Case Law Details
ACIT Vs Shyamsunder R. Agrawal (ITAT Ahmedabad)
ITAT Ahmedabad held that addition towards unexplained expenditure unsustainable as impugned amount has already been surrendered by the firm and accepted by the Settlement Commission.
Facts- The assessee, is partner in a partnership firm. Search operation u/s. 132 of the Act was conducted at the residential premises of the assessee, and simultaneous survey operation u/s. 133A of the Act was carried out at the business premise of M/s. Laxmi Construction on 21.10.2016. The partnership firm had filed a petition before the Settlement Commission and offered income on account of noting in this diary for settlement. The ld. Pr. CIT, Ahmedabad in his report under Rule 9 had stated that proceedings under section 153A are on-going in the case of partner Shri Shyamsundar R. Agrawal, and impact of the seized material found during the course of search shall be taken into consideration at the time of finalization. The assessee had objected to the same, and thereafter the order was passed by the Settlement Commission accepting the income returned by the assessee on account of unaccounted expenditure to the tune of Rs.1,66,98,800/- pertaining to the noting in the diary found during the search at the assessee’s premises.
During assessment proceedings, the assessee had not disclosed any income on account of noting in the impugned diary on the ground that this stood disclosed and accepted in the settlement petition of the partnership firm. But the AO did not agree with the same for the reason that Pr. CIT in his report under Rule 9 had categorically stated that the impact of diary would be considered during the course of assessment of the assessee, and also for the reason that the assessee had admitted to the transactions pertaining to his unaccounted income and expenditure. Accordingly, he made an addition of Rs.2,54,73,420/-.
CIT(A) deleted the said addition. Being aggrieved, revenue has preferred the present appeal.
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