9911796707
TMI Blog2022 (6) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer in making addition of Rs. 17,30,406/- as difference in profit. The action is unjustified and unwarranted. 4. You Petitioner crave leave to add, amend, alter and /or withdraw any or all the aforesaid ground of appeal." 02. Straightjacket Facts of the case show that the assessee is a partnership firm, which had business transaction and taxable income during the year and carrying on the business of interiors and paintings. 03. A search u/s 132 of the act was carried out by The Deputy Director Of Income Tax (Investigation) in case of Nagi group on 30/05/2008. 04. Accordingly, notice u/s 153A was issued on 30/11/2010. In response to that assessee filed return of income on 21/12/2010 declaring a total income of Rs. 223,592. The assessment u/s 143 (3) with Section 153A of The Income Tax Act was carried out on 30/12/2010 where the total income of the assessee was assessed at Rs. 4,605,540/- where the ld AO made a total addition of Rs. 4,381,947/-. 05. The aggrieved assessee preferred an appeal before the learned CIT - A against the above order, he allowed the appeal of the assessee partly. Therefore, against additions confirmed by the learned CIT - A assessee is in appeal befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 334,403/was paid to the partners for expenses however only Rs. 187,042 has been claimed as expenses in the accounts and the balance has been debited to the partners capital account. It was further stated that even total expenditure of Rs. 187,042/- cannot be fully disallowed as personal expenditure 011. The learned departmental representative vehemently supported the orders of the lower authorities. 012. We have carefully considered the rival contention and perused the orders of the lower authorities. In fact the facts are apparent that a sum of Rs. 334,403/- was made to the partners for expenses but only a sum of Rs. 187,042/- has been claimed in expenses in the account of the partnership and therefore the disallowance at the most could be restricted to Rs. 187,042/-. Further, the fact also shows that the assessee has incurred these expenditure on lunch and entertainment of the clients. Some of the expenditure is also in the nature of personal expenditure. Therefore to meet the interest of justice the disallowances restricted to the 50% of the sum of Rs. 187,042/- and the balance disallowances deleted. Thus, assessing officer is directed to restrict the disallowance to Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and loss account and therefore the addition is purely made based on the quotations. 015. The learned departmental representative vehemently supported the orders of the lower authorities and specifically referred to paragraph number 7 of the order of the learned CIT - A wherein it has been specifically stated that the balance work done by another concern was never shown before the learned assessing officer. He therefore stated that the learned CIT - A has correctly reduce the sum by Rs. 50,000 and confirmed the balance addition of Rs. 17, 50,131/-. There is no infirmity in the order of the lower authorities. 016. We have carefully considered the rival contention and perused the orders of the lower authorities. At page number 4 of the paper book the assessee has submitted a letter dated 27/2/2003 address to the MD of club link where it is specifically mentioned that it is a quotation for Mural work at club link Malad. Further letter dated 7/8/2002 is also addressed to the architect Mr. Jayesh Shah which is also titled as quotation for Mural work of club link amounting to Rs. 1,062,623/-. There is also a mention of discount of Rs. 80,000/- on the same quotation and final quotation ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the dissolution of the firm. Further, the assessee firm was dissolved in the relevant year , itself there remains little doubt that the said profit and loss account as per the seized document is genuine and so is the profit shown in it. He also rejected the contentions of the assessee that when the alternative addition has already made of Rs. 1,750,131/- on account of unrecorded receipt this addition should not be made. Therefore he confirmed the addition. 019. Before us the assessee submitted reconciliation at page number five of the paper book to show that there is no difference in the gross receipts amounting to Rs. 4,179,059/-. The only difference that arises is with respect to the expenditure where the seized profit and loss account shows the total expenditure of Rs. 2,226,375 whereas actual expenditure recorded in the audited profit and loss account is Rs. 3,955,377. Therefore, there is an excess of expenditure in the filed/audited profit and loss account compared to seized profit and loss account. It is the submission of the assessee that the assessee has debited higher expenditure by Rs. 1,729,001/-. However, on examination of the books of accounts of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no expenditure is disclosed except society charges. The clear-cut difference of Rs. 536,992/- of debtors write off would not have been as such added to the total income of the assessee on this count. Further, the total punches expenditure of Rs. 1,765,102/- has been accepted by the AO. The society charges debited in the seized profit and loss accounts of 88,495/- but has not been claimed as deduction by the assessee. Searched to place on 30/05/2008 and the profit and loss account is related to year ended on 31st of March 2003. The seized paper also does not have any date. Therefore, it cannot be asserted that the seized documents as well as the audited accounts are prepared on the same date. There may be certain expenditure, which are not incorporated in the seized profit and loss account however they have been incurred subsequently. In view of this, there is no reason to put more credence on the seized document. Further the findings of the learned and CIT - A - that assessee firm was dissolved during the year and therefore the profits would have been higher. Had that been the fact then higher expenditure would have been taken into account at the time of resolution of the firm an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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