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TMI Blog2019 (11) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounting - HELD THAT:- In the instant case, there is no dispute that the assessee had advanced the sums to the GSL Educational Society and also receiving the interest and received the substantial amount from GSL Educational Society as per the incriminating material found and seized. The said sums were not accounted in the books of accounts, therefore, the said sums were admitted as income in the hands of the assessee. No evidence found during the course of search with regard to write off of the advance. The letter was received by the assessee on 28.01.2016 relevant to the F.Y.2016-17 which has no relevance in the impugned assessment year. The assessment required to be made as per the incriminating material found during the course of search and method of accounting followed by the assessee each year independently. If the assessee accepts to forego the advance merely on the basis of letter it would take the character of donation but not the allowable expenditure. Merely because the GSL Educational Society is not inclined to make the payment, the same cannot be allowed as expenditure deduction. Therefore, we are unable to accept the contention of the assessee that on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. During the course of search in the residence of Shri Adapa Rambabu, the Accountant of the society, certain incriminating material was found relating to the assessee, evidencing the undisclosed income. therefore, the AO has initiated the proceedings u/s 153C of the Act, and issued notice u/s 153C for which the assessee filed the return of income on 31.12.2014, admitting total income of ₹ 42,62,970/- including long term capital gains amounting to ₹ 28,16,958/-. During the course of assessment proceedings u/s 153C, the AO found that the assessee has claimed the deduction for payment rent of ₹ 7,36,053/- u/s 57 of the Act,i.e. from the income from other sources. Since the rent paid is not an allowable deduction u/s 57 of the Act, the AO made the disallowance of ₹ 7,36,053/- and added back to the income. 6. Against the order of the AO the assessee filed appeal before the CIT(A) and the Ld.CIT(A) confirmed the addition stating that the payment of rent was not an allowable as deduction u/s 57 of the Act. Hence, the assessee is in appeal before this Tribunal. 7. During the appeal hearing, the Ld.AR submitted that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a query from the Bench, the Ld.AR submitted that as per proviso to section 153C, the trigger date for reckoning the assessment as concluded assessment or not is the date of receiving the books of accounts or documents or assets seized or requisitioned by the AO. We have gone through the proviso to section 153C of the Act and the proviso to section 153C of the Act reads as under : Assessment of income of any other person. 153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s expired on 30.09.2013 prior to the date of transfer of the case to the AO having jurisdiction and the present AO had issued notice u/s 153C on 23.07.2014. By the time, the case was notified to the present AO, the assessment for the A.Y.2012-13 is unabated. Hence, the AO is not permitted to make any addition without having the incriminating material. In the instant case, the addition was made with reference to the rent paid by the assessee, which was accounted in the regular books of accounts and declared in the returns of income already filed and no incriminating material was found during the course of search. Therefore, the AO is not permitted to make any addition in the hands of the assessee relating to the rent paid by the assessee and the case law relied upon by the assessee in the case of Y.V.Anjaneyulu (supra) supports the assessee s case. Therefore, we set aside the order of the Ld.CIT(A) and delete the addition by the AO. Accordingly, appeal of the assessee is allowed. I.T.A.No.547/Viz/2018, A.Y.2013-14 10. In this case also, the assessee filed originally, seven grounds which were lengthy and argumentative. Later on, the assessee file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and withdrawn the proposal for making the addition of ₹ 3,50,933/-. Therefore, the assessee submitted that the sum of ₹ 56,92,455/- was also irrecoverable and in view of the society s inability to make the payment, requested to reduce the sum of ₹ 56,92,455/- also from the income admitted in the return of income already filed. The AO did not reduce the said sum, hence, the assessee filed the appeal before the CIT(A) and the Ld.CIT(A) also did not find favour with the argument of the assessee, hence dismissed the appeal of the assessee observing that the AO has not made any addition to the returned income and the hence no interference is called for in the order of the Ld.AO. 12. Against the order of the Ld.CIT(A), the assessee filed appeal before this Tribunal. During the appeal hearing, the Ld.AR submitted that the assessee was to receive interest of ₹ 56,92,455/- from GSL Educational Society. Similarly, further sum of ₹ 3,50,933/- was also worked out by the AO which is receivable from the society. GSL Educational Society has informed their inability to make the payment. Accordingly, they have written letter to the assessee to accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the letter of the society.. It is a fact that the assessee has advanced the sums to the GSL Educational Society from unaccounted sources and receiving the interest from GSL Educational Society. As per the evidence found, the assessee has to receive the sum of ₹ 56,92,455/- from GSL Educational Society which was not disputed by the assessee. Merely because GSL Educational Society decided not to make payment, accrued income cannot be reduced. The income has to be computed as per the provisions of the Act and as per which the amount accrued as per the system of accounting followed by the assessee required to be taxed. In the instant case, there is no dispute that the assessee had advanced the sums to the GSL Educational Society and also receiving the interest and received the substantial amount from GSL Educational Society as per the incriminating material found and seized. The said sums were not accounted in the books of accounts, therefore, the said sums were admitted as income in the hands of the assessee. No evidence found during the course of search with regard to write off of the advance. The letter was received by the assessee on 28.01.2016 relevant t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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