GIRISH B. CHAUDHARI, L/H. OF BHAGWAT N CHAUDHARI,JALGAON vs. INCOME-TAX OFFICER, NASHIK

We first take up Revenue’s Appeal in IT(SS) A No. 52/PUN/2017 for adjudication. The Grounds in Revenue’s appeal are as follows: “1. Whether on the facts and circumstances of the case and in law, the ld. CIT(A) was justified in deleting the addition of Rs. 66,000/- made by the A.O on account of undisclosed expenditure fund recorded on the seized material by holding that the assessee had debited bogus purchases in the A.Ys 2006-07, 2007-08, 2008-09 and 2009-10 and there was availability of cash for telescoping against the unexplained expenditure, when the impugned bogus purchases and the unexplained expenditure were of different periods and no linkages or cash flow has been established by the assessee. (Note: The order of ld. CIT(A) is a composite order for A.Y 2009-10, 2010-11, 2011-12 and 2012-13. On identical issue, in A.Y 2009-10, appeal is filed before the Hon’ble ITAT and therefore the appeal before Hon’ble ITAT is being filed in this assessment year even though the tax effect involved is below the prescribed monetary limits as per the CBDT Instruction No. 21/2015, as the condition of monetary limit is exempted in terms of para 5 of the said Instructions) ii) Any other ground that may be urged at the time of hearing. At the outset, the ld. D.R submitted that the Revenue’s appeal is 3. having low tax effect, hence to be dismissed. The ld. A.R conceded to the submissions made by the ld. D.R. That after hearing the parties, we dismiss the Revenue’s appeal on the ground of low tax effect. 4. In the result, appeal of the Revenue is dismissed. 5. Now, we take up assessee’s appeal in IT(SS) A. No. 1132/PUN/2017. The grounds raised by the assessee in this appeal are as follows: “1] The ld. CIT(A) erred in confirming the addition on account of deemed rental of Rs. 3,09,357/- u/s 23(4) of the Act. 1.1] The ld. CIT(A) failed to appreciate that the said addition of Rs. 3,09,357/- was not justified since no incriminating evidence was found relating to this issue in the course of search and hence, the said addition ought to have been deleted. 1.2] The ld. CIT(A) failed to appreciate that the various properties in respect of which the deemed rental income was being taxed were used for the business purposes by the appellant and therefore, there was no reason to tax deemed rental income u/s 23(4) of the Act. 2] The ld. CIT(A) erred in confirming an addition of Rs. 5,229/- on account of undisclosed rental income received by the appellant without appreciating that no incriminating evidence was found relating to this issue in the course of search and hence, the said addition was not justified at all.

In the result, appeal of the Assessee is dismissed. 8. In the result, both the appeals of the Revenue as well as of the Assessee are dismissed as indicated hereinabove.