9911796707
TMI Blog2022 (9) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... presenting the construction expenses. Once the undisclosed income of the assessee has been admitted by the revenue then the corresponding expenses incurred out of such income should also be allowed as deduction until and unless claim of the assessee is bogus. However, the case before us is not of bogus expenses. Disallowance made under the provisions of Section 40A(3) - We note that expenses claimed by the assessee were incurred out of the unaccounted income which has already been suffered to tax. Therefore, any further disallowance under the provisions of Section 40A(3) of the Act would lead to the double addition to the total income of the assessee which is unwanted under the provisions of law. Furthermore, if the assessee claims the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal is not relevant for the year under consideration. The action of ld. CIT(A) is totally unjustified on facts as also in law. 3.0 The ld. CIT(A) erred on facts as also in law by accepting AO s argument which has considered only income part of impounded material amounting to Rs. 2,01,50,000/- and ignored application of income/expenditure part of impounded material amounting to Rs. 1,35,80,000/-. The action of ld. CIT(A) is totally unjustified on facts as also in law. 4.0 The Ld. CIT(A) erred on facts as also in law by confirming the AO s action of modifying books result without rejecting books of account. 5.0 The ld. CIT(A) erred on facts as also in law in holding that any grievance from the point of view of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the view that the assessee will get the benefit of Rs. 1,35,80,000/- against the income disclosed during the survey proceedings. 5. Besides the above, the AO also found that the impugned amount of expenditure of Rs. 1,35,80,000/- was incurred in cash and therefore, the same cannot be allowed as deduction by virtue of the provision of Section 40A(3) of the Act. Thus, the AO disallowed the same and added to the total income of the assessee. 6. Aggrieved assessee preferred an appeal to the Ld. CIT(A) who has confirmed the order of the AO by observing as under: From these findings of the AO, it can be seen that there is no impact on the profit of the appellant for the year under consideration as no any addition has been made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no dispute to the fact that the assessee in the course of survey proceedings dated 22.03.2012 under Section 133A of the Act has admitted unaccounted income to the tune of Rs. 2,01,50,000/- which was duly disclosed in the profit and loss account of the assessee which are placed on Page 33 of the Paper Book. The nature of income disclosed by the assessee during the survey operation was also explained by it in the statement recorded under section 131 (1A) of the Act stating that the entire income was generated from the land dealing activities. Part of such income was distributed among the partners of the firm and part of it was utilized for the construction of the expenses precisely amounting to Rs.1,35,80,000/-. The relevant extract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below that as a result of entries in respect of stock of Rs. 4,65,000, the effect of surrender was nullified, was misconceived. If the excess stock was not introduced in the trading account, sales of Rs. 3,57,703 could not be effected in the post-search period and yet leaving a closing stock of Rs. 2,26,785 the stock on the date of search, as per books, being only Rs. 1,81,700. The Assessing Officer had not drawn a separate trading account as per book, for the pre-search period. He had gone by the trading Profit Loss Account filed by the assessee and had computed the total income starting from the net profit of Rs. 5,22,945 as per that account. The correctness of the total sales shown at Rs. 23,11,451 was not disputed. No disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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