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TMI Blog2021 (11) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... ine the income of the assessee. But such document cannot give absolute power to the authorities below to work out undisclosed income of the assessee without bringing corroborative evidences. The seized document give the information to the AO to dig out the facts in more detail that too in a particular direction. The seized documents must be supported based on other materials indicating that cash received by the assessee was either available or it was utilized in some other manner. Thus, based on piece of lose paper, nothing adverse can be drawn against the assessee without verifying or bringing other corroborative evidences to support the case of the revenue. We are not inclined to confirm the order of the authorities below. Hence, we set aside the order of the learned CIT (A) and direct the AO to delete the addition made by him. - Decided in favour of assessee. - ITA No.23/Rjt/2019 - - - Dated:- 25-10-2021 - Shri Waseem Ahmed, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Assessee : Shri Nitin Kamdar, A.R For the Revenue : Shri S.S. Rathi, Sr. D.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on their behalf. These expenses were in the nature of fees to be paid to Municipal Corporation such as scrutiny fees, CD, AOP, Treeguard, development charges, Jagah Rokan, open plot charges, drainage charges etc. The cash was received from the parties for the reason that the municipal corporation does not receive the payment in cheque. Therefore such amount of cash was not recorded in the books of accounts as it was not the income of the assessee. The assessee in support of his contention filed the confirmation of all the parties to the AO during the assessment proceedings. But there was no enquiry conducted by the AO to disprove the contention of the assessee. 3.3 The assessee also submitted that seized document was neither written in his handwriting or on his letterhead nor signed by him. As such seized paper was written by the staff of the assessee for making various calculations depicting the fee to be received and the expenses to be incurred on behalf of the parties. Accordingly, the receipt of ₹27 Lacs does not represent the income of the assessee. 3.4 At the time of survey, there was not found any cash more than the cash recorded in the regular books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition of ₹5 lakhs has been made in the hands of Now Iron Triangle Ltd., therefore the same cannot be added to the total income of the assessee. However, we disagree with the contention of the learned AR for the assessee for the following reasons. i. Generally, every expenditure represents the income in the hands of the recipient. But the allowability of expenditure as deduction does not depend on the fact that the recipient has included such receipt in his income. The criteria for the expenditure from the allowability point of view has been provided under chapter IV-D of Income Tax Act being Profits and Gains of business and profession. Thus, we have to see whether the expenditure claimed by the assessee as deduction meets the conditions/provisions of the Act. Thus, the fact that the other party has included such amount of receipt in the taxable income cannot be a criteria for allowing the expenses. If this practice is adopted then it will be difficult to disallow the expenses which do not meet the criteria laid down under the provisions of law on the reasoning that the other party i.e. recipient has included such income in his return of income. ii. We have to allow th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account or other documents are found in possession or control of any person in the course of search undersection 132 or survey undersection 133A, it may be presumed that such books or documents belong to such person. Undisputedly, such presumption is rebuttable. 7.5 In this regard we also find support and guidance from the judgment of Hon ble Madras High Court in case of Lalitha Jewellery Mart (P) Ltd vs. DCIT, 115 taxmann.com 369, where it was held as under: Further, both undersection 132(4A) and section292C(1), there is only a presumption. However, such presumptions are rebuttable if adequate explanations are given. Therefore, it was not proper on the part of the DIT Kolkata to exercise control over the seized gold articles to deny the rights of the petitioner jeweller under the 1st proviso to section 132. [Para 43] 7.6 Coming to the facts of the case, we find that the assessee has furnished the necessary details such as ledgers, confirmation from the clients stating that the cash received from these parties were for certain expenses to be incurred on behalf of the clients. Furthermore, the amount of fees received by the assessee in the form of cheque was only the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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