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TMI Blog2018 (5) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... at may stand to arise in the case of the assesseefirm. This is as it is they who made the cash available to the firm, which commenced operations during the current year, i.e., in June, 2006. The income referred to and offered by the partners is for AY 2009-10, which is the second year in appeal before us. How could the income generated, even if translating into cash, during the previous year relevant to AY 2009-10, be conceivably available during the relevant year, i.e., f.y. 2006-07. The ld. AR had no answer. Finally, the assessee’s states that there has been some duplication in arriving at the figure of ₹ 9.92 lacs. This is as the same figure of cash expenditure gets included both from the account of the expenditure as well as of the vendor, i.e., from whom the relevant goods/services stand sourced. We were taken through the relevant sheet by the ld. AR, to exhibit the same. We find this as correct. Also, it was shown by him that in a couple of cases, the payment made in April, 2007 has been also included while casting the total payment for which addition has been made.We, therefore, subject to the verification by the A.O. in the matter, direct for the deletion of the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business premises of a firm, M/s. Khanna Pahwa Associates, as well as at the residences of its partners. The said firm, in property dealing, is a related concern in-as-much as its two partners are fathers of two of the three partners of the assessee-firm. The returned income being nil, assessment was framed at ₹ 11 lacs, being ₹ 10 lacs added u/s. 69/69A on account of unexplained expenditure, and ₹ 1 lac estimated as income on contract work. In appeal, the ld. CIT(A) found that the aggregate expenditure for the relevant year, as per the documents found during search, found unrecorded in the books of account of the assessee-firm (recorded by Assessing Officer (AO) at pages 3 and 4 of the assessment order), is ₹ 9,92,211. The addition of the balance ₹ 7,789 was accordingly deleted. The addition of ₹ 1 lac as estimated income was, again, both ad hoc and without basis. The assessee securing part relief thus, is in second appeal against the assessment to the extent confirmed. 4. We have heard the parties, and perused the material on record. The argument that there was no search at the business premises of the assessee or its partners - a m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, incurred the expenditure, paying for the same in cash, so that the availability of cash with it on the relevant date/s (of payment) is proved. The same clearly falls u/s. 69A, which reads as under: Unexplained money, etc. 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. Alternatively, it could equally be said that the assessee has not been able to explain the source of expenditure found to have been incurred during the relevant year, in which case section 69C, which deems unexplained - as to its source, expenditure, as income, gets attracted. How, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive of the cost incurred by the assessee, on the other hand, implies it to be a sale of construction. Rather, and this constitutes the second aspect of the matter, incurring a higher expenditure implies that the expenditure was incurred in the first instance by the assessee, which was subsequently reimbursed by Mr. Anil Seth. The assessee could not have suffered a loss, as signified by the expenditure incurred being higher than the receipt, if the expenditure was being incurred from the cash made available to the assessee by him. On the contrary, how does the assessee explain the source of the excess expenditure? The argument, instead of advancing, defeats the assessee s case. That apart, there are other infirmities in the argument. There is, firstly, nothing on record to show that the construction commenced during the relevant previous year, i.e., f.y. 2006-07. Rather, going by the fact that it gets completed or substantially so, in end June, 2008, it would, given the time it normally takes for the civil construction of a residential house, have commenced some time in f.y. 2007-08, i.e., the previous year relevant to AY 2008-09. Then, again, the basis of the assessee s claim is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecifying the same in his order, as well as of the addition qua cash payments made after March 31, 2007. The assessee shall provide the necessary details/calculation. We decide accordingly, and the assessee gets partly relief. ITA No. 400/Asr/2010 (A.Y. 2009-10) 5. A reading of the assessment order reveals that the addition has in fact not been made on account of unexplained expenditure, as inferred, or even qua unexplained cash, but for the excess unaccounted receipt (Rs. 12.15 lacs) over the unexplained expenditure (Rs. 6.06 lacs), as found on the basis of the seized material (PB pages 10-25). However, as the ld. AR would point out during hearing, the very same sheet that reflects the receipt of ₹ 12.15 lacs from Shri Anil Seth, drawn as on 25.06.2008, also states the expenditure incurred on that project, at ₹ 14.74 lacs, incurring thus a loss of ₹ 2.59 lacs. The A.O. could not read a document de hors its context, drawing an inference as favourable to him, contrary to what the document explicitly states. 6. We have heard the parties, and perused the material on record. The Revenue s case is without any substance. PB page 25, listing the receipt and e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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