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TMI Blog2022 (8) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... s pleaded that the drawings was not accounted for by the firm in the reconciliation statement given during the remand proceedings. We find that the same is also not factually correct. The assessee, in its reconciliation statement given to Ld. CIT(A), has reversed contract receipts of Rs.312.50 Lacs and added drawings - The net difference. In the statement given on 08.01.2020, the amount shown is Rs.275 Lacs and Rs.2 Lacs which totals to Rs.277 Lacs. Therefore, there is difference in presentation only but the net impact is the same. X X X X Extracts X X X X X X X X Extracts X X X X ..... reflected creditor of Rs.224.12 Lacs in the name of M/s Chendur Earth Movers (CEM) in the Balance Sheet as filed during the course of assessment proceedings. However, this amount was not reflected in the return of income. The assessee did not furnish proof and confirmation letter for having received such amount with supportive evidences. The assessee's name did not figure in debtors list reflected by that entity. Accordingly, this amount was added to the income of the assessee. 4.3 Unexplained Investments On analysis of financial statements, it was noted that the assessee's expenses / investments were more than the income and receipts. There was difference of Rs.316.46 Lacs as under: - Opening debtors 15873830 Taxes paid 33276906 Opening cash balance 202600 Closing Bank Balance 7577511 Opening bank balance 4781969 Closing Cash Balance 13393687 Current year income 93727964 Closing debtors 698040 Agricultural income 2274960 Purchase of immovable property 157077643 Borrowals from Husband 14767200 Purchase of car 5469125 Borrowal from father 9000000 Borrowals through TMB OD 24993292 Gift from mother-in-law 5000000 Gift from others 11500000 HDFC Car lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained investment: Rs. 3,16,46.929/- The learned Assessing officer has held that the appellant failed to prove the identity, genuineness and credit worthiness of the debtors, creditors and also explain the source of the investments made and has made an addition of Rs.3,16,46,929/- holding that the expenses/investments are more than the income and receipts. It is submitted that the data considered by the learned Assessing officer is factually incorrect. The Learned Assessing officer while preparing the cash flow statement has omitted to consider the balance in Chendur Earth Movers. The balance as on 31.03.2015 was a debit balance of Rs.95,87,819/- and the balance as on 31.03.2016 was a credit balance of Rs.2,24,12,180/- the cash flow from this source is Rs.3,15,85,946/-. The profit for the year is taken as Rs.9,37,27,964/- as against the actual profit for the year of Rs.9,37,33,937/- before taking into account agricultural income and agricultural expenses. Further there was a debit balance in Gokulam Chit amounting toRs.5,25,000/- as on 31.03.2015. This has not been considered in the Cash flow statement worked out by the learned Assessing officer. So the flow statement as worked ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on improper understanding of Section 68 - 69C without appreciating the scheme of the Act, It is only where assessee found to be owner of investments, money and bullion or expenditure "Not Recorded" in the books could be added u/s 69, 69A & 69C respectively. In case of disclosed Balance Sheet, no such addition could be made on asset side. The Ld. AO has accepted the inflow of funds and the amount reflected as sundry creditors. (other than CEM). As regards investments, The Ld. AO had available with him the audited Balance Sheet of the assessee from-where it could be seen that no addition could be made for undisclosed investment from the audited Balance Sheets as investments in lands and other assets have duly been disclosed. 5.5. The reconciliation as given by the assessee was tabulated as under: - This reconciliation has been given, which is as under: (Rupees in lakhs) Capital 1288.94 As on 31.03.16 508.81 ------------ As on 31.03.15 Increase in Capital 780.13 165.00 ------------ Gifts received during the year 615.13 ------A1 Income declared for AY 2016-17 Total income 937.27 Tax 326.05 ------------ 611.22 A2 net of tax increase in capital Unrecon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on abstract figures of the Balance Sheet. The Ld. AO failed to consider the correct balance in the account of CEM since opening balance of CEM as on 31.03.2014 was Rs.95.87 Lacs (Dr.) and closing balance was Rs.224.12 Lacs (Credit) resulting into inflow for the assessee to the extent of Rs.315.85 Lacs. The opening balance of Rs.5.25 Lacs held with Gokulam Chit was also not considered in the case flow statement. Therefore, the cash flow statement could not be held to be correct. As against this, the assessee furnished correct cash flow statement as under: - Opening cash and bank balance Rs. 49,84, 569/- Add: profit as per profit and loss account Rs. 9,47, 90,275 Depreciation debited to profit and loss account Rs. 10,36,393 Gifts received during the year Rs. 1,65,00,000 Less: income tax and wealth tax Rs. 3,20,43,070 LIP and Mutual Funds Rs. 9,93,836 Drawings Rs. 2,40,000 Rs. 3,32,76,906 Rs. 8,40,34,331 Add: increase in Unsecured loans Rs. 2,37,67,200 Increase in Secured Loans Rs. 2,87,17,460 Amount withdrawn from Chendur Earth Movers Rs. 3,20,00,000 Amount withdrawn from Gokulam Chits Rs. 5,25,000 Reduction in sundry debtors Rs. 1,51,75,790 A1 Rs. 18,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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