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TMI Blog2014 (3) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.2,45,78,274, vide order of assessment 5.1.2008, in the first place, disallowed expenditure claimed by the assessee against business income, of Rs.23,10,466, on the ground that no business activity took place during the year under appeal; and also made the following additions under the head 'other sources'- (1) Unexplained cash deposits in the bank accounts Rs. 10,29,500 (2) Unexplained investment in shares Rs. 1,92,00,000 (3) Agricultural income treated as income from other sources Rs. 9,65,180 3. On appeal before the CIT(A), the assessee made elaborate submissions contesting the above additions. The CIT(A) called for a remand report in the light of the submissions of the assessee, and considering the replies of the Assessing Officer, in the light of further submissions of the assessee thereon, disposed of the appeal before him, in relation to each of the additions contested before him. 4. As for the disallowance of business expenditure, the CIT(A), noticed that the assessee, being a civil contractor, has raised disputes with regard to payments for contracts. A perusal of the expenditure claimed shows that the same was mainly due to disputes only and copies of on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consolidated balance sheet. He noted that the assessee explained that the rent arrears and rents are admitted as income from property. On verification from computation statement filed with the return of income, the CIT(A) found the said statement of the assessee to be true and the entries are also supported by the entries in the cash book. The CIT(A) further noted that the amount of Rs.99,500 considered by the Assessing Officer as cash deposit in ABN Amro while making the addition, was not by cash, but by cheques from the bank statement of ABN Amro. Accordingly, he held that there was no case to hold that the deposits in ABN Amro and SBI as unexplained and as such, there is no warrant for any addition. For these reasons and considering the evidence furnished by the assessee before him, which was also before the Assessing Officer, the CIT(A) deleted the addition made on account of unexplained credits in the bank account. Aggrieved, Revenue is in appeal on this issue. 7. We heard both sides and perused the material available on record. We find that the CIT(A), after analyzing the receipts and payments account and on verification from computation statement filed with the return o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the consolidated Balance Sheet was submitted, which reflected the investment in shares in question. Considering these submissions of the assessee, comments of the Assessing Officer, and further arguments of the assessee thereafter, the CIT(A), deleted the disallowance made by the Assessing Officer, observing that the only reason for making the addition by the Assessing Officer was that the investment was not appearing in the Balance Sheet filed before the Assessing Officer, and the MOU does not seem to be a genuine one. As against this, the CIT(A) concluded that there is nothing which warrants a conclusion that the MNOU was not a genuine one. He also took note that the value of shares as per MOU was only Rs.1,15,20,000 and not Rs.1,92,00,000. He found that these shares find place in the consolidated Balance Sheet and Schedule V thereof. He also found that there was no cash outflow as investment in this transaction because the shares were allotted against advance for supply of raw material, and as such the transaction results in entry on both assets side and liabilities side and no addition could have been made in respect of such transaction, even if the MOU were to be doubted. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the addition made of Rs.9,65,180, treating part of the agricultural income disclosed by the assessee treating as income from other sources. The Assessing Officer made this addition on the ground that no evidence was filed by the assessee, though called for. It was the case of the assessee that the Assessing Officer never specifically asked for addition in support of agricultural income. It was also stated that though the Assessing Officer observed that no evidence was furnished, accepted Rs.25,000 as agricultural income on the basis of previous year. It was also submitted before the CIT(A) that the Assessing Officer has gone through the MOU, as per which the assessee received shares in lieu of advance against supply of aloe leaves. All these aspects, which were within the knowledge of the Assessing Officer, clearly establish the value of the agricultural produce, viz. aloe leaves, supplied by the assessee. Considering all these aspects in the light of the remand report of the assessee, and further arguments before him thereon, the CIT(A) concluded that there was no case to hold that the agricultural income to the extent of Rs.9,65,000 was not genuine. Hence, holding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the family of the assessee and it is in primitive stages of its business activity. That being so, it is quite possible that the assessee is actively concentrating on agricultural activity and growth of Aloe leaves in the yeas under consideration, since it is the raw material for the company floated. In this view of the matter, we do not find any infirmity in the impugned order of the CIT(A). We accordingly uphold the same rejecting the ground of the Revenue on this issue. ITA No.349/Hyd/2011 : Assessment year 2007-08 14. The first effective grievance of the Revenue in this appeal is with regard to disallowance of business expenditure. 15. We heard both sides and perused the orders of the Revenue authorities. The amount of disallowance involved is Rs.3,63,935. For this year also, the Assessing Officer disallowed the claim of the assessee with regard to business expenditure on the ground that there was no business activity carried on by the assessee, and the CIT(A) allowed the claim of the assessee and deleted the addition made by the Assessing Officer following his appellate order for assessment year 2006-07. Facts and circumstances of the case being identical for the year under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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