DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, NASHIK vs. M/S. ASHOKA INFRASTRUCTURE LIMITED, NASHIK

The Revenue has raised the following grounds of appeal:- 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.70,82,895/- on account of unrecorded expenses without appreciating the totality of evidences unearthed at the time of search, which are incriminating in nature. 2. On the facts and circumstances of the case, the Ld. CIT(A) failed to appreciate the addition made by AO on unrecorded expenses was bonafide estimate based on rational basis needed to be upheld as held by Hon'ble Supreme Court in CIT vs H.M. Esufali H.M. Abdulali (90 ITR 271(SC)? 3. Any other ground that may be urged at the time of hearing.

The learned Authorized Representative for the assessee at the outset pointed out that the issue raised in the present appeal stands covered by the order of Tribunal in assessee’s own case in ITA Nos.1452 to 1457/PUN/2014, relating to assessment years 2006-07 to 2011-12, order dated 30.06.2017. He also pointed out that no evidence was found for the year under consideration and hence, there is no merit in estimation of toll receipts in the hands of assessee.

Briefly, in the facts of the case, search action under section 132 of the Act was conducted on Ashoka group on 20.04.2010. During the course of search, evidences on suppression of toll receipts were found relating to assessment years 2010-11 and 2011-12. The Assessing Officer held that the assessee was suppressing the receipts from toll for generating cash outside the regular books of account for making payments to locals, for smooth functioning of toll collections. However, in the year under consideration i.e. assessment year 2012-13, no such evidence was found. The Assessing Officer did not find any merit in the arguments of assessee and applied the proposition of earlier

The CIT(A) in turn, relying on the ratio laid down by the Tribunal in assessee’s own case for assessment years 2006-07 to 2009-10 held that in the absence of any evidence found during the course of search for the year under consideration, no addition was warranted in the hands of assessee.

We find that the issue is squarely covered by the order of Tribunal in earlier years, wherein the Tribunal noted that in the absence of any evidence found for particular year, no addition is warranted by estimating the toll receipts outside the books of account. The relevant findings of Tribunal are in para 32 of the order dated 30.06.2017, which read as under:- “32. In respect of second addition made on account of estimation of toll receipts, where no evidence was found for particular year/s, we hold that no addition on this account is to be made in the hands of assessee in assessment years 2008-09 and 2009-10. However, in assessment year 2010-11, evidence was found and the said receipts were to be extrapolated for determining the toll receipts in the hands of assessee and in this regard, we uphold the order of Assessing Officer in estimating the same @ 5% of accounted toll receipts. Similarly, in the year of search i.e. assessment year 2010-11, evidence has been found for part of the month and the addition is to be restricted to the said evidence found. The evidence cannot be used for extrapolating the receipts for balance period, which is after the date of search; since, no evidence has been brought on record to establish that the same practice has been followed by the assessee in the period pursuant to the date of search. Accordingly, the Assessing Officer is directed to compute the income in the respective years in the hands of assessee.”

In the facts of the present case also during the year under consideration, no evidence was found outside the books of account and hence, we find merit in the order of CIT(A) in deleting the addition made by the Assessing Officer in the absence of any evidence, in turn relying on the ratio laid down by the

In the result, the appeal of Revenue is dismissed.