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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 ..... ABN Amro Bank was through cheques and not cash as evident from the bank statement – revenue could not brought anything contrary – thus, the order of the CIT(A) upheld – Decided against Revenue. Addition made on account of investment in shares – Held that:- The reason for making the impugned addition is that the investment in question does not appear in the balance sheet and the MOU does not appear to be genuine - the so called investment in shares have been derived by the assessee by virtue of the transaction in terms of the MOU, and not on account of any cash outflow from the assessee's end - In the absence of any fund flow in the process of acquiring shares, the question of any unexplained investment does not arise - When the acquisition of shares by the assessee is not disputed, one has to accept the genuineness of the MOU, since allotment of shares was result of the arrangement in terms of the MOU only – the order of the CIT(A) upheld – Decided against Revenue. Addition made on treating part of the agricultural income disclosed by the assessee treating as income from other sources – Held that:- There was no infirmity in the reasoning given by the CIT(A) for accepting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate 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 one of the suits clearly demonstrates the same. He noted that in the case of a businessman of this type, it cannot be concluded that he is not in business simply because he has no receipts, and as long as expenditure relates to the cases pertaining to the business receipts, that were admitted in the earlier years, it has to be held as business expenditure only. With these observations, the CIT(A) accepted the claim of the assessee with regard to business expenditure and deleted the addition of Rs.23,10,466 made by the Assessing Officer in this behalf. 5. We heard b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, 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 of income, which were found to be supported by entries in the cash book, came to the conclusion that there was no warrant for any addition on account of deposits in the bank accounts. He noted that the out of total deposits of Rs.1,29,500, which was wrongly taken as Rs.10,29,500 by the Assessing Officer, deposit of Rs.99,500 in ABN Amro Bank was through cheques and not cash as alleged, as evident from the bank statement. Considering the reasoning given by the CIT(A), with which we agree, and in the absence of anything to the contrary brought on record by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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. Consequently, the CIT(A) deleted the addition made by the Assessing Officer on this count. Hence, Revenue is in appeal before us on this issue. 9. We heard both sides and perused the orders of the Revenue authorities. The reason for making the impugned addition is that the investment in question does not appear in the balance sheet and the MOU does not appear to be genuine. As noted by the CIT(A) in the impugned order, in the remand report submitted by the Assessing Officer to the CIT(A), the Assessing Officer remained silent on the aspect of the MOU being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. 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 assessee would have had agricultural income of Rs.9,90,000 from Aloe plantation and vegetables, and directed to the Assessing Officer to treat the entire amount as agricultural income. Aggrieved, Revenue is in appeal on this issue. 11. The Learned Departmental Representative, strongly supporting the order fo the Assessing Officer, submitted that the assessee has not brought on record any evidence to indicate that Aloe plantations have actually been grown. In the circumstances, he submitted that there is no basis for the CIT(A) to disturb the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rievance 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 appeal being identical to the ones considered by us for the assessment year 2006-07, for the detailed reasons discussed in para 5 hereinabove, in the context of the corresponding ground of the Revenue on this issue for the assessment year 2006-07, we uphold the order of the CIT(A), and reject the ground of the Revenue on this issue. 16. The next effective grievance of the assessee in this appeal is with regard to addition made by the Assessing Officer disbelieving the agricultural income claimed by the assessee, which has been deleted by t ..... 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