9911796707
TMI Blog2018 (11) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) has erred in law as well as on facts in deleting the addition of Rs. 40,25,735/- made by AO on account of bogus purchase of fixed assets._ 4 The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in deleting the addition of Rs. 30,76,879/- made by AO on account of advertisement and business promotion expenses. 5 The Ld Commissioner of Income Tax (Appeals) has erred m law as well as on facts in deleting the addition of Rs. 1,53,80,453/- made by AO on account of unaccounted income being loan repayment. 6 The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in deleting the addition of Rs. 5,62,725/- made by AO on account of unaccounted income being credit appearing in the name of M/s Piron Design (P) Ltd. 7 The Ld Commissioner of Income Tax (Appeals) has erred m law as well as on facts in deleting the addition of Rs. 1,13,87,296/- made by AO on account of unexplained administrative expenses. 8. (a) The order of the CIT (A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was contended by the Ld. AR that both the AO as well as Ld. CIT(A) have not appreciated the facts in the right perspective. In the present case, the assessee has received the above amount and has included the same in the profit and loss account and paid taxes thereon. The assessee having already offered the amount to taxation, the addition of the same amount again is per-se untenable. The Ld. AR further submitted that there were no incriminating material was found during the survey and no independent enquiry has been carried out by the AO. The AO has got carried away with the Shunglu Committee report, ignoring the fact that there is no connection with the assessee. In reply, the Ld. DR placed reliance on the order passed by the AO. She contended that the addition has been rightly made by the AO. 5. We have heard both the parties and perused the records especially the impugned order and the paper book. Ongoing through the facts, it is evident that the assessee has received a sum of Rs. 79,41,600/- as consultancy income. The said amount has been included in the consultancy income declared by the assessee. The assessee having included the said amount in its income, we wonder how the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we note that the cash deposited in the bank account is duly accounted for. The assessee is maintaining regular books of accounts and the cash deposited in the bank account is duly reflected in the cash book maintained by the assessee. It is not the case of the AO that such cash deposited in bank account is not accounted for in the books of accounts of the assessee. Thus, the cash deposited in bank account is accounted for cash and we uphold the order of the CIT(A) in deleting the above said addition by holding that the cash deposited in the bank is fully accounted for and the addition made by the AO is ex-facie bad. Accordingly, Ground no. 2 of Revenue's appeal is dismissed. 8. Ground no. 3 of Revenue's appeal is regarding deletion of addition of Rs. 40,25,735/- made by the AO on account of bogus purchase of fixed assets. As per the assessment order the assessee company is engaged in the business of only providing e-learning. It has been alleged that during the course of the survey not evidence of any business activity other than elearning was found. Even the services which Mr. Ankur Aggarwal and Mr. Ashish Aggarwal claimed to have rendered to other corporate clients are only e-tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly deleted the addition. Accordingly, we uphold the order of the CIT(A) on this issue and the Ground no. 3 of the Revenue's appeal is dismissed. 10. Ground no. 4 in Revenue's appeal is regarding deletion of addition of Rs. 30,76,879/- made by AO on account of advertisement and business promotional expenses. The Ld. DR placed reliance on the order of the AO and contended that the Ld. CIT(A) was not justified in deleting the addition. As against this the Ld. AR placed reliance on the order of the Ld. CIT(A). It was contended that complete details were submitted before the AO as is evident from the Paper Book and the AO has made the addition arbitrarily ignoring the facts and the provision of Section 37 of the Act. 11. We have heard both the parties and perused the records especially the impugned order. After perusing the assessment order, we note that the AO has made the above addition by holding that there is no necessity for the assessee to incur such expenditure as the assessee company is having a turnover of Rs. 2 crore and imparting training to only e-learning. The AO further held that the assessee has failed to submit the supporting evidences regarding these expenses. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the assessment order we note that the AO has made addition in respect of the amount paid back by the assessee to the following parties not the amount received from these parties: S.No. Name of the party from whom loan has been accepted Total amount received during AY 2011-12 Total amount paid back during AY 2011-12 Interest paid Closing balance as on 31.3.2011 1 M/s Dolphin Space Systems Rs. 23,58,400 Rs. 23,58,400 NIL NIL 2 M/s Piron Consulting Pvt. Ltd. Rs. 8,94,100 Rs. 89,41,000 NIL NIL 3 M/s Indo Solutions Pvt. Ltd. Rs. 1,25,52,000 Rs. 85,28,000 NIL Rs. 40,90,000 4 M/s Piron Design Pvt. Ltd. Rs. 42,14,000 Rs. 5,89,000 NIL Rs. 36,25,000 5 Sh. Ashish Aggarwal Rs. 7,64,453 Rs. 7,64,453 NIL NIL 6 Sh. Ankur Aggarwal Rs. 36,63,500 Rs. 22,46,500 NIL Rs. 14,17,000 Total Rs. 2,44,46,453 Rs. 1,53,80,453/- NIL Rs. 54,51,000/- 13.2 In respect of the first party namely M/s Dolphin Space System, the assessee has received a sum of Rs. 23,58,400/- and paid back the same amount during the year. The documents filed before the AO in respect of this creditor is placed in PB. Pg. 266-287 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO in this case also has simply added the entire aggregate credit without even considering the fact that this is a current account between the two related concerns. All the payment have been made and received through the running bank account. This company has filed its ITR for the year under consideration of Rs. 41,60,505/-. It has a gross income from operation of 18,52,99,273/-. There is nothing abnormal in the transacitons entered in to by the assessee with this company and also in the bank account of this company. 13.5 The fourth case is that of Piron Design Pvt. Ltd. which again is a group company. The assessee has received a sum of Rs. 14,42,000/- and has paid back Rs. 5,89,000/- with the result that there is a closing credit balance of Rs. 36,25,000/-. Interestingly the AO has made addition of Rs. 5,89,000/- only being the amount paid back by the assessee during the year. The documents filed in respect of this account before the AO are placed at PB. Pg. 389 - 410 which include confirmation, copy of ledger account, bank statement, ITR and audited financials. This is also a running account as per the copy of account placed at PB. Pg. 390. This company has a gross income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and genuineness of the transactions. As discussed above, there is nothing abnormal so as to draw any adverse inference against the assessee. It may be relevant to point out that he AO has made addition without application of mind. This fact gets established that AO has made addition of the amount paid back and not that of the amount received by the assessee. In fact, the above analysis clearly demonstrate that the assessee has discharged its onus fully in respect of the credit. The observation made by the AO in the assessment order are factually incorrect. The AO has not brought any material so as to draw any adverse inference. He has indulged into surmises. The CIT(A) has rightly deleted the addition and accordingly we uphold the order of the CIT(A) deleting the addition. In the result the ground no 5 is dismissed. 14. Ground no. 6 is regarding deletion of addition of Rs. 5,62,725/- made by the AO in respect of the credit appearing in the name of Piron Design Pvt. Ltd. It was submitted by the Ld. DR that the Ld. CIT(A) has gone wrong in deleting this addition ignoring the observation of the AO in the assessment order. The Ld. AR in reply supported the order of the Ld. CIT(A). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses. The Ld. DR supported the order passed by the AO and contended that ld. CIT(A) has gone wrong in deleting the addition. In reply, the Ld. AR submitted that the addition has been made by the AO in most arbitrary manner ignoring the facts of the case. He submitted that assessee is engaged in the business of imparting education and training and all these expenses have been incurred for this business as is evident from the details submitted before the AO. The assessee has maintained regular books of accounts which have been audited. The AO has not rejected the books of accounts. The Ld. AR thus contended that Ld. CIT(A)'s order need to be upheld. 17. We have heard both the parties and perused the records, especially the order of the Ld. CIT(A). We find that the AO has made the above addition by holding that at the time of the survey no evidence of any business activity other than e-training was found. On this basis he has held that assessee has raised bogus invoices against the expenditure. On the issue of the rent and electricity expenses the AO has observed that assessee has not submitted the lease / rent agreement. On the issue of telephone expenses the AO has observed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent deed / agreements. The observation made are incorrect. The assessee has submitted three rent deeds / agreements in respect of the property for which rent has been paid as stated by the AO in the assessment order. As regards the observation made by the AO regarding the change of registered office and not submission of rent agreement in respect thereof, the AO has gone wrong in drawing adverse inference as no rent was paid for these offices which were shifted three times during the year. In the absence of any claim on account of rent of these premises, there was no reason to draw any adverse inference. Similarly on the issue of telephone expenses, the observation made by the AO that there is no need for maintaining 30 telephone connections is untenable. The assessee having incurred the expenditure, the AO cannot question the wisdom of the Assessee. The observation of the AO regarding classroom activity is also incorrect. The AO has ignored the fact which has been rightly recorded by the CIT(A) that this classroom expenses relate to payment made to Reliance Webstore through which apparently E-learning classes were conducted. We have also gone through the details of the various exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
