Assistant Commissioner of Income-tax, V. Pratibha Construction Engineers and Contractors (I) Pvt. Ltd., Kolhapur

ITA 155/PUN/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5197 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-08-2018
• Assessment Year: 2004-2005
• Appeal Filed On: 06-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ABHIJIT HALDER; SUDENDU DAS
• Keywords: Reopening of assessment; Unexplained expenditure; Income from undisclosed sources; Search and seizure; Loose papers; Revised return
• Section: 143(3); 133A; 153A; 148; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1 55 /P U N/201 5 / ASSESSMENT YEAR : 20 0 4 - 0 5 THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR . / APPELLANT VS. PRATIBHA CONSTRUCTION ENGINEERS AND CONTRACTORS (INDIA) PVT. LTD., SHILPA APARTMENT, TARABAI PARK, KOLHAPUR . / RESPONDENT PAN: AACCP6886E / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : S /S HRI ABHIJIT HALDER AND SUDENDU DAS / DATE OF HEARING : 24 . 0 1 .201 9 / DATE OF PRONOUNCEMENT: 05 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY REVENUE IS AGAINST ORDER OF CIT (A) , KOLHAPUR , DATED 2 9 . 1 0 .201 4 RELATING TO ASSESSMENT YEAR 20 0 4 - 0 5 AGAINST ORDER PASSED UND ER SECTION 143(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 1 55 /P U N/20 1 5 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE DI SALLOWANCE MADE BY THE AO AMOUNTING TO RS.3.24 CRS. ON ACCOUNT OF UNACCOUNTED EXPENDITURE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS NOT APPRECIATED THAT THE ASSESSEE FAILED TO ESTABLISH THE NEXUS BETWEEN ENCASHIN G THE CHEQUES IN QUESTION AND INCURRING THE CLAIMED EXPENDITURE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THE INTENT OF LEGISLATURE BEHIND THE REOPENING OF AN ASSESSMENT WHICH IS ONLY TO BROUGHT THE ESCAPE INCOME TO TAXATION AND NOT TO PROVIDE ANY BENEFIT TO THE ASSESSEE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT NO BENEFIT CAN BE CLAIMED BY THE ASSESSEE BY FILING RETURN/REVISED RE TURN IN RESPONSE TO NOTICE U/S 148 OF THE ACT. 5. THE APPELLANT PRAYS THE ORDER OF THE LD. CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE GROUNDS OF APPEAL NO.1 AND 2 RAISED BY REVENUE ARE AGAINST DELETION OF ADDITION OF 3. 24 CRORES BY THE CIT(A) . THE AFORESAID ADDITION WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNACCOUNTED EXPENDITURE. FURTHER, THE REVENUE HAS ALSO RAISED GROUNDS OF APPEAL NO.3 AND 4 AGAINST ORDER OF CIT(A) TO POINT OUT THAT INTENTION OF LEGISLATURE BEHIND REOPENING OF ASSESSMENT WAS ONLY TO BRING THE ESCAPED INCOME TO TAXATION AND NOT TO PROVIDE ANY BENEFIT TO THE ASSESSEE. 4. BRIEFLY, IN THE FACTS OF THE CASE, SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT AND SURVEY UNDER SECTION 133A OF T HE ACT W ERE CARRIED OUT AT THE PREMISES OF ASSESSEE ON 15.06.2010. SEARCH ACTION WAS FINALLY CONCLUDED ON 12.08.2010. DURING THE COURSE OF SEARCH, CERTAIN LOOSE PAPERS, BOOKS OF ACCOUNT WERE FOUND AND SEIZED. THE LOOSE PAPERS WERE NOTHING BUT PARALLEL C ASH BOOK MAINTAINED BY THE DIRECTORS OF ASSESSEE COMPANY IN WHICH TRANSACTIONS WERE NOTED, WHICH WERE NOT RECORDED IN REGULAR BOOKS OF ACCOUNT. WHEN PAPERS / BOOKS OF ACCOUNT WERE CONFRONTED TO THE DIRECTORS, THEY CATEGORICALLY ADMITTED THAT RECEIPTS SHOW N IN PAPERS WERE IN RESPECT OF ITA NO. 1 55 /P U N/20 1 5 3 TRANSACTIONS WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNT . A DISCLOSURE OF UNACCOUNTED INCOME OF 42.62 CRORES WAS MADE ON THIS COUNT IN THE HANDS OF ASSESSEE COMPANY, WHICH INCLUDED UNDISCLOSED INCOME OF 3,24,25,000/ - RELATING TO ASSESSMENT YEAR 2004 - 05. THE ASSESSING OFFICER HAS REPRODUCED SEIZED MATERIAL AT PAGES 2 AND 3 OF ASSESSMENT ORDER. FOR THE AFORESAID REASONS, THE ASSESSING OFFICER RECORDED REASONS FOR REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT AN D ISSUED NOTICE UNDER SECTION 148 OF THE ACT . IN RESPONSE THERETO, THE ASSESSEE FURNISHED RETURN OF INCOME DECLARING INCOME OF 1,10,64,974/ - ON 19.04.2011. THE INCOME SO DECLARED IN THE SAID RETURN WAS ORIGINALLY ASSESSED INCOME. THE RETURN FILED IN R ESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT WAS REVISED ON 06.06.2011 DECLARING TOTAL LOSS OF ( - ) 39,86,466/ - . IN THE REVISED RETURN OF INCOME, THE ASSESSEE HAD IN ADDITION TO ASSESSED INCOME ADDED UNDISCLOSED INCOME OF 36,50,000/ - AND HAD CLAIMED CASH LOSS AT ITS WARDHA SITE AT ( - ) 1,87,01,440/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER RAISED THE ISSUE OF UNACCOUNTED EXPENSES OF 3.24 CRORES AND FRESH CLAIM OF LOSS AT WARDHA SITE OF 3.24 CRORES. WHEN THE ASSESSEE F URNISHED WRITTEN SUBMISSIONS AND POINTED OUT THAT CHEQUES IN HAND OF THE BUSINESS NOT RECORDED IN REGULAR BOOKS OF ACCOUNT WERE ENCASHED IN THE PERIOD RELATING TO ASSESSMENT YEAR 2004 - 05 AND HENCE, NO ADDITION IS TO BE MADE ON ACCOUNT OF CASH EXPENDITURE O F 3.24 CRORES. IN RESPECT OF CLAIM OF ADDITIONAL LOSS OF ( - ) 1.87 CRORES IN RESPECT OF WARDHA SITE, THE ASSESSEE EXPLAINED THAT EXPENSES OF WARDHA SITE WERE 3.24 CRORES ( - ) PAYMENT OF 90,23,200/ - AND BALANCE OF 2.34 CRORES, OUT OF WHICH 20% OF E XPENSES ARE TO BE DISALLOWED UNDER SECTION 40 A(3) OF THE ACT AT 46,75,360/ - AND NET CASH LOSS UNDER THE INCOME TAX ACT WAS THUS, 1.87 CRORES AND HE MADE REQUEST FOR ALLOWING ADDITIONAL LOSS. THE ASSESSING OFFICER NOTED THAT TWO ISSUES AROSE; ONE IS T HE FRESH CLAIM OF EXPENDITURE AT WARDHA ITA NO. 1 55 /P U N/20 1 5 4 SITE, WHICH WAS NOT ACCOUNTED FOR IN BOOKS OF ACCOUNT, NOT CLAIMED ORIGINALLY WHILE FILING ORIGINAL RETURN OF INCOME UNDER SECTION 139 OF THE ACT OR EVEN IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT; AND THE SE COND ISSUE WAS TELESCOPIC ADJUSTMENT OF UNACCOUNTED EXPENDITURE OF WARDHA SITE AGAINST UNENCASHED CHEQUES ISSUED IN EARLIER YEARS BY INFLATING SUB - CONTRACT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS CLAIMING UNACCOUNTED EXPENDITURE OF 3.24 CR ORES AT TWO TIMES I.E. ONCE AT THE TIME OF SEARCH WHEN IT COMPUTES UNACCOUNTED INCOME TO OFFER, AND NOW BY FI LING REVISED RETURN OF INCOME UNDER SECTION 148 OF THE ACT. THEREFORE, LOSS CLAIMED SECOND TIME WAS NOT TO BE ALLOWED. IN RESPECT OF UNACCOUNTED EXPENDITURE , TELESCOPIC ADJUSTMENT OF 3.24 CRORES, WHICH WAS CLAIMED AGAINST UNENCASHED CHEQUES ISSUED IN EARLIER YEARS, THE ASSESSING OFFICER HELD THAT NEXUS WAS NOT PROVED BETWEEN THE TWO AND MAJORITY OF CHEQUES WERE ENCASHED IN THE MONTH OF MARCH, 201 4 I.E. AT THE FAG - END OF THE YEAR UNDER CONSIDERATION. HENCE, THIS CLAIM WAS ALSO NOT TO BE ALLOWED. HE FURTHER GOES ON TO HOLD THAT THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT WAS NOT FOR THE BENEFIT OF ASSESSEE BUT FOR TAXING THE INCOME WHICH HAD ESCAPED ASSESSMENT AND HENCE, FRESH CLAIM OF UNACCOUNTED EXPENSES MADE BY ASSESSEE WAS OUT OF PLACE. THE SECOND ADDITION WAS MA DE ON ACCOUNT OF UNEXPLAINED EXPENDITURE OF 3.24 CRORES. 5. THE CIT(A) IN RESPECT OF ADDITION OF 3.24 CRORES NOTED THAT IF AN AMOUNT HAD BEEN CONSIDERED IN THE YEAR ON SOURCE BASIS, THEN THE SAME CANNOT BE AGAIN CONSIDERED ON APPLICATION BASIS. IN THIS REGARD, HE REFERRED TO ASSESSMENT IN ASSESSMENT YEAR 2003 - 04 , WHEREIN AN ADDITIONAL INCOME OF 7.92 CRORES WAS ADDED IN THE HANDS OF ASSESSEE ON ACCOUNT OF INFLATED EXPENSES. HE HELD THAT IF THE EXPENSES WERE MADE OUT OF THIS MONEY, WHICH WAS ALREA DY OFFERED TO TAX, THEN THE EXPENDITURE COULD NOT BE TAXED AGAIN. THE ITA NO. 1 55 /P U N/20 1 5 5 CIT(A) ALSO NOTES THE FACT THAT 7.92 CRORES COULD NOT BE ASSESSED IN ASSESSMENT YEAR 2003 - 04 AS THE SAID YEAR WAS BEYOND BLOCK PERIOD, WITH RESPECT TO DATE OF SEARCH ON 15.06.2010. H E FURTHER OBSERVED THAT AN AMOUNT PERTAINING TO A PARTICULAR YEAR CANNOT BE TAXED IN SOME OTHER ASSESSMENT YEAR ON THE REASONING THAT IT CANNOT BE TAXED DUE TO S O ME REASON IN THE YEAR TO WHICH IT BELONG ED . HE THUS, HELD THAT EXPENDITURE MADE OUT OF AFORES AID AMOUNT OF 7.92 CRORES WOULD NOT BE TAXED IN THE YEAR OF EXPENDITURE SINCE THE SOURCE OF MONEY WAS EXPLAINED. HE ALSO REFERRED TO THE ORDER OF SETTLEMENT COMMISSION WHEREIN THIS FACT WAS ACCEPTED IN VERIFICATION REPORT PREPARED BY THE OFFICE OF THE S ETTLEMENT COMMISSION AT PARAS 16 AND 17 OF THE ORDER OF SETTLEMENT COMMISSION. THEREFORE, HE DELETED ADDITION OF 3.24 CRORES. 6. IN RESPECT OF DISALLOWANCE OF LOSS OF 1.87 CRORES IN RESPECT OF WARDHA SITE, THE CIT(A) VIDE PARA 8 AGREED WITH THE FINDI NGS OF ASSESSING OFFICER THAT ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT WAS NOT FOR THE BENEFIT OF ASSESSEE BUT TO BRING TO TAX ADDITIONAL INCOME, WHICH HAD ESCAPED ASSESSMENT. SINCE THE ASSESSEE HAD NEVER CLAIMED LOSS AND OFFERED IN THE ORIGINAL RE TURN OR SHORTLY THEREAFTER, THEN A FRESH CLAIM COULD NOT BE MADE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT AND IF THE CLAIM WAS IN RESPECT OF UNACCOUNTED EXPENDITURE, THEN IT COULD NEVER BE ALLOWED IN THE RETURN OF IN COME FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. IN RESPECT OF PLEA OF ASSESSEE THAT THE SAID ADDITIONAL CLAIM OF CASH LOSS OF WARDHA SITE BE ADJUSTED AGAINST INCOME AS PER ORIGINAL RETURN OF 69,16,974/ - , DISALLOWANCE UNDER SECTION 80IA(4) OF 41,48,000/ - AND ADDITIONAL UNDISCLOSED INCOME OF 36,50,000/ - , THE CIT(A) OBSERVED THAT ADDITIONAL UNDISCLOSED INCOME OFFERED WAS 36,50,000/ - , SINCE THE ADDITIONAL INCOME ITA NO. 1 55 /P U N/20 1 5 6 OFFERED AND THE LOSS CLAIMED RELATE TO WARDHA SITE, THE LOSS TO THE EXTENT O F ADDITIONAL INCOME WAS DIRECTED TO BE ALLOWED. 7. THE REVENUE IS IN APPEAL AGAINST ORDER OF CIT(A). 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER HAD REOPENED THIS YEAR ASSESSMENT UNDER SECTION 148 OF T HE ACT AS THE SAID ASSESSMENT YEAR WAS BEYOND P ERIOD OF SIX YEARS STARTING FROM THE DATE OF SEARCH. HE FAIRLY POINTED OUT THAT NO APPEAL HAS BEEN FILED BY ASSESSEE AGAINST REOPENING OF ASSESSMENT UNDER SECTION 147 / 148 OF THE ACT. HE THEN REFERRED TO YE ARS OF 153A ASSESSMENTS I.E. ASSESSMENT YEARS 2005 - 06 TO 2010 - 11 AND POINTED OUT THAT ASSESSEE IN RESPECT OF THOSE YEARS HAD FILED SETTLEMENT PETITION AND THE SETTLEMENT COMMI SSION HAS COMPLETED PROCEEDINGS. HE THEN POINTED OUT THAT VARIOUS DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH THAT REFLECTED THAT THE ASSESSEE HAD DEBITED BOGUS EXPENDITURE AND THE SAID CASH GENERATED WAS UTILIZED FOR MAKING MONEY BRIBES AND PURCHASE OF STEEL , ETC. FOR THE RELEVANT ASSESSMENT YEAR ALSO, DOCUMENTS WERE FOUND SUGG ESTING EXPENDITURE OF 3.24 CRORES OUTSIDE THE BOOKS OF ACCOUNT. HE FAIRLY ADMITTED THAT THERE WAS NO DISPUTE TO THE AFORESAID FIGURE OF 3.24 CRORES. HE THEN POINTED OUT THAT CASE OF THE ASSESSING OFFICER WAS THAT AGAINST EXPENDITURE OF CASH, THERE WAS NO SOURCE AVAILABLE WITH THE ASSESSEE AND HENCE, ADDITION WAS MADE. HE THEN POINTED OUT THAT DURING THE COURSE OF SEARCH, VARIOUS DOCUMENTS WERE FOUND AND CERTAIN PAPERS WERE RELATED TO FINANCIAL YEAR 2002 - 03, WHICH REFLECTED OVERDRAWING OF 7.92 CRORES IN THE GARB OF EXPEN DITURE. THESE CHEQUES OF 7.92 CRORES WERE ENCASHED IN THE CAPTIONED ASSESSMENT YEAR AND HENCE, CASH WAS AVAILABLE WITH THE ASSESSEE FOR MEETING UNACCOUNTED EXPENDITURE. THE LEARNED AUTHORIZED REPRESENTATIVE ITA NO. 1 55 /P U N/20 1 5 7 FOR THE ASSESSEE THUS, POINTED OUT THAT THERE WAS NO DISPUTE TO THE INCURRING OF EXPENDITURE OUTSIDE BOOKS OF ACCOUNT AT 3.24 CRORES BUT THERE WAS A DISPUTE VIS - - VIS AVAILABILITY OF CASH. HE REFERRED TO THE ORDER OF SETTLEMENT COMMISSION IN THIS REGARD AND POINTED OUT THAT IN ASSESSMENT YEAR 2005 - 06, THE ASSESSEE HAD EXPLAINED THE AVAILABILITY OF CASH OF 1.98 CRORES FOR MEETING EXPENDITURE WHICH WAS ACCEPTED BY THE SETTLEMENT COMMISSION. OUR ATTENTION WAS DRAWN TO COPIES OF SEIZED PAPERS PLACED AT PAGES 132 AND 133 OF PAPER BOOK AND DATE - WISE D ETAILS OF EXPENSES INCURRED PLACED AT PAGE S 136 TO 139 OF PAPER BOOK, TOTALING 3.24 CRORES. HE THEN, REFERRED TO SET OF SEIZED PAPERS PLACED AT PAGES 125 AND 126 OF PAPER BOOK, OF WHICH LIST OF CHEQUES GIVEN TO DIFFERENT PERSONS IN IMMEDIATELY PRECEDING YEAR TOTALING 7.92 CRORES W ERE FOUND. THEN, HE REFERRED TO PAGE 119 OF PAPER BOOK WHICH WAS A CERTIFICATE OF BANK TOWARDS ENCASHMENT OF AFORESAID CHEQUES IN FINANCIAL YEAR 2003 - 04. IN SUCH CIRCUMSTANCES, THE ASSESSEE STRESSED THAT IT HAD CASH AVAILABL E WITH IT FOR MEETING UNACCOUNTED EXPENDITURE OF 3.24 CRORES. HE PLACED SPECIAL RELIANCE ON PAGE 6 AT PAGE 4 OF APPELLATE ORDER. 9. WITH REGARD TO GROUNDS OF APPEAL NO.3 AND 4, HE POINTED OUT THAT UNACCOUNTED EXPENDITURE OF WARDHA SITE WERE TOTALING 1.87 CRORES, AGAINST WHICH ADDITIONAL INCOME WAS OFFERED AT 36,50,000/ - . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY POINTED OUT THAT THE HONBLE BOMBAY HIGH COURT IN CIT VS. CAIXA ECONOMICA DE GOA (1994) 210 ITR 719 (BOM) HAD RESTRIC TED THE ALLOWABILITY OF EXPENDITURE TO THE EXTENT OF ADDITIONAL INCOME OFFERED. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. ITA NO. 1 55 /P U N/20 1 5 8 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH HAS ARISEN IN THE PRESENT APPEAL FILED BY THE REVENUE, WHEREIN IT HAS QUESTIONED THE SOURCE OF AVAILABILITY OF CASH EXPENDITURE OF 3.24 CRORES. SEARCH / SURVEY ACTIONS WERE CARRIED OUT AT THE PREMISES OF ASSESSEE AN D DURING THE COURSE OF SEARCH, VARIOUS DOCUMENTS / BOOKS OF ACCOUNT WERE FOUND AND SEIZED. THE SAID DOCUMENTS REFLECTED THE MODUS OPERANDI ADOPTED BY ASSESSEE IN MAINTAINING PARALLEL SET OF BOOKS OF ACCOUNT. FOR ASSESSMENT YEARS 2005 - 06 TO 2010 - 11 I.E. Y EARS OF 153A ASSESSMENT, THE ASSESSEE OFFERED ADDITIONAL INCOME BEFORE THE SETTLEMENT COMMISSION AND EXPLAINED THE AVAILABILITY OF CASH IN ITS HANDS OUT OF ENCASHMENT OF CHEQUES TOTALING 7.92 CRORES, WHICH IN TURN RELATED TO ASSESSMENT YEAR 2002 - 03. THE CASE OF ASSESSEE WAS THAT THE SAID AMOUNTS THOUGH AGAINST THE SAID A CCOUNT PAYEE CHEQUES WERE ISSUED, BUT THE SAME WERE NOT ENCASHED. BEFORE US, THE ASSESSEE HAS POINTED OUT THAT UNEXPLAINED EXPENDITURE WAS DEBITED IN ASSESSMENT YEAR 2002 - 03 TOTALING 7.92 CRORES. THE CASE OF ASSESSEE WAS THAT AGAINST AFORESAID EXPENDITURE OF 7.92 CRORES, CHEQUES TOTALING 3.24 CRORES WERE ENCASHED IN ASSESSMENT YEAR 2004 - 05 AND THE SAID AMOUNT WAS AVAILABLE WITH THE ASSESSEE FOR MEETING UNEXPLAINED EXPENDITURE OF T HE YEAR UNDER CONSIDERATION TOTALING 3.24 CRORES. THE ASSESSEE HAS ALSO POINTED OUT THAT SIMILAR PLEA WAS RAISED BEFORE THE SETTLEMENT COMMISSION THAT THE CHEQUES AGAINST UNACCOUNTED EXPENDITURE OF 7.92 CRORES WERE ENCASHED IN ASSESSMENT YEAR 2005 - 06 TOTALING 1.98 CRORES AND THAT ASPECT HAS BEEN ACCEPTED BY THE SETTLEMENT COMMISSION. IN OTHER WORDS, AVAILABILITY OF CASH IN ASSESSMENT YEAR 2005 - 06 FOR MEETING UNACCOUNTED EXPENDITURE TO THE EXTENT OF 1.98 CRORES , HAS BEEN ACCEPTED BY THE SETTLEMENT COMMISSION OUT OF UNACCOUNTED EXPENDITURE DEBITED IN FINANCIAL YEAR / ASSESSMENT YEAR 2002 - 03 TOTALING 7.92 CRORES. THE UNEXPLAINED EXPENDITURE OF 3.24 CRORES WAS MET ITA NO. 1 55 /P U N/20 1 5 9 OUT OF ENCASHMENT OF CHEQUES OF UNACCOUNTED EXPENDITURE DEBITED IN FINANCIAL YEAR / ASSESSMENT YEAR 2002 - 03 TOTALING 7.92 CRORES. THE CIT(A) VIDE PARA 6 OF APPELLATE ORDER HAS ACCEPTED THE PLEA OF ASSESSEE AND THE REVENUE IS IN APPEAL AGAINST THE SAME. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, ESPECIALLY IN VIEW OF TH E ORDER OF SETTLEMENT COMMISSION ON ACCOUNT OF SIMILAR EXPLANATION GIVEN BY ASSESSEE IN ONE OF THE YEARS BEFORE THE SETTLEMENT COMMISSION, WE FIND MERIT IN THE PLEA OF ASSESSEE THAT THERE WAS UNACCOUNTED EXPENDITURE OF 7.92 CRORES IN FINANCIAL YEAR / ASS ESSMENT YEAR 2002 - 03. HOWEVER, THE SAME WAS NOT BROUGHT TO TAX IN THE HANDS OF ASSESSEE AS IT FELL BEYOND THE PERIOD OF SIX YEARS FROM THE DATE OF SEARCH, BUT THE NATURE OF ENTRY CANNOT BE DISPUTED. THE ASSESSEE EXPLAINED THAT AGAINST THE SAID UNEXPLAINE D EXPENDITURE, CHEQUES TOTALING 3.24 CRORES WERE ENCASHED AND AMOUNT WAS UTILIZED FOR PAYING UNACCOUNTED EXPENDITURE TOTALING 3.24 CRORES , DURING THE YEAR . IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE FIND MERIT IN THE PLEA OF ASSESSE E IN THIS REGARD AND WE UPHOLD THE ORDER OF CIT(A) IN DELETING THE ADDITION OF 3.24 CRORES. THE GROUNDS OF APPEAL NO.1 AND 2 ARE THUS, DISMISSED. 12. NOW, COMING TO THE SECOND ISSUE RAISED VIDE GROUNDS OF APPEAL NO.3 AND 4, WE AGAIN FIND NO MERIT IN TH E PLEA OF REVENUE ESPECIALLY WHERE THE CIT(A) HAS NOTED THAT THE ASSESSEE HAD OFFERED ADDITIONAL INCOME OF 35,60,000/ - FOR WARDHA SITE. THOUGH THE ASSESSEE HAD CLAIMED THE SAID UNEXPLAINED EXPENDITURE OF 1.87 CRORES BUT THE CIT(A) HAS RESTRICTED THE SAME TO ADDITIONAL INCOME. THE CASE OF REVENUE BEFORE US IS THAT IN 148 PROCEEDINGS, THE ASSESSEE COULD NOT BE AT A BETTER POSITION THAN ORIGINAL INCOME OFFERED IN THE HANDS OF ASSESSEE. WE AGREE WITH THE OBSERVATIONS OF LEARNED DEPARTMENTAL REPRESENTATI VE FOR THE REVENUE. HOWEVER, WE FIND NO ITA NO. 1 55 /P U N/20 1 5 10 MERIT IN THE GROUNDS OF APPEAL RAISED BY REVENUE SINCE CIT(A) HAD NOT DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION MADE IN THE HANDS OF ASSESSEE EXCEPT TO LIMIT THE ALLOWABILITY OF EXPENDITURE TO THE EXTENT OF ADDITIONAL INCOME ADDED OF 36,60,000/ - . IN VIEW THEREOF, WE DISMISS GROUNDS OF APPEAL NO.3 AND 4 RAISED BY REVENUE. HENCE, APPEAL OF REVENUE IS DISMISSED. 1 3 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 5 TH DAY OF FEBRUARY , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 5 TH FEBRUARY , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) , KOLHAPUR ; 4. THE CIT - I/II, KOLHAPUR / C IT (CENTRAL) , PUNE ; 5. 6. , , / DR B , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE