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TMI Blog2018 (12) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire sum was offered to tax for the Assessment year 2009-10 as per the Assessment Order at Para. 6.2, 6.3 and 6.4, the Ld. CIT(A) concluded that the addition should not be made. Besides the above explanation even if it is presumed that the sum of ₹ 10 lacs is the undisclosed payment by the appellant company to Shri Ravi Bhushan, the same is required to be set off against the undisclosed income of ₹ 1,43,00,000/- offered by the appellant vide para no. 6.4 of the assessment order. The appellant also offered ₹ 7,00,000/- to cover up various discrepancies and totally offered a sum of ₹ 1,50,00,000/-as referred in para no. 1 of the assessment order. In view of the above, the addition of ₹ 10 lacs is not sustained - decided in favour of assessee Addition made on account of sundry expenses - Held that:- We find that the Assessing Officer observed that almost all the expenses were incurred towards government bodies. However, the Assessing Officer has not given a finding that the entire expenses incurred were only towards government bodies. Therefore, in the absence of specific finding that entire expenses were incurred only for the government bodies en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ₹ 24,22,000/- made by the Assessing Officer on account of undisclosed cash expenses based on incriminating evidence in the form of seized document. 2. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the addition of ₹ 10,00, 000/- made by the Assessing Officer on account of undisclosed brokerage expenses in cash based on incriminating evidence in the form of seized document. 4. Briefly stated the facts are that the Assessing Officer while completing the assessment noticed that in the course of search and seizure proceedings carried out at the residential premises of Shri M.A. Lokhandwala, one of the directors of the assessee s company, some incriminating documents and loose papers were found and seized. He noticed that certain details of payments to CRZ for clearance of project Harmony was made and in the statements recorded from Shri M.A. Lokhandwala, he has stated that there are some expenses of ₹.35,000/- for clearance of CRZ (Part A) and these expenses were incurred by him out of pocket. Similarly, he also noticed that some of the details of payments were made to registration authorities, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;, the total figure is written as 26,22,000/- . The Assessing Officer concluded that 35/= means ₹ 35,00,000/- and the same amounts to cash expenses not recorded in the books of account and in respect of figure appearing as 26,22,000/- , the AO concluded that the same is ₹ 26,22,000/-which according to him is the payments made to various authorities for registration of land. The above seized document was put before Shri Mohammed Abdul Hussain Lokhandwala during the course of search on 24.12.2008 and in response to Q. No. 6 of that statement, while explaining page no. 22 of annexure A-1, he made it clear that the sums referred to in Part 'A' of the seized document is ₹ 35,000/- and these were the expenses incurred by him out of his pocket. With regard to part 'B' of the seized document, he had replied that the same was not known to him. Therefore, if the AO had to state that it is not ₹ 35,000/- but it is ₹ 35,00,000/-, contrary to the explanation of the appellant given during the course of search, the onus is upon the AO to prove that the sums involved is ₹ 35,00,000/- and not ₹ 35,000/-. The AOs explanation that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val submissions, perused the orders of the Authorities below. Before the Ld. CIT(A) assessee contended that ₹.10 lakhs was in fact received by the assessee from Shri Ravi Bhushan as against property sold to him. Ld. CIT(A) also corroborated this fact with the findings of the Ld. CIT(A) in the case of M/s. Lokhandwala Infrastructure (P.) Ltd. for the Assessment year 2009-10 wherein the Ld.CIT(A) in the case of M/s. Lokhandwala Infrastructure (P.) Ltd. also given a finding that the assessee group sold flat to Shri Ravi Bhushan and ₹.88 lakhs was received towards amenities and ₹.10 lakhs for other amenities and ₹.25 lakhs in cheque. Therefore, in view of the finding of the Ld. CIT(A) in the case of M/s. Lokhandwala Infrastructure (P.) Ltd., the Ld. CIT(A) in the present assessee s case concluded that the explanation of the assessee shows that ₹.10 lakhs was received by the assessee from Shri Ravi Bhushan and since the entire sum was offered to tax for the Assessment year 2009-10 as per the Assessment Order at Para. 6.2, 6.3 and 6.4, the Ld. CIT(A) concluded that the addition should not be made. While holding so it has been observed by the Ld. CIT(A) as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Revenue with evidences. Thus ground raised by the Revenue is dismissed. 13. Next we take up the appeal of the assessee for the Assessment year 2010-11. 14. The first ground of appeal is in sustaining the addition made on account of sundry expenses. The Assessing Officer while completing the assessment noticed that assessee incurred certain expenses in cash and did not produce any supporting bills and vouchers. It is the finding of the Assessing Officer that these expenses are in round figures and almost all the expenses were incurred towards government bodies for providing services, therefore he disallowed the expenditure. Ld. CIT(A) sustained the same. 15. Before us Ld. Counsel for the assessee submitted that entire expenses cannot be disallowed and adhoc disallowance may be made. 16. Ld. DR strongly supported the orders of the authorities below. 17. On a perusal of the Assessment Order, we find that the Assessing Officer observed that almost all the expenses were incurred towards government bodies. However, the Assessing Officer has not given a finding that the entire expenses incurred were only towards government bodies. Therefore, in the absence of speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d u/s.133(6) of the Act. The assessee in the course of assessment proceedings submitted that vide letter dated 28.02.2014 required relevant documents such as delivery challans, invoices, payment details etc. Learned Counsel for the assessee submitted that the transaction is genuine and simply because assessee could not produce the parties/suppliers the purchases made by the assessee cannot be treated as non genuine. Not convinced with the submissions of the assessee the Assessing Officer disallowed the entire purchases of ₹.2,00,651/-, which was sustained by the Ld. CIT(A). Ld.Counsel for the assessee submitted that as the sales were not doubted and are accepted by the Assessing Officer entire purchases cannot be disallowed. 25. On hearing both the sides and perusing the orders of the Assessing Officer and Ld. CIT(A) and various case laws, we observe that the sales were accepted and the assessee produced copies of invoices, bank statements, copies of delivery challans etc., entire purchases cannot be treated as bogus. Keeping in view the nature of business conducted by the assessee we direct the Assessing Officer to restrict the disallowance to 8% of the expenses. This gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty for violation of its rules and regulations. The main purpose of levy of penalty is to discourage the developer 13 ITA NO.814 4387/MUM/2015 ITA NO.3730 4903/MUM/2016 M/s. Lokhandwala Shelters (I) (P.) Ltd. from carrying out work without / beyond approval. The fact that the irregularity committed was within the approved plan is nowhere reduces the offence of the assessee. The provisions of section 37 of the Act is clear and unambiguous as per which the assessee has incurred any expenditure which is in the nature of an offence or which is prohibited by the law is not allowable as deduction. It is the contention of the assessee that penalty paid to SRA, Mumbai is for regularization of certain constructions which was commenced before issue of commencement certificate, but not for violation or infringement of any law. The assessee further contended that it has paid amount to SRA for obtaining commencement certificate beyond certain specified period which was delayed due to ambiguity in demarcation of the Coastal Regulation Zone. The assessee further contended that the National Institute of Oceanography was approached by the Maharashtra Coastal Zone Management Authority for pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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