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TMI Blog2016 (12) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the assessment proceedings under Section 143(3) of the Act and other primary record solely on the ground that the assessee has made a confessional statement during the survey proceedings and voluntary payment of tax against the income from undisclosed source surrendered during the survey proceedings. The copy of the attendance register with details of salary was submitted during the assessment proceedings. The Assessing Officer has not pointed out any payment which is in excess of the actual payment in the assessment order. Thus the relevant material to establish the genuineness of the assessee firm was established which was overlooked by the CIT(A) as well as by the Assessing Officer. - Decided in favour of assessee - I.T.A .No.-312/DEL/2014 - - - Dated:- 20-10-2016 - SHRI G. D. AGRAWAL, VICE PRESIDENT AND SMT SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Sh. R. S. Singhvi, CA For The Respondent : Sh. S. K. Jain, SR. DR ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the assessee against the order dated 19/11/2013 passed by CIT(A)-XXVIII, New Delhi. 2. The grounds of appeal are as follows:- 1. The order of the Learned CIT (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eave to add, amend or delete or withdraw any ground of appeal at the time or before the hearing of appeal. 3. Survey under Section 133A of the Income Tax Act, 1961 was carried out in the case of the assessee and a surrender of ₹ 85,00,000/- was made in two separate assessment years i.e. ₹ 41,31,210/- in A.Y. 2009-10 and ₹ 43,68,790/- in A.Y. 2010-11. In the relevant year the surrender composed of ₹ 35,06,000/- as unexplained expenses and ₹ 6,25,210/- on account of inflated salary expenses. The Assessing Officer made the addition of the surrendered amount. 4. In the appellate proceedings, the assessee challenged the addition of ₹ 35,06,000/- added on account of unexplained marriage expenses on the basis that the Assessing Officer had not considered the following sources for meeting the marriage expenses. i) Payment from persoan bank A/c Savings. 2,18,081/- ii) Contribution by Mr. Ram Avtar 5,80,000/- iii) Shagan From relatives Friends 15,10,800/- iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 13th and that held on 17th. Thus there were other marriage ceremonies/ functions in the intervening days and from the bills it is apparent that they are not the bills on account of the main marriage ceremony. The claim of the assessee that the expense on marriage is explained as it has been met out of withdrawals and gifts from relatives and friends was not accepted by the CIT(A) as the surrender made by the assessee was clearly over and above the expense which has been met out of allegedly explained sources. The addition of ₹ 35,06,000/- was therefore confirmed by the CIT(A). 5. As regards the disallowance of the salary of ₹ 6,25,210/-, the CIT(A) held that during appellate proceedings, in response to a specific query, the assessee produced the copy of attendance register with details of salary paid. The assessee was however, unable to produce the receipts/vouchers showing actual payment of salary, on the plea that the same were misplaced. It was apparent from the facts that the expense on salary has been inflated. The disallowance of salary of ₹ 6,25,210/- was confirmed by the CIT(A). 6. The Ld. AR submitted that the return of the assessment year 2009-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture incurred in the individual capacity cannot be treated as income of the firm on the basis of confessional statement of one of the partner. There was no evidence to prove that the firm paid any amount to Sh. Subhash Gupta out of its undisclosed income. The income has been added on assumption basis. If any income has to be added it should have been taken in the hands of the concerned partner instead of the firm. No evidence / material was found to prove the existence of such income of earnings in the hands of the firm. The Ld. AR relied on the judgment of the Hon ble Apex Court in case of Girdhari Lal Nannelal Vs. Sales Tax Commissioner, M.P. (1977) 109 ITR 726 (SC) wherein it was held that in the absence of any material, the mere absence of explanation regarding the source of the expenses would not justify the conclusion that the sum in dispute represented profits of the firm derived from undisclosed sales. 9. The Ld. AR submitted in respect of the disallowance of the salary of ₹ 6,25,210/- that the visiting official did not check the attendance record for verification of employees who have left the job or were on outside duty during the survey. The assessee was not al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the firm except the statement made by the partner Sh. Subhash Gupta. The Ld. AR relied on the judgment of the Hon ble Apex Court in case of Girdhari Lal Nannelal Vs. Sales Tax Commissioner, M.P. (1977) 109 ITR 726 (SC) wherein it was held that in the absence of any material, the mere absence of explanation regarding the source of the expenses would not justify the conclusion that the sum in dispute represented profits of the firm derived from undisclosed sales. The said case law apply in the present case as the explanation was given by the Assessee during the assessment proceedings but the documents which were shown was not taken congnizance by the Assessing Officer for the expenses incurred. The statement of the partner cannot be the sole criteria for making an addition. Thus the CIT(A) was not right in confirming the addition in the hands of the Assessee firm. 12. In respect of the disallowance of the salary of ₹ 6,25,210/- the submission of the Ld. AR that no enquiry was made by the visiting officer from the staff present with regard to salaries received by them. No discrepancy was pointed out in the salary expenses claimed by the assessee or the item of any inflat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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