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TMI Blog2018 (11) TMI 1546X X X X Extracts X X X X X X X X Extracts X X X X ..... sale occurred. In our considered opinion Ld.A.O. during year under consideration, cannot improve upon error committed by not verifying transaction of purchase of car during financial year 2006-07.- Decided against revenue Addition of advertising services - difference between declared receipt and offered receipt - Held that:- AO, has not disputed claim made by assessee, other than to state that no details/explanation was furnished during assessment proceedings. We agree with CIT(A) that this objection is without any merit. From assessment order, it is apparently clear that assessee had explained difference between declared receipt and offered receipt for taxation on account of accrual basis during year under consideration, whereas the bills in respect of these receipts were issued in succeeding assessment year and has been accepted by Ld.AO, while framing assessment for assessment year 2008-09.- Decided against revenue - ITA No. 4872/Del/2015, Cross Objection No.487/Del/15 - - - Dated:- 27-11-2018 - Smt. Beena A Pillai, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Sh. Gautam Jain, Adv. For the Department : Sh. Surender Pal, Sr. D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t furthermore the learned Assistant Commissioner of Income Tax has failed to appreciate sum of ₹ 25,00,000/- represented receipts against sale of car and as such had been reduced from the block of assets and have could not have been brought to tax u/s 68 of the Act. 2.3 That addition has been made mechanically, arbitrarily in disregard of the facts and position of the law and therefore untenable. In fact, it is a case of double taxation which is not permissible, as has been held by the Apex Court in the case of Laxmipat Singhania.vs. CIT reported in 72 ITR 291 and thus, addition made is invalid. 2.4 That various adverse findings recorded in the order of assessment are contrary to facts and law and, have been recorded without granting any opportunity much less valid and proper opportunity and therefore, vitiated, untenable and, unsustainable. 2.5 That further finding that since the identity of the person who deposited cash with the assessee has not been established by way of the exercise carried out, it is held that the assessee was not able to establish the identity ofthe persons which is one of the primary conditions on the part of the assessee and the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t prove creditworthiness and genuineness of transaction, in order to discharge complete onus under section 68 of the Act. Ld. AO accordingly made addition of ₹ 2,56,00,000/-under section 68 of the Act. 5. Assessee was also required to explain reasons for gross receipt, shown in P L account and billing amount. In response, it was submitted that service tax was included in gross receipts as per billing amount, and accordingly assessee furnished details of service tax branch-wise. Ld. AO after perusal of details filed, held that assessee disclosed less receipts by ₹ 62,52,198/-. Accordingly addition of such amount was made in hands of assessee. 6. Aggrieved by order of Ld.AO, assessee preferred appeal before Ld.CIT(A). Before the Ld.CIT(A) assessee filed additional evidences under rule 46A which was forwarded to Ld.AO for his remand report. Ld.CIT (A) has recorded that remand report was obtained after a period of 2 years. Upon considering remand report, Ld.CIT(A) recorded that Assessing Officer has sought necessary clarifications from assessee vide replies dated 15/10/10 and 20/10/10. Ld.CIT(A) thus concluded that, entire evidence has been considered by Ld.AO, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount- Rs. Date i. Cash deposits in bank account Total: 30,00,000 50,00,000 50,00,000 75,00,000 25,00,000 2,30,00,000 5.1.2009 5.3.2009 6.3.2009 28.3.2009 30.3.2009 ii) Cash Deposit in books of accounts Total: 25,00,000 1,00,000 26,00,000 20.07.2009 01.01.2009 iii) Total 2,56,00,000 He submitted that out of aforestated cash deposit amounting to ₹ 2,31,00,000/- in bank account, same has been declared in income for year under consideration. It has been observed as submitted by Ld. Counsel that invoices in respect of each parties from whom amount has been received by assessee is placed on record and verified by authorities below. It is also observed that Service Tax/TDS has been deducted in respect of payments received. Ld.AO neither in assessment order nor in remand report rebutted the above submissions. It was only for the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have perused submissions advanced by both sides in light of records placed before us. 17. It is observed from order passed by Ld.CIT(A) that assessee claimed depreciation of ₹ 90,55,990/-, out of which ₹ 17,98,023/- relates to depreciation on motor car. Ld.CIT(A) records that depreciation as claimed, stands allowed after reducing said sale of car. The assessee in support of sale produced cash receipt and confirmation before authorities below. Ld.CIT(A) further records that Ld.A.O. during remand proceedings made enquiries with Motor Licensing Officer who has furnished copy of vehicle particulars, wherein name of owner has been mentioned as M/s. History Logistics, which leads to conclusion that, vehicle was originally registered in name of M/s. History Logistics since 08/02/2005. It is further observed from therein that, no change of name in ownership of car has been recorded. Upon a query raised by Ld.AO, proprietor of M/s. History Logistics submitted that, he purchased car being (Porsche Cayenne) and took delivery of the same, from assessee, against which payment of ₹ 25 lakhs was made to assessee. 18. Brief facts regarding sale of car as submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogistics in the year 2005 (page 307 of paper book) ii) Copy of Form No. 29 and 30 duly signed by M/s History Logistics in favour of M/s Crayons Advertising Limited evidencing sale of car to the appellant by History Logistics (page 308 to 309 of paper book) iii) Copy of Registration Certificate of Car (page 311 of paper book) iv) Copy of Ledger Account of the car in question in the books of the appellant (page 70 of Paper Book 6.9. From the aforesaid it is apparent that both purchase and sale of car was from one person, namely, Shri Sanjay Bhandari, Prop. History Logistics. Thus the mere fact that RC was still in the name of History Logistics cannot be a ground to reject the contention of the appellant particularly when sale of car and depreciation thereon stood accepted in the order of assessment. Accordingly addition made of ₹ 25,00,000/- is also deleted. Ground nos. 2 to 2.5 of the appeal are accordingly allowed. 19. We have perused entire details submitted by assessee before authorities below and arguments advanced by Ld.Counsel, observations made by Ld.AO as well as Ld.CIT(A) regarding this issue. 19.1 . Main contention advanced by Ld.Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore Ld.CIT(A) which was sent to Ld. AO for remand. He relied upon specific observation of Ld. AO in remand report, which is reproduced in impugned order at page 26 which reads as under: although the assessee company has explained the figures in written submission, but has failed to substantiate the statement and has not explained the reason as to why this exploration could not be given during the course of assessment proceedings. The assessee wide letter dated 15/10/14 has claimed that he has received rental income amounting to ₹ 45 Lacs which has been included in gross billing but no rental income/income from house property has been declared. Hence the reconciliation furnished by assessee company cannot be accepted or relied upon since it has not been supported by relevant documents. 23.1. In reply to above reproduced observation by Ld.CIT(A) regarding rental income, Ld.Counsel submitted that rental income was not separately offered as part of house property, instead it was offered as business income as part of gross receipts, because it is income earned in course of business. 23.2 . He thus placed heavy reliance upon submissions offered by assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I find that a copy of the agreement with M/s Mega Corporation Ltd. has been furnished in the Paper Book. The appellant has also enclosed copy of ledger account of rental income as part of the Paper Book. Thus, it is seen that during the instant year appellant had incurred an expenditure on rent of ₹ 1,33,63,632/- out of which ₹ 45,00,000/- was recovered from M/s Mega Corporation Ltd. and the appellant had claimed net expenditure on rent of ₹ 88,63,632/-. Thus once the AO has allowed deduction of rent at ₹ 88,63,632/- there remains no basis to suggest that such rental income should not be reduced from the gross receipt, as the same was netted separately from rental expenses. Having regard to the above, the addition made of ₹ 62,52,198/- is deleted and these grounds raised by the appellant are allowed. 26. We have perused remand report reproduced in impugned order. We agree with Ld.CIT(A) that Ld.AO, has not disputed claim made by assessee, other than to state that no details/explanation was furnished during assessment proceedings. We agree with Ld.CIT(A) that this objection is without any merit. From assessment order, it is apparently clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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