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TMI Blog2013 (7) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... ings the Assessing Officer noted that the assessee group hosts a lavish party at the residential farm house during every New Year where entry is strictly by invitation only. This expenditure has been claimed as business expenditure in the hands of concerned VH group. He referred to the assessment year pertaining to A.Y. 2007-08 where the issue is discussed and certain additions were made on the basis of certain seized documents. He, therefore, came to the conclusion that the assessee was following the same practice in all the years. He, therefore, asked the assessee to explain as to why such inference should not be drawn and why cash expenses for this year also should not be estimated in the ratio of the decision for the A.Y. 2007-08 during which certain evidences were seized which relate to A.Y. 2007-08. The assessee objected to the same. However, the Assessing Officer did not accept the contention of the assessee and made addition of ₹ 31.5 lakhs on account of 31st December party expenses. In appeal the Ld.CIT(A) following his decision in A.Y. 2003-04 directed the Assessing Officer to delete the addition. 2.2 Aggrieved with such order of the CIT(A) the Revenue is in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer the assessee admitted that the addition on account of cash of ₹ 30 lakhs may be made in the hands of VHPL for A.Y. 2008- 09. The Assessing Officer accepted the above contention of the assessee that all the concerns in the group are effectively managed by Desai/Rao families and that the money generated in VHPL is utilised for payment of ₹ 30 lakhs for purchase of vintage car appears to be reasonable. He, however, made addition of ₹ 30 lakhs as unaccounted expenditure of the assessee u/s.69C for A.Y. 2008-09. 4.2 In appeal the Ld.CIT(A) deleted the addition by holding as under : "2.5 I have gone through the grounds and also considered submissions made by the appellant company and material available on record. I find that the Assessing Officer himself has observed that assessee's contention that money generated in VHPL is utilised for payment of ₹ 30 lacs for purchase of vintage car appears to be reasonable and is accepted. The Assessing Officer has however inadvertently made an addition in the computation of income. In view of this an addition of ₹ 30 lacs made in the computation of income ought to be deleted. The learned Assessing Officer is dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has offered only ₹ 13 crores as undisclosed income. Thus, there was a shortfall of ₹ 2,99,45,000/- in the declaration. On being questioned by the Assessing Officer, it was explained by the assessee that it was an inadvertent omission. However, it was submitted that the declaration was given on the basis of unaccounted receipts and application both. There was substantial duplication in the declaration given by the assessee and there was no need for a separate addition. However, the Assessing Officer was not satisfied with the above explanation and held that it does not stand the test of reason. According to him, the assessee was unable to explain the difference of ₹ 2.99 crores which denotes the unaccounted income of the beginning only. He accordingly made addition of ₹ 2,99,45,000/-. 6.2 Before the CIT(A) the assessee submitted that the addition is not at all justified. It was submitted that the total unaccounted sales were not ₹ 15.99 crores as held by the Assessing Officer but were around ₹ 6.35 crores only. Against this the assessee has already offered ₹ 13 crores as additional income. Therefore, further addition of ₹ 2.99 crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... net income can be taxed. Since the undisclosed income of ₹ 13 crores is much more than the difference between the unaccounted receipt of ₹ 15.99 crores and cash expenditure of ₹ 9.50 crores, therefore, no further addition is made. For this proposition, he relied on the following decisions 1. CIT Vs. Indeo Airways Pvt. Ltd reported in 349 ITR 85 2. CIT Vs. P.D. Abrahim reported in 349 ITR 442 6.6 The Ld. Counsel for the assessee further submitted that when evidence of any on-money is found entire receipts cannot be taxed and only a reasonable percentage of income can be taxed. For this proposition, he relied on the following decisions : 1. Bakre Construction ITA No.869 & 654/PN/2002 (ITAT Pune) 2. Navrang Enterprises ITA Nos. 4388 to 4390/Mum/01 (ITAT Mumbai) 3. Anil Lodha ITA No.132/PN/2007 (ITAT Pune) 4. Abhishek Corporation Vs. DCIT reported in 63 TTJ 651 (Ahd.) 5. Wall Street Construction Ltd. Vs. DCIT reported in 87 ITD 43 (Mum) (TM) 6. CIT Vs. President Industries reported in 258 ITR 654 (Guj.) 6.7 The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). 7. We have considered the rival arguments made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... producing evidence - Whether once a presumption had been drawn as to that contents of documents so recovered during search were true, revenue could not have, consistently with that presumption, proceeded to require assessee to produce materials in support of expenditure entries contained in very same documents - Held, yes (paras 14 & 16) (in favour of assessee)." Since in the instant case the difference between the unaccounted sale of ₹ 15.99 crores and the expenditure to the tune of about ₹ 9.50 crores is more than the additional income disclosed at ₹ 13 crores, therefore, we find merit in the submission of the Ld. Counsel for the assessee that no further addition on account of the difference is called for. We accordingly set aside the order of the Ld.CIT(A) on this issue and direct the Assessing Officer to delete the addition. This ground by the assessee is accordingly allowed. ITA No.747/PN/2012 (By Revenue) (A.Y. 2009-10) : 8. The only effective ground raised by the Revenue reads as under : 11 "Whether on the facts and the circumstances of the case and in law, the Ld.CIT(A) was justified in deleting the addition of ₹ 146.9 lakhs in respect of loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 21.90 lakhs. Thus, the cumulative figure of the loan and interest comes to ₹ 146.90 lakhs. According to the Assessing Officer in case of any cash credit the identity and credit worthiness of the person and genuineness of the transaction has to be established. Since the assessee in the instant case has not produced Mr. Dimpee to prove his identity and credit worthiness and the genuineness of the transaction, therefore, the Assessing Officer added an amount of ₹ 146.90 lakhs as unexplained cash credit u/s.68 of the I.T. Act. 8.5 Before the CIT(A) it was submitted that the Assessing Officer did not give set off of the addition u/s.68 of ₹ 1.46 crores from the unaccounted income available in the hands of the assessee. It was submitted that once set off is given no addition is called for. 8.6 Based on the arguments advanced by the assessee the Ld.CIT(A) deleted the addition. While doing so, he noted from the scanned copy of the seized document which is the basis for this addition, that the loan was taken prior to 06-07-2007. He accordingly came to the conclusion that the principal amount of ₹ 125 lakhs cannot be added as unexplained cash credit in A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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