of A.O. at page nos. 5 to 7 are as under :- 10. It is submitted that a balance sheet as on 31.03.1998 filed by the assessee shows liabilities at Rs.13,05,80,546/- whereas assets are shown at Rs.5,55,27,647/-. Profit Loss account shows loss of Rs.6,39,81,408/-. However for A.Y. 1997-98, the figure of loss disallowed on inflation of expenses, embezzlement money siphoned off stand at Rs.2.00 crore. Thus straightway the profit loss account would stand reduced to Rs.4,39,81,408/-. Further it is submitted that major expenditure were in the A.Y. 1998-99 as under : (i) Commission Rs. 68,00,000 (ii) Interest Rs.1,11,12,000 (iii) Management expenses Rs. 73,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13,60,000 99,40,000 Thus, allowable expenses stand at Rs.99.40 lac while income would be as under : (a) As per recognized accounting practice on actuaries 6.5% of deposits mobilized by assessee forfeited (6.5% x 13,05,000) 84,00,000 (b) Interest income as shown in earlier years 62,00,000 146,00,000 Less Allowable expenses as worked out above 99,40,000 Income for the year 46,60,000 8. The CIT(A) confirmed the order of the A.O. as under :- (CIT(A) paragraph nos.7 7.2) 7. The remaining grounds No.2 to 5 are against the following disallowances/additions made by the assessing officer : Generator expenses Rs.31,741/- General expenses Rs.15,000/- Repair maintenance Rs.15,000/- Estimated business income Rs.84,00,000/- Interest income Rs.62,00,000/- Income from rent Rs.1,17,600/- 7.2 The submissions of the learned AR have been considered along with the facts brought out by the AO in the assessment order. The AO has observed that the assessee failed to furnish complete details of the sundry creditors and sundry debtors and hence the results declared are not verifiable. The reasons stated by the assessee for not furnishing co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowances made by the AO in the assessment year under consideration are, herby confirmed. The grounds taken by the appellant on this score are accordingly dismissed. 9. At the outset, the ld. Authorised Representative in respect of ground no.2 submitted that in earlier years, A.Y. 1999-2000, 2000-01, 2001-02 2003-04 I.T.A.T vide order dated 20.07.2010 in ITA Nos.489 to 491/Agr/2005 444/Agr/2006 has confirmed the disallowance made by the A.O. in respect of generator expenses, general expenses and repair maintenance. However, the ld. Authorised Representative submitted that generator expenses were claimed in respect of existing Hotel business and the A.O. himself admitted in the Assessment Order at page no.4 vide para no.6 that the details of expenses were filed but no log book was produced. The ld. Authorised Representative submitted that the adhoc disallowance cannot be made. 10. After hearing the ld. Departmental Representative, we noticed that in earlier years the disallowance on account of general expenses and other expenses were confirmed by the I.T.A.T. as no details were furnished. The disallowance in that year was Rs.10,000/- out of staff welfare and general exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of deposits. Dispute is going on, FIR has been lodged by the depositor, there is no question of forfeiture of any deposit and from the material available on record, it is seen that the company is repaying the depositors year after year. Therefore, we are not able to understand how the AO has made this addition of Rs.84,00,000/-. The AO has not discussed in his order that in what type of business and how there will be a business yield @ 6.5 times. There is no indication in the assessment order as to form where the figure of forfeiture deposits amounting to Rs.13.05 lacs has been worked out. There is no information even in the accounts for the period ending on 31.3.1998. It is also beyond understanding as to how income can be 6.5 times of the forfeited amount and further there is no forfeiture of any deposits reflected in the audited accounts for the previous year ending 31.3.1998. On page 6, sub-para-3 of para 5 of the assessment order the AO has stated that there is evidence that out of the total deposits, money siphoned off and embezzled which has been brought back. On page 8 of the said order such amount which has been brought back has been stated to be Rs.13.05 lacs. On this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sor s order for earlier years. We also find that on identical set of facts, I.T.A.T. in earlier years 1999- 2000 others order dated 20.07.2010 has deleted the addition. Since the facts are identical, respectfully following the above order of I.T.A.T. of earlier years, to maintain consistency, we decide ground no 3 4 in favour of the assessee and on merit of the case also ground nos.3 4 are decided in favour of the assessee by deleting the additions. 13. The brief facts of ground no.5 are that the A.O. made addition on account of rent received Rs.1,17,600/-. The CIT(A) confirmed the order of A.O. as per details reproduced in the order of CIT(A) while deciding ground nos.2 3. 14. At the outset, the ld. Authorised Representative submitted that this issue is also covered by the order of I.T.A.T., Agra Bench in assessee s own case for earlier years 1999-2000 to 2003-04 vide order dated 20.07.2010. The I.T.A.T. deleted the addition as per page no.8, paragraph nos.24 to 25 of the order. The relevant finding of the I.T.A.T. pointed out by the ld. Authorised Representative is reproduced as under :-. 24. Next ground relates to addition of Rs.1,54,000/- on account of Rent as ot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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