9911796707
TMI Blog2012 (9) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... ked about the books of accounts of the assesse, Shri Prahalad, denied having any books of accounts of the assessee. Even in the course of assessment proceedings, the assessee did not produce the books of accounts initially. Thereafter, the cash book and ledger and two Nandi files containing vouchers relating to AY: 2006-07 as produced and the same was impounded. 3. In the course of assessment proceedings, the AO on examination of cash book found that as on 31-03-2006 there was a closing cash book of Rs.15,05,497/-. The said losing balance was the opening balance of the previous year relevant to assessment year 2007-08. The AO was of the view that the assesseee did not declare sufficient income in the returns of income filed for the assessment year 1999- 200 o 2006-07 and therefore, the source of opening cash balance as on 01-04-2007 could not be properly explained by the assessee. The AO also found that there was no withdrawal from the bank accounts of the assessee which can explain the source of opening cash balance as per the cash book. The AO therefore, added a sum of Rs.15,05,497/- as income from other sources. 4. Before the CIT(A) the assessee submitted that the cash balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, the AO considered that cash balance appears as on31-03-2006 and on the other hand, it falls during the financial year 2005-06. Thus there is merit in the assessee's submission that the AO ought to have examined the books of account for the previous year relevant to the assessment year 2006-07. The second objection is that the closing balance for the previous year ending as on 31-03-2006 cannot be subject to tax for the assessment year 2007-08. The third objection is that the AO has not brought any evidence to show that the opening cash is pertaining to the previous assessment year under consideration. Further, it is also observed that cash-in-hand appears on the assets side of the balance sheet as on 31-03- 2006 in which the asset cannot be taxed as income". 6. The CIT(A) also held as follows; "4. It is significant to note that during the previous year relevant to the assessment year 2006-07, the assessee carried out similar contract work and disclosed gross receipts of Rs.30, 98,108/-. The details of contract receipts are given below; Date Gross amount Net amount received, after deduction of TDS, Sales tax, royalty etc. 28/6/2005 77,519 69,832 7/2/2006 9,99,131 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e source of cash, except to say that the AO did not have opportunity of examining the said claim. Apart from the above, we are also of the view that the opening cash balance cannot be said to be any sum found credited in the books of the assessee maintained for the previous year which is the year from 01-04-2006 to 31-03- 2007. The decisions relied upon by the assessee before the CIT(A) support the plea of the assessee. The decision of the Hon'ble Madras High Court is contrary to the decision rendered by the Hon'ble Karnataka High Court in the case of CIT Vs N.L.Sathyanarayana Setty, (supra). Therefore, the same would not be binding. For the reasons given above, we confirm the order of the CIT(A) and dismiss ground nos.1 to 3. 9. Ground nos.4,5 & 8 can be taken up together. These grounds read as follows; "4. The CIT(A) has erred in deleting the addition of Rs.4,10,900/- made on account of sundry creditors. 5. The CIT(A) stand that books/documents were impounded by the AO and the assessee was not prevented from producing the same before the AO is untenable. 8. The CIT(A) ha erred in disallowing a sum of Rs.4,80,827/- u/s 40A(3) on account of cash payment exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the addition for the following reasons; "6.6 So far as the additions on account of other credits are concerned, the assessee contends that the books of account and other relevant materials were impounded and the same were under the control and custody of the AO. The AO has not allowed the assessee to take photocopies of the impounded books of account and other documents and hence, the assessee was not in a position to furnish the name and complete addresses of the creditors. Further, it is stated that the AO has not made any exercise to ensure the genuineness of the credits through the entire sets of books of account, which were under his custody. 6.7 In the remand report, the AO is silent on this aspect except merely stating that the assessee failed either to furnish the full address of the persons, who have carried out the machinery work, or to produce the said persons before him for verification. 6.8 It is a fact that the entire affairs of the business transactions as well as the names and addresses of the persons with whom transactions were made are available in the books of account and the relevant papers/documents. In the absence of the books of account, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing a sum of Rs.4,60,000/- u/s 37 on account of failure to produce the relevant details. 7. The CIT(A) stand that books/documents were impounded by the AO and the assessee was not prevented from producing the same before the AO is untenable". 19. The AO disallowed the claim of the assessee for deduction of a sum of Rs.4,60,000/-. The assessee had claimed an expenditure of Rs.23,00,095/- under the head 'Machinery charges, Tipper charges, Tractor charges, Water charges, Road Roller charges, Compressor charges and Labour welfare. The assessee could not furnish the full details viz., name and address of the persons to whom the aforesaid payments were made. Under the circumstances, the AO disallowed 20% of the aforesaid expenses resulting an addition of Rs.4,60,000/-. On appeal by the asseseee, the CIT(A) deleted the disallowance for the following reasons; "7.3 A perusal of the assessment order reveals that the disallowance was made since the assessee did not produce the complete details. In the remand report also, the AO has not reported any specific finding as to whether the expenditure claimed is excessive, bogus or not related to the assessee business. On the other ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
