BLUE HEAVEN WINE SHOP,SANGLI vs. INCOME TAX OFFICER WARD 5, SANGLI

Registry has pointed out that the appeal is barred by limitation as the assessee has filed the appeal before this Tribunal with a delay of 03 days. Assessee has filed an affidavit explaining the reasons which led to delay. On due consideration of the said reasons, we find that ‘reasonable cause’ prevented the assessee from filing the appeal within the stipulated time limit.

The sole grievance of the assessee is that ld.CIT(A) erred in confirming the addition of Rs.11,94,303/- towards undisclosed income/unexplained expenditure.

We have heard the rival contentions and perused the record placed before us. We observe that the assessee is a partnership running the business in the name of Blue Heaven Wine Shop. Income of Rs.33,23,470/- declared in the return of income for A.Y. 2016-17 e-filed on 12.07.2016. Return processed u/s.143(1) of the Act. Thereafter, based on the information about huge amount of cash deposit. Assessment proceedings u/s.147 of the Act were carried out. During the course of proceedings, assessee made partial submissions based on which ld. Assessing Officer firstly examined the cash deposit in the bank account vis-a-vis cash sales as well as cash expenses incurred during the year and noted that as against the opening cash in hand on 01.04.2015 at Rs.3,43,110/- and closing balance is Rs.7,904/- ld. Assessing Officer thereafter picked up specific expenses under the head Sales and Administrative expenses where the assessee has booked expenses of Rs.42,86,494/-. Details of all these expenses were not available with the Assessing Officer but it seems that he presumed that the cash expenses of Rs.30,89,109/- claimed to be 3 Blue Heaven Wine Shop

We have gone through the details including sales promotion expenses, cash sales, invoices of sales promotion expenses, bank details, cash summary and audited profit and loss account and find that the sales and administration expenses at Rs.42,86,494/- incurred by the assessee contained both expenses incurred through cash mode and through banking channel mode. Ld. AO has not disputed the genuineness of cash expenses but he has totally ignored that some expenses have been incurred through banking channel also. Even though some details were not available with the ld. AO but then complete details were filed before ld.CIT(A) who also did not take note of this fact. Therefore, considering the fact that books of account have not been rejected and they are duly audited u/s.44AB of the Act, details and sales and administrative expenses have been maintained and further sales and administrative expenses details are available in Schedule A and audited balance sheet which contains various heads and the same have been duly incurred in cash and cheque modes, in our considered view, the impugned addition made by ld. AO is merely based on surmises and conjectures without even taking note that assessee is carrying on business having turnover of approx. Rs.14.64 crore and is maintaining various bank accounts and alleged expenses are incurred through banking channel also. We therefore reverse the finding of ld.CIT(A) and 4 Blue Heaven Wine Shop

In the result, the appeal of the assessee is allowed.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, “SMC” बेंच, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. आिेश नुस र / BY ORDER,