ACIT Central Circle 3(4), Chennai V. Arvind Srinivasan, CHENNAI

ITA 1765/CHNY/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7196 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 17-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S BHARATH
• Assessee Lawyers: B S PURUSHOTHAM
• Keywords: Capital asset; Business income; Search and seizure; Salary income; Document seized; Bonafide belief; Revised return; Documents seized; Revenue expenditure; Capital Gains
• Section: 40A(3); 143(3); 153A; 260A; 13; 153; 22

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , . , % BEFORE SHRI V.DURGA RAO , JUDICIAL MEMBER AND SHRI G.MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO. 1765/CHNY/2017 ( / ASSESSMENT YEAR: 2008-09) THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(4), CHENNAI-600 034. VS MR. ARVIND SRINIVASAN 61, OLIVER ROAD, MYLAPORE, CHENNAI-600 004. PAN: ADCPA0371R ( /APPELLANT) /RESPONDENT/ / APPELLANT BY : MR.S.BHARATH, CIT /RESPONDENT BY : MR. B.S.PURUSHOTHAM, CA /DATE OF HEARING : 02.12.2020 /DATE OF PRONOUNCEMENT : 20.01.2021 / O R D E R PER G.MANJUNATHA, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST COMMON ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-19, CHENNAI DATED 17.04.2017 AND PERTAIN TO ASSESSMENT YEARS 2008- 09. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS ON FACTS OF THE CASE AND IN LAW. 2. THE LEARNED CIT(APPEALS) ERRED IN DELETING THE 5 0% DISALLOWANCE AMOUNTING TO ` 26,01 929/- MADE BY THE AO TOWARDS UNPROVED EXPENDITURE CLAIMED BY THE ASSESSEE AGAINS T BUSINESS INCOME, IN THE ASSESSMENT ORDER PASSED U/S 153A R.W .S 143(3) OF THE IT ACT FOR AY 2008-09 IN THE ASSESSEES CASE. 2 ITA NO. 1765/CHNY/2017 2.1 THE ID. CIT (A) HAVING DELETED THE DISALLOWANCE ON THE GROUND THAT IT IS NOT ON THE BASIS OF ANY SEIZED DOCUMENTS /MATERIALS, OUGHT TO HAVE APPRECIATED THAT U/S 1 53A OF THE IT ACT, T HE AO IS ENTRUSTED WITH THE DUTY OF BRINGING TO TAX, THE TOT AL INCOME OF THE ASSESSEE WHOSE CASE IS COVERED BY SEC. I53A OF THE IT ACT FOR EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSM ENT YEARS IMMEDIATELY PRECEDING THE PREVIOUS YEAR IN WHICH SE ARCH WAS CONDUCTED AND THAT EVEN IF AN ASSESSMENT ORDER WAS PASSED U/S 143(1)/143(3)/147, THE AO IS EMPOWERED TO REOPEN TH OSE PROCEEDINGS AND REASSESS THE TOTAL INCOME TAKING NO TE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING SEARCH AND SEIZURE OPERATION. 2.2 HAVING REGARD TO THE FACT THAT IN SPITE OF AMPL E OPPORTUNITY ACCORDED, THE ASSESSEE FAILED TO PRODUCE THE ORIGIN AL BILLS/VOUCHERS AND THE DETAILS OF ALL THE EXPENSES DEBITED TO THE P & L ACCOUNT BEFORE THE AO. THE ID.CIT(A) OUGHT TO H AVE CONFIRMED THE DISALLOWANCE MADE BY THE AC IN THE ASSESSMENT O RDER PASSED U/S 153A R.W.S 143(3) OF THE IT ACT FOR AY 2008-09 IN THE ASSESSEES CASE. 3. THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF ` 5 CRORES MADE U/S 40A(3) BY THE AC IN THE ASSESSMENT ORDER P ASSED U/S I53A R.W.S 143(3) OF THE IT ACT FOR AY 2008-09 IN T HE ASSESSEES CASE. 3.1 HAVING ALLOWED RELIEF ON THE DECISION OF THE HONBLE TAT IN THE CASE OF DCLT VS MIS RK POWER GEN PVT. LTD. IN I TA NO.1864 TO 1867/MDS/2015 & CO. NOS. 125 TO L28/MDS/2015 DAT ED 22.06.2016, THE ID. CIT(A) OUGHT TO HAVE APPRECIATE D THAT THE APPEAL FILED BY THE REVENUE AGAINST THE SAID DECISI ON U/S 260A IS WAS NOT ACCEPTED BY THE REVENUE AND APPEAL U/S 260A OF THE IT ACT HAS BEEN PREFERRED BEFORE THE HONBLE HIGH COUR T. 3.2 THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ORIGINAL MOU WAS SIGNED ON 29.08.2007 AND THE SUPPLEMENTARY AGREEMENT ON 27.02.2013 WHICH IS MUCH AFTER THE DAT E OF ORIGINAL ASSESSMENT WHICH WAS 29.12.2010 AND EVEN AFTER SEAR CH I.E. ON 12.06.2011 AND THAT THE WHOLE SUPPLEMENTARY AGREEME NT IS JUST AN AFTERTHOUGHT TO PROVIDE LEGITIMACY TO THE STAND OF THE ASSESSEE. 3.3 THE LD,CIT(A) OUGHT TO HAVE APPRECIATED THAT THE SUPPLEMENTARY DEAL WAS NOT WITHIN THE KNOWLEDGE OF THE AO AT THE TIME OF THE ORIGINAL ASSESSMENT OR THE SEARCH ASSES SMENT AND AS SUCH, THE LD.CIT(A) OUGHT TO HAVE ACCORDED AN OPPOR TUNITY TO THE AO TO EXAMINE THE SAID PROOF BY CALLING FOR A REMAN D REPORT FROM THE AC AS ENVISAGED UNDER RULE 46A OF THE IT RULES 1962. 3 ITA NO. 1765/CHNY/2017 3.4 HAVING REGARD TO THE FACT THAT AS PER SEIZED DO CUMENTS AND AS ADMITTED BY THE ASSESSEE IN HIS SWORN STATEMENT, RS.10,00.00,000/- WAS PAID TO MIS KOKILAM FOUNDATIO N AND OUT OF THIS PAYMENT OF ` 10 CRORES. A SUM OF RS.5 CRORES WAS MADE IN CASH IN VIOLATION OF THE PROVISIONS OF SEC,40A(3) O F THE IT ACT, THE ID,CIT(A) OUGHT TO HAVE CONFIRMED THE DISALLOWANCE MADE U/S 40A(3) BY THE AO IN THE ASSESSMENT ORDER PASSED U/S 153A R.W.S 143(3) OF THE IT ACT FOR AY 2008-09 IN THE ASSESSEE S CASE. 4. THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 56,97,318/- MADE BY AO, BY ADOPTING THE INCOME OF RS. 24,40.011 /-RETURNED BY THE ASSESSEE IN THE RETURN OF INCOME FILED U/S 1 53A OF THE IT ACT BY ASSESSEE, IN THE ASSESSMENT ORDER PASSED U/S 153 A R.W.S 143(3) OF THE IT ACT FOR AY 2008-09 IN THE ASSESSEE S CASE. 4.1 HAVING ALLOWED RELIEF ON THE BASIS OF FROM THE LETTER DATED 25/3/2014 WRITTEN BY ASSESSEE TO ASSESSING OFFICER , THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE DATE OF ASSESSMENT ORDER IS ALSO 25/3/2014 AND THAT THE SAID LETTER DT. 25/3/2014 IS NOT AVAILABLE ON RECORD NOR ASSESSEE HAS FILED ANY PHOTOCOPY OF THE SAME DULY ACKNOWLEDGED BY AO AND AS SUCH PRODU CTION OF LETTER DATED 25/3/2014 BEFORE LEARNED CIT(A) IS AN AFTERTHOUGHT ON PART OF THE ASSESSEE. 4.2 ADMITTING BUT NOT ACCEPTING THAT THE LETTER DT. 25/3/2014 WAS HANDED OVER TO THE AO. THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THAT THE SAME WAS NOT CONSIDERED FOR THE SIMPLE REA SONS THAT THE TOTAL INCOME COULD ONLY BE REVISED BY FILING REVISE D RETURN OF INCOME AND NOT BY FILING A RECONCILIATION STATEMENT AS LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF M/S GOETZ (INDIA) LTD 284 ITR 323. 3. AT THE OUTSET, WE FIND THAT THERE IS A DELAY OF 3 DAYS IN FILING APPEAL BY REVENUE, FOR WHICH NECESSARY PETITION ALO NG WITH AFFIDAVIT HAS BEEN FILED FOR CONDONATION OF DELAY. THE REASONS GIVEN BY REVENUE FOR NOT FILING APPEAL WITHIN THE TIME ALLOWED UNDER THE ACT IS UNDER A BONAFIDE BELIEF. THE LEARN ED AR HAS NO OBJECTION FOR CONDONING DELAY IN FILING THE APPEA L. THEREFORE, WE 4 ITA NO. 1765/CHNY/2017 CONDONE THE DELAY IN FILING APPEAL BY THE REVENUE AND ADMIT THE SAME FOR HEARING. 4. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A DIRECTOR OF BELAIR GROUP OF COMPANIES, WHICH IS ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. A SEARCH AND SEIZURE OPERA TION U/S.132 OF THE INCOME TAX ACT, 1961 WAS UNDERTAKEN IN THE CASE OF BELAIR GROUP ON 21.06.2011 AT BUSINESS PREMISES OF COMPANI ES AND RESIDENTIAL PREMISES OF DIRECTORS INCLUDING THAT O F MR.ARVIND SRINIVASAN. CONSEQUENT TO SEARCH, NOTICE U/S.153A OF THE ACT ON 11.11.2011 WAS ISSUED FOR WHICH ASSESSEE HAS FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 ON 18.12.2012 DECLARING TOTAL INCOME OF ` 5,83,130/-. THE ASSESSMENT HAS BEEN COMPLETED U/S.143(3) R.W.S 153A OF ACT ON 25.03.2014 AND DETE RMINED TOTAL INCOME OF ` 5,58,18,668/-, INTER-ALIA, BY MAKING ADDITIONS TO WARDS AD-HOC DISALLOWANCE OF 50% OF VARIOUS EXPENSES AMOU NTING TO ` 26,01,929/-, AND ADDITIONS TOWARDS CASH PAYMENT FOR PURCHASE OF PROPERTY U/S.40A(3) OF THE ACT FOR ` 5,00,00,000/-. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER ARE AS UNDER:- 5. THE ASSESSMENT IS COMPLETED ON THE BASIS OF DET AILS SUBMITTED IN COURSE OF THE SCRUTINY PROCEEDINGS AND THE MATERIAL AVAILABLE ON RECORD. 5 ITA NO. 1765/CHNY/2017 THE ASSESSEE IS HAVING SALARY INCOME FROM BELAIR EN TERPRISES PVT. LTD.. AS A DIRECTOR. BESIDES, HE HAS HOUSE PRO PERTY INCOME AND INCOME FROM BUSINESS. THE ASSESSEE HAS CLAIMED INCOME FROM SALARY, HOUSE PROPERTY, CAPITAL GAINS AND BUSI NESS OF BROKERAGE AND COMMISSION. IN THE PROFIT AND LOSS AC COUNT A NUMBER OF EXPENSES HAVE BEEN DEBITED FOR WHICH HE W AS REQUESTED TO FURNISH THE EVIDENCES VIDE QUESTIONNAI RE DATED 11.01.2013, BUT NO EVIDENCES WHATSOEVER HAVE BEEN F URNISHED. ONLY THE LEDGER ACCOUNTS WERE FURNISHED. HENCE, 50% OF THE EXPENSES ON ELECTRICITY CHARGES OF RS1,88,414/-, BU SINESS PROMOTION EXPENSES OF RS,28,000/-, TELEPHONE CHARGE S OF RS.51,696/-, INTEREST PAYMENT OF ` 38,12,269/-, CONSULTANCY CHARGES OF RS.11,23,479)- WHICH COMES TO ` 26.01,929/- IS HEREBY DISALLOWED AND ADDED BACK TO THE TOTAL INCOM E. DURING THE YEAR. THE ASSESSEE HAS ENTERED INTO JOIN T VENTURE WITH M/S.KOKILAM FOUNDATIONS PVT. LTD. FOR JOINTLY INVESTING IN LAND MEASURING 25 ACRES AT PARIVAKKAM VILLAGE, POON AMALLEE TALUK. THIRUVALLUR DISTRICT. FOR THIS HE HAD TO PAY TO RS.I0,00,00,000/-. ACCORDING TO THE LOOSE SHEETS NO S.22-28 OF ANN/RSK/LS/S7, RS,L0,00,00,000/- WAS PAID TO M/S.KO KILAM FOUNDATIONS FOR THIS. BUT IN THE BOOKS ONLY RS.7,7 0,00,000/- WAS ACCOUNTED. WHEN ASKED TO SHOW CAUSE, THE ASSESSEES AR SUBMITTED ON 28.03.2014 THAT THE UNACCOUNTED INVEST MENT WAS FROM THE AMOUNT OF UNDISCLOSED RECEIPT OF ` 2,50,00,000/- FROM OM SHAKTHY AGENCIES IN THE ASSTT. YES 2007-08. HOWEVER IT WAS FOUND THAT OUT OF THE TOTAL AMOUNT O F RS. I0,00,00,000/- PAID TO KOKILAM FOUNDATION IT WAS FO UND THAT RS.500,00,000/- WAS PAID IN CASH. WHEN ASKED TO SHO W CAUSE WHY IT SHOULD NOT HO DISALLOWED U/S4OA(3) OF THE AC T, THE ID. A/R SUBMITTED A REPLY THAT IT WAS AN INVESTMENT AND NOT AN EXPENDITURE. IT WAS ALSO SUBMITTED THAT AN ADDITION AL INCOME OF RS,4,25,00,000/- ON THE INVESTMENT WAS BEING OFFERE D FOR TAXATION IN THE ASSTT. YEAR 2009-10. BUT THE CONTEN TION OF THE ASSESSES IS NOT CORRECT AND ACCEPTABLE. THE ASSESSE E IS REGULARLY ENGAGED IN PURCHASE AND SALE OF LAND IN A N ORGANIZED MANNER, THE LAND HAS BEEN SHOWN AS STOCK IN TRADE I N THE BALANCE SHEET, THE ASSOSSEE MAY, NOW CLAIM THAT R,,4,25,00,000/- IS THE RETURN ON INVESTMENT. BUT I T IS ACTUALLY THE PROFIT OF THE ASSESSEE. HENCE THE PAYMENT OF RS, 10 ,00,00,000/- 6 ITA NO. 1765/CHNY/2017 WAS HIS REVENUE EXPENSE EVEN BOUGH HE IS NOW CLAIMI NG IT TO BE INVESTMENT AND EVEN THOUGH IT WAS NOT PAID DIRECTLY TO THE PERSONS FROM WHOM THE LAND WAS PURCHASED. FOR THIS REASON, THE AMOUNT OF RS.5,00,00,000/- BEING A REVENUE EXPENSE WILL ATTRACT THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 5. BEING AGGRIEVED BY ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) . BEFORE THE LE ARNED CIT(A) , ASSESSEE HAS CHALLENGED ADDITIONS MADE BY THE ASSE SSING OFFICER TOWARDS AD-HOC DISALLOWANCE OF EXPENSES ON THE GROU ND THAT WHEN EXPENSES DEBITED INTO PROFIT & LOSS ACCOUNT HAS BEE N ACCEPTED AS GENUINE IN THE ASSESSMENT FRAMED U/S.143(3) OF THE ACT, THEN NO AD-HOC OR ESTIMATED DISALLOWANCE CAN BE MADE IN THE ASSESSMENT FRAMED U/S.153A OF THE ACT, IN ABSENCE OF ANY INCR IMINATING MATERIALS FOUND AS A RESULT OF SEARCH, WHICH INDIC ATES INFLATION OF EXPENDITURE OR EXPENDITURE DEBITED INTO PROFIT & LO SS ACCOUNT IS BOGUS IN NATURE. THE ASSESSEE HAS CHALLENGED ADDIT IONS MADE BY THE ASSESSING OFFICER TOWARDS DISALLOWANCE OF CAS H PAYMENT U/S.40A(3) OF THE ACT AMOUNTING TO RS.5.00 CRORES ON THE GROUND THAT ALTHOUGH THE ASSESSEE BY INADVERTENT ERROR HA S SHOWN PURCHASE OF LAND AS STOCK-IN-TRADE IN THE FINANCIAL STATEMENT FILED FOR RELEVANT YEAR ALONG WITH RETURN OF INCOME, BUT FACTS REMAINS THAT MOU AND SUBSEQUENT SUPPLEMENTARY AGREEMENT BETWEEN 7 ITA NO. 1765/CHNY/2017 ASSESSEE AND M/S KOKILAM FOUNDATIONS PVT.LTD. CLE ARLY INDICATE THAT ASSESSEE HAS INVESTED A SUM OF RS.10.00 CRORE S IN THE JOINT DEVELOPMENT PROJECT WITH AN ASSURED RETURN OF RET URN ON THE INVESTMENT AND HENCE, MERELY FOR THE REASON THAT BY INADVERTENT ERROR THE SAME HAS BEEN TREATED AS STOCK-IN-TRADE IN THE BOOKS OF ACCOUNT, GENUINE INVESTMENTS MADE BY ASSESSEE CANN OT BE CONSIDERED AS PURCHASE OF PROPERTY TO INVOKE PROV ISIONS OF SECTION 40A(3) OF THE ACT. THE ASSESSEE HAS ALSO T AKEN ADDITIONAL GROUND CHALLENGING FINDINGS OF THE ASSESSING OFFIC ER , INSOFAR AS COMPUTATION OF PROFIT AND GAINS FROM BUSINESS AND PROFESSION IGNORING REVISED PROFIT & LOSS ACCOUNT EXCLUDING PU RCHASE OF LAND AND CLOSING STOCK FILED, WHICH RESULTED IN NET LOSS OF ` 34,57,307/- AS AGAINST PROFIT OF ` 24,40,011/-. 6. THE LEARNED CIT(A) AFTER CONSIDERING RELEVANT S UBMISSIONS OF THE ASSESSEE AND HAS ALSO TAKEN VARIOUS EVIDENCES FILED DURING THE COURSE OF APPELLATE PROCEEDINGS HELD THAT WHEN NO ADDITIONS OR DISALLOWANCES OF EXPENDITURE WAS MADE IN 143(3) AS SESSMENT , THERE CANNOT BE ANY DISALLOWANCE TOWARDS SIMILAR EX PENDITURE IN THE ASSESSMENT FRAMED U/S.153A OF THE ACT, WITHOUT REFERENCE TO 8 ITA NO. 1765/CHNY/2017 ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE LEARNED CIT(A) FURTHER NOTED THAT ASSESSING OFFICE R HAS NOT MADE ANY REFERENCE TO SEARCH FINDING WHICH WARRANTS DISA LLOWANCE OF EXPENDITURE ON AD-HOC BASIS AND ACCORDINGLY DELETED ADDITIONS MADE TOWARDS 50% OF AD-HOC DISALLOWANCE OF EXPENSES . AS REGARDS ADDITIONS MADE TOWARDS DISALLOWANCE OF CAS H PAYMENT U/S.40A(3) AMOUNTING TO ` 5.00 CRORES , LEARNED CIT(A) BY TAKING NOTE OF VARIOUS FACTS AND ALSO BY FOLLOWING THE DEC ISION OF ITAT CHENNAI BENCH IN THE CASE OF M/S. RK POWER GEN PVT. LTD IN ITA NO.1864 TO 1867/CHNY/2015 DELETED ADDITIONS MADE TO WARDS DISALLOWANCES OF EXPENDITURE U/S.40A(3) BY HOLDING THAT CASH PAYMENT MADE TO M/S. KOKILAM FOUNDATIONS PVT.LTD. WAS MORE LIKE FINANCIAL ARRANGEMENT WHEREBY ASSESSEE HAS INV ESTED A SUM OF ` 10 CRORES WITH AN EXPECTATION OF 24% RATE OF RETU RN. AS PER THE TERMS OF MOU AND SUPPLEMENTARY AGREEMENT DATED 27.02.2013, TRANSACTIONS BETWEEN THE PARTIES ARE AK IN TO INVESTMENT ACTIVITY WHICH CANNOT BE CONSIDERED AS P AYMENT MADE FOR PURCHASE OF LAND MERELY FOR THE REASON THAT BY INADVERTENT ERROR THE SAME HAS BEEN SHOWN AS STOCK-IN-TRADE IN THE RE LEVANT ASSESSMENT YEAR, MORE PARTICULARLY, WHEN ASSESSEE HAS 9 ITA NO. 1765/CHNY/2017 SUBSEQUENTLY RECTIFIED MISTAKES IN THE FINANCIAL ST ATEMENT BY FILING REVISED STATEMENT BEFORE THE ASSESSING OFFICER. SIM ILARLY, AS REGARDS ADDITIONAL CLAIM OF ASSESSEE REGARDING RE VISED STATEMENT OF PROFIT & LOSS ACCOUNT WITH A LOSS OF ` 34,57,307/- AS AGAINST PROFIT OF RS.24,40,011/-, LEARNED CIT(A) AFTER CON SIDERING RELEVANT FACTS HAS DIRECTED THE ASSESSING OFFICER TO ADOPT NET LOSS AS PER REVISED STATEMENT OF PROFIT & LOSS ACCOUNT BY HOLDI NG THAT WHEN NATURE OF TRANSACTIONS BETWEEN THE ASSESSEE AND M /S.KOKILAM FOUNDATIONS PVT. LTD., IS AN INVESTMENT TRANSACTIO N WHICH IS BY INADVERTENT ERROR CONSIDERED AS PURCHASE OF LAND AN D STOCK-IN- TRADE HAS TO BE ACCEPTED BECAUSE THE TERMS & CONDIT IONS OF MOU BETWEEN THE PARTIES AND SUBSEQUENT SUPPLEMENTARY AG REEMENT, WHICH CLEARLY INDICATES THAT PAYMENT MADE TO M/S.K OKILAM FOUNDATIONS PVT. LTD. IS AN INVESTMENT IN JOINT VE NTURE FOR DEVELOPMENT OF PROPERTY, BUT NOT PURCHASE OF PROPER TY BY THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. AGGRIEVED BY THE LEARNED CIT(A) ORDER, REVENUE IN APPEAL BEFORE US. 7. THE FIRST ISSUE THAT CAME UP FOR OUR CONSID ERATION FROM GROUND NO.2 OF REVENUE APPEAL IS AD-HOC DISALLOWAN CE OF VARIOUS EXPENSES AMOUNTING TO ` 26,01,929/-. THE ASSESSING OFFICER HAS 10 ITA NO. 1765/CHNY/2017 MADE DISALLOWANCE OF VARIOUS EXPENSES LIKE ELECTRI CITY CHARGES, INSURANCE, COMMISSION, TELEPHONE CHARGES, VEHICLE M AINTENANCE AND REPAIRS & MAINTENANCE ETC. ON THE GROUND THAT A SSESSEE HAS FAILED TO FILE NECESSARY EVIDENCES TO JUSTIFY CLAIM OF EXPENSES. 8. THE LEARNED DR SUBMITTED THAT LEARNED CIT(A) HAS ERRED IN DELETING ADDITIONS MADE TOWARDS AD-HOC DISALLOWANCE OF EXPENSES WITHOUT APPRECIATING THE FACT THAT ASSESSING OFFICE R IS ENTRUSTED WITH DUTY OF BRINGING TO TAX TOTAL INCOME OF ASSESS EE, WHOSE CASE IS COVERED BY SECTION 153A OF THE ACT FOR EACH ASSE SSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRE CEDING PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED. THE LEARNED DR FURTHER SUBMITTED THAT LEARNED CIT(A) HAS FAILED TO APPRECI ATE THE FACTS THAT IN SPITE OF AMPLE OPPORTUNITY, ASSESSEE HAS FA ILED TO PRODUCE BILLS AND VOUCHERS FOR EXPENSES DEBITED INTO PROFIT & LOSS ACCOUNT. 9. THE LEARNED AR FOR THE ASSESSEE, ON THE OTHER HAND, SUPPORTING THE ORDER OF LEARNED CIT(A), SUBMITTED T HAT ASSESSEE HAS MAINTAINED COMPLETE BOOKS OF ACCOUNTS AND VOUCH ERS TO BACK UP ITS CLAIM AND THE SAME WERE PRODUCED BEFORE ASSE SSING OFFICER 11 ITA NO. 1765/CHNY/2017 FOR VERIFICATION. THE LEARNED CIT(A) AFTER CONSIDER ING RELEVANT FACTS HAS RIGHTLY DELETED ADDITIONS MADE TOWARDS 50% AD- HOC DISALLOWANCE OF EXPENSES. 10. WE HAVE HEARD BOTH PARTIES, PERUSED MATERIALS A VAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORIT IES BELOW. THE FACTS BORNE OUT FROM THE RECORDS INDICATE THAT AD-H OC DISALLOWANCES MADE BY ASSESSING OFFICER TOWARDS VAR IOUS EXPENSES HAVE BEEN ALLOWED AS GENUINE IN THE SCRUTI NY ASSESSMENT COMPLETED U/S.143(3) OF THE ACT FOR THE RELEVANT ASSESSMENT YEAR. IT IS ALSO AN ADMITTED FACT THAT A SSESSING OFFICER HAS MADE AD-HOC/ESTIMATED DISALLOWANCE OF EXPENSES WITHOUT MAKING ANY REFERENCE TO INCRIMINATING MATERIALS FOU ND AS A RESULT OF SEARCH WHICH INDICATE THAT EXPENDITURE DEBITED T O PROFIT & LOSS ACCOUNT IS NOT GENUINE EXPENDITURE AND WHICH ARE NO T INCURRED FOR THE PURPOSE OF BUSINESS. IT IS WELL SETTLED PRINCIP LE OF LAW THAT UNLESS ASSESSING OFFICER MAKES OUT A CASE THAT EXPE NDITURE DEBITED TO PROFIT & LOSS ACCOUNT IS NOT GENUINE AND WHICH ARE NOT SUPPORTED BY NECESSARY EVIDENCES, HE CANNOT MAKE A D-HOC DISALLOWANCE ON THE GROUND THAT ASSESSEE HAS NOT PR ODUCED NECESSARY DETAILS AND VOUCHERS FOR VERIFICATION. IN THIS CASE, ON 12 ITA NO. 1765/CHNY/2017 PERUSAL OF ASSESSMENT ORDER PASSED BY ASSESSING OFF ICER, WE FIND THAT ASSESSING OFFICER HAS FAILED TO MAKE OUT A CA SE FOR AD-HOC DISALLOWANCE OF EXPENSES, THAT TOO IN THE ASSESSMEN T FRAMED U/S.153A OF THE ACT. THEREFORE, CONSIDERING FACTS A ND CIRCUMSTANCES OF THIS CASE AND BY FOLLOWING THE DEC ISION OF ITAT., CHENNAI IN THE CASE OF M/S. SUSI AUTO PLAZA PVT.LT D (2010) 3 ITR CHENNAI 166, WE ARE OF THE CONSIDERED VIEW THAT LEA RNED CIT(A) WAS RIGHT IN DELETING ADDITIONS MADE TOWARDS AD-HOC DISALLOWANCE OF VARIOUS EXPENSES, HENCE WE ARE INCLINED TO UPHOL D FINDINGS OF LEARNED CIT(A) AND REJECT GROUND TAKEN BY REVENUE. 11. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM REVENUE APPEAL IS ADDITION OF RS.5 CRORES MADE U/S. 40A(3) OF THE ACT FOR CASH PAYMENT MADE TO M/S. KOKILAM FOUNDATIO NS PVT.LTD. THE FACTS WITH REGARD TO IMPUGNED DISPUTE ARE THAT DURING THE YEAR ASSESSEE HAS ENTERED INTO JOINT VENTURE WITH M/S. K OKILAM FOUNDATIONS PVT.LTD. FOR JOINTLY INVESTING IN LA ND ADMEASURING 25 ACRES AT PARIVAKKAM VILLAGE, POONAMALLEE TALUK, THI RUVALLUR DISTRICT . AS PER MOU BETWEEN THE PARTIES, ASSESSEE HAS PAID A SUM OF ` 10.00 CRORES AS HIS INVESTMENT IN JOINT VENTURE PROJECT. OUT OF TOTAL PAYMENT OF ` 10.00 CRORES, ASSESSEE HAS PAID A SUM 13 ITA NO. 1765/CHNY/2017 OF ` 5.00 CRORES IN CASH. THE ASSESSING OFFICER HAS DIS ALLOWED CASH PAYMENT OF ` 5.00 CRORES U/S.40A(3) OF THE ACT, ON THE GROUND THAT AMOUNT PAID TO M/S. KOKILAM FOUNDATION S PVT. LTD. IS REVENUE EXPENDITURE, WHICH IS HIT BY THE PROVISIONS OF SECTION 40A(3) OF THE ACT. THE ASSESSING OFFICER WAS FURT HER OF THE OPINION THAT ASSESSEE HAS SHOWN INVESTMENTS MADE IN JOINT VENTURE WITH M/S.KOKILAM FOUNDATIONS PVT.LTD AS ST OCK-IN-TRADE IN HIS BOOKS OF ACCOUNT WHICH CLEARLY INDICATE NATURE OF TRANSACTIONS BETWEEN THE PARTIES, AS REVENUE IN NATURE. 12. THE LEARNED DR SUBMITTED THAT LEARNED CIT(A) HA S ERRED IN DELETING ADDITION OF RS.5.00 CRORES MADE U/S.40 A(3) OF THE ACT, WITHOUT APPRECIATING THE FACT THAT ORIGINAL MOU SIG NED ON 29.08.2007 AND SUPPLEMENTARY AGREEMENT BETWEEN THE PARTIES ON 27.02.2013 WAS TWO SEPARATE DOCUMENTS AND AS PER SUPPLEMENTARY AGREEMENT, ASSESSEE HAS CHANGED NATUR E OF TRANSACTION INTO INVESTMENTS TO AVOID PROVISIONS OF SECTION 40A(3), WHICH CAN BE AT BEST SAID AN AFTERTHOUGHT, BUT NOT A DOCUMENT, WHICH PROVES LEGITIMACY OF THE ASSESSEE. THE LEARN ED DR FURTHER SUBMITTED THAT AS PER FINANCIAL STATEMENT FILED AL ONG WITH RETURN OF INCOME, ASSESSEE HAS SHOWN INVESTMENTS MADE WITH J OINT VENTURE 14 ITA NO. 1765/CHNY/2017 AS PURCHASE OF LAND AND STOCK-IN-TRADE WHICH ITSELF SUFFICIENT TO HOLD THAT TRANSACTIONS BETWEEN THE PARTIES ARE IN T HE NATURE OF PURCHASE OF LANDS AND AS SUCH ANY CASH PAYMENTS MAD E FOR REVENUE EXPENDITURE WAS HIT BY PROVISIONS OF SECTI ON 40A(3) OF THE ACT. THE LEARNED CIT(A) WITHOUT APPRECIATING AB OVE FACTS HAS SIMPLY DELETED ADDITIONS MADE BY ASSESSING OFFICER BY CONSIDERING SUPPLEMENTARY AGREEMENT FILED BY ASSESSEE, WHICH IS MUCH AFTER THE DATE OF SEARCH. 13. THE LEARNED AR FOR THE ASSESSEE, ON THE OTHER H AND, SUPPORTING ORDER OF LEARNED CIT(A) SUBMITTED THAT A SSESSEE HAS FILED NECESSARY EVIDENCES BEFORE LEARNED CIT(A) TO PROVE THAT ENTRIES IN BOOKS OF ACCOUNT WAS AN INADVERTENT ERR OR COMMITTED BY ACCOUNTANT AND WHICH IS NOT DETRIMENTAL TO DECIDE THE NATURE OF TRANSACTION AND WHAT IS RELEVANT IS TRUE NATURE OF TRANSACTION AS PER EVIDENCES PLACED BEFORE AUTHORITIES. IN THIS CASE, MOU AND SUPPLEMENTARY AGREEMENT BETWEEN THE PARTIES CLEARLY INDICATE THAT AMOUNT PAID TO M/S.KOKILAM FOUNDATIONS PVT. LTD. IS INVESTMENT IN JOINT VENTURE WITH ASSURED RATE OF RETURN, WHICH CA NNOT BE CONSIDERED AS PURCHASE AND SALE OF LANDS MERELY FOR THE REASON ASSESSEE BY MISTAKE HAS SHOWN SAID TRANSACTION AS S TOCK-IN-TRADE 15 ITA NO. 1765/CHNY/2017 IN HIS BOOKS OF ACCOUNT. THE LEARNED CIT(A), AFTER CONSIDERING RELEVANT FACTS HAS RIGHTLY DELETED ADDITIONS MADE TOWARDS CASH PAYMENT U/S. 40A(3) OF THE ACT AND HIS ORDER SHOUL D BE UPHELD. 14. WE HAVE HEARD BOTH PARTIES, PERUSED MATERIAL AV AILABLE ON RECORD AND GONE THROUGH ORDERS OF AUTHORITIES BE LOW. THE FACTS BORNE OUT FROM RECORDS CLEARLY INDICATE THAT ASSES SEE HAS ENTERED INTO JOINT VENTURE WITH M/S.KOKILAM FOUNDATIONS PVT. LTD FOR DEVELOPMENT OF 25 ACRES OF LAND AT PARIVAKKAM VIL LAGE, POONAMALLEE TALUK. THIRUVALLUR DISTRICT. AS PER TER MS OF MOU BETWEEN THE PARTIES ASSESSEE AND M/S.KOKILAM FOUN DATIONS PVT. LTD., AGREED TO JOINTLY PROCURE 25 ACRES OF LAND FROM VARIOUS PARTIES FOR WHICH ASSESSEE IS REQUIRED TO INVEST AN AMOUNT OF ` 10.00 CRORES . THE AGREEMENT FURTHER PROVIDES FO R A CONDITION THAT M/S.KOKILAM FOUNDATIONS PVT. LTD., AGREED TO DEPOSIT ENTIRE TITLE DEEDS OF M/S. MERCURY FOUNDATION WITH THE ASSESSEE AS A COLLATERAL OR GUARANTEE FOR INVESTMENT. FURTHER, M/ S.KOKILAM FOUNDATIONS PVT. LTD., ASSUMED TOTAL RESPONSIBILIT Y OF PROCUREMENT OF LAND AND HAS ALSO INDEMNIFY THE ASSESSEE WITH RE TURN OF CAPITAL AND INTEREST AT THE PREVAILING RATE . AN ANALYSI S OF ABOVE 16 ITA NO. 1765/CHNY/2017 AGREEMENT BETWEEN THE PARTIES CLEARLY SHOWS TH AT ASSESSEE HAS INVESTED IN JOINT VENTURE WITH M/S. KOKILAM FOUNDATIONS PVT. LTD., FOR PROCUREMENT OF LAND AND SUCH LANDS WE RE AGREED TO PROCURE IN THE NAME OF M/S.KOKILAM FOUNDATIONS PV T. LTD. THEREFORE, FROM THE ABOVE IT IS VERY CLEAR THAT PAY MENT TO M/S.KOKILAM FOUNDATIONS PVT. LTD. IS AN INVESTMENT IN JOINT VENTURE AND WHICH CANNOT AT NO STRETCH OF IMAG INATION BE CONSIDERED AS PAYMENT MADE FOR PURCHASE OF LAND I N THE HANDS OF ASSESSEE. 15. FURTHER, THE SUPPLEMENTARY AGREEMENT DATED 27. 02.2013 BETWEEN THE PARTIES CLEARLY INDICATE THAT ASSESSEE WAS TO BE COMPENSATED WITH ADDITIONAL PAYMENT OF ` 10.00 CRORES OVER AND ABOVE THE INVESTMENT OF ` 10.00 CRORES. THE SAID AGREEMENT FURTHER STATES THAT OUT OF ` 8.5 CRORES REPAID BY M/S.KOKILAM FOUNDATIONS PVT. LTD., A SUM OF ` 4.25 CRORES IS PROFIT ELEMENT AND ACCORDINGLY, ASSESSEE HAS ADMITTED PROFIT AS INCOME FROM INVESTMENTS FOR ASSESSMENT YEAR 2009-10. FROM OVER ALL READING OF AGREEMENT BETWEEN PARTIES, IT IS VERY CLEAR T HAT TRANSACTIONS BETWEEN THE ASSESSEE AND M/S.KOKILAM FOUNDATIONS PVT. LTD. IS ONLY INVESTMENT IN JOINT VENTURE WHICH CANNOT BE CONSIDERED AS 17 ITA NO. 1765/CHNY/2017 PAYMENT FOR PURCHASE OF LAND. FURTHER, IN ORDER T O TREAT PURCHASE OF LAND AS STOCK IN TRADE, THE ASSESSEE MUST BE OW NER OF LANDS AND LAND SHOULD BE REGISTERED IN THE NAME OF THE ASSESSEE . HOWEVER, IN THIS CASE ASSESSING OFFICER HAS FAILE D TO BRING ON RECORD ANY EVIDENCE TO PROVE THAT LANDS HAVE BE EN REGISTERED IN THE NAME OF ASSESSEE. IN FACT, ASSESSEE HAS CLEAR LY PROVED THAT LANDS WERE NEVER PURCHASED IN THE NAME OF ASSESSE E . NO DOUBT, ASSESSEE HAS ORIGINALLY TREATED PAYMENT MADE TO M/S.KOKILAM FOUNDATIONS PVT. LTD., AS STOCK-IN-TRADE IN HIS BOO KS OF ACCOUNT. BUT, AT THE TIME OF ASSESSMENT, ASSESSEE HAS FILED REVISED PROFIT AND LOSS ACCOUNT EXCLUDING TRANSACTIONS AND STA TED THAT BY INADVERTENT ERROR COMMITTED BY ACCOUNTANT, THE T RANSACTION REGARDED AS PURCHASE OF LAND AND STOCK-IN-TRA DE IN BOOKS OF ACCOUNT. HOWEVER, REAL NATURE OF TRANSACTION BETWE EN THE PARTIES WAS ONLY INVESTMENT WHICH WAS SUPPORTED BY NECESS ARY MOU BETWEEN THE PARTIES. THEREFORE, WHEN EVIDENCES CL EARLY INDICATE NATURE OF TRANSACTION AS ONLY AN INVESTMENT IN JO INT VENTURE, MERELY FOR THE REASON THAT ASSESSEE HAS SHOWN SAID TRANSACTION AS PURCHASE OF LAND AND STOCK-IN-TRADE IN HIS B OOKS OF ACCOUNT, THE SAME CANNOT BE REGARDED AS PURCHASE AND S TOCK-IN-TRADE, 18 ITA NO. 1765/CHNY/2017 UNLESS THE REVENUE BRINGS ON RECORD FURTHER EVI DENCES TO PROVE THAT ASSESSEE HAS IN FACT, PURCHASED LANDS IN HI S NAME AND SHOWN AS STOCK-IN-TRADE. FURTHER, IT IS WELL SETTL ED PRINCIPLE OF LAW THAT ENTRIES IN BOOKS OF ACCOUNT IS NOT DETERMINA TIVE TO DECIDE NATURE OF TRANSACTION, BUT WHAT IS RELEVANT IS TH E CORRECT NATURE OF TRANSACTIONS WHICH IS BACKED BY EVIDENCES. IN THIS CASE, EVIDENCE IN THE FORM OF MOU BETWEEN THE PARTIES AND SUB SEQUENT SUPPLEMENTARY AGREEMENT CLEARLY INDICATE THE NATUR E OF TRANSACTION AND AS PER WHICH AMOUNT PAID TO M/S.K OKILAM FOUNDATIONS PVT. LTD., IS ONLY AN INVESTMENT IN JOI NT VENTURE AND HENCE, JUST BECAUSE ASSESSEE HAS SHOWN SAID TRANSA CTION AS STOCK-IN-TRADE, IT CANNOT BE CONSIDERED AS REVENUE IN NATURE TO INVOKE THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 16. THE PROVISIONS OF SECTION 40A(3) OF THE ACT, W OULD COME INTO OPERATION, IF AN ASSESSEE MAKES CASH PAYME NT IN EXCESS OF PRESCRIBED LIMIT FOR ANY EXPENDITURE. IN CASE, ANY CASH PAYMENT FOR PURCHASE OF CAPITAL ASSET OR INVEST MENT , THE SAME CANNOT BE BRING INTO THE AMBIT OF PROVISIONS OF SECTION 40A(3) OF THE ACT. IN THIS CASE, NATURE OF PAYMENT BETWEE N PARTIES ON THE 19 ITA NO. 1765/CHNY/2017 BASIS OF MOU AND SUPPLEMENTARY AGREEMENT CLEARLY I NDICATE THAT IT WAS AN INVESTMENT IN JOINT VENTURE, WHICH IS IN THE NATURE OF CAPITAL ACCOUNT TRANSACTION. THEREFORE, THE SAME CANNOT HIT BY PROVISIONS OF SECTION 40A(3) OF THE ACT. WE FURTHE R NOTED THAT WHEN PAYMENT MADE FOR ANY PURPOSE OTHER THAN FO R THE PURPOSE OF EXPENDITURE AND WHICH IS NOT DEBITED OR ROUTE D THROUGH PROFIT & LOSS ACCOUNT , THEN IT IS OUTSIDE THE PURVIEW O F SECTION 40A(3) OF THE ACT, THIS VIEW IS SUPPORTED BY HONBLE JU RISDICTIONAL HIGH COURT OF MADRAS IN THE CASE OF K.R.GANESH KUMAR V S. ACIT IN TAX APPEAL NO.2408 OF 2006, WHERE IT WAS HELD TH AT WHEN PAYMENT IS MADE FOR ANY EXPENDITURE WHICH IS NOT ROUTED THROUGH PROFIT & LOSS ACCOUNT, THEN THE SAME CANNOT BE B ROUGHT WITHIN THE AMBIT OF SECTION 40A(3) OF THE ACT. 17. CONSIDERING FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE CONSIDERED VIEW THAT TRANSACTIONS OF INVES TMENT IN JOINT VENTURE CANNOT BE BROUGHT INTO AMBIT OF PROVISIONS OF SECTION 40A(3) OF THE ACT. THE LEARNED CIT(A), AFTER CONSID ERING RELEVANT FACTS AND BY FOLLOWING DECISION OF ITAT., CHENNA I IN THE CASE OF M/S. R.K.POWERGEN PVT.LTD.(SUPRA) HAS RIGHTLY DELET ED ADDITIONS 20 ITA NO. 1765/CHNY/2017 MADE BY ASSESSING OFFICER TOWARDS DISALLOWANCE OF CASH PAYMENT U/S. 40A(3) OF THE ACT. WE DO NOT FIND AN Y ERROR OR INFIRMITY IN THE ORDER OF LEARNED CIT(A) AND HEN CE, WE ARE INCLINED TO UPHOLD THE FINDINGS RECORDED BY LEA RNED CIT(A) AND REJECT GROUND TAKEN BY REVENUE. 18. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERAT ION FROM GROUND NO.4 OF REVENUE APPEAL IS DELETION OF ADDIT ION OF ` 58,97,318/- MADE BY ASSESSING OFFICER TOWARDS PRO FIT AND GAINS FROM BUSINESS OR PROFESSION. THE FACTS WITH REGARD TO IMPUGNED DISPUTE ARE THAT ASSESSEE HAS DECLARED PROFITS FROM BUSINESS OR PROFESSION AMOUNTING TO ` 24,40,011/-. FURTHER, AT THE TIME OF ASSESSMENT PROCEEDINGS, HE HAS FILE D REVISED STATEMENT OF PROFIT & LOSS ACCOUNT AND DECLARED LOSS OF ` 34,57,307/- BY EXCLUDING PURCHASE OF LAND AND S TOCK IN TRADE FROM BOOKS OF ACCOUNT WHICH RESULTED IN REDUCTION OF NET PROFIT INTO NET LOSS. THE ASSESSING OFFICER HAS REJECTED REVISED STATEMENT OF TOTAL INCOME FILED BY ASSESSEE . HO WEVER, THE LEARNED CIT(A) HAS ACCEPTED REVISED STATEMENT O F TOTAL INCOME 21 ITA NO. 1765/CHNY/2017 AND DIRECTED THE ASSESSING OFFICER TO CONSIDER NE T LOSS AS PER REVISED PROFIT & LOSS ACCOUNT PREPARED BY THE ASSES SEE. 19. THE LEARNED DR SUBMITTED THAT LEARNED CIT(A) HA S ERRED IN DELETING ADDITIONS MADE TOWARDS PROFITS & GAI NS FROM BUSINESS OR PROFESSION WITHOUT APPRECIATING THE FACT THAT L ETTER DATED 25.03.2014 CLAIMED TO HAVE FILED BY ASSESSEE BEFO RE THE ASSESSING OFFICER WAS NOT ON RECORD BECAUSE ASSE SSEE HAS FAILED TO FILE ANY PHOTOCOPY OF THE DULY ACKNOWLED GED LETTER FROM THE ASSESSING OFFICER . THE DR FURTHER SUBMITTED THAT LEARNED CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT LETTE R DATED 25.03.2014 MAY NOT BE FILED BEFORE ASSESSING OF FICER BECAUSE ASSESSING OFFICER HAS PASSED ASSESSMENT ORDER ON 25.03.2014 AND HENCE, IT CANNOT BE SAID THAT ASSESSEE HAS FI LED LETTER WITH REVISED PROFIT & LOSS ACCOUNT. THE DR FURTHER SUB MITTED THAT EVEN ASSUMING FOR A MOMENT, ASSESSEE HAS FILED LETTER A LONG WITH REVISED STATEMENT OF TOTAL INCOME, BUT ASSESSING OFFICER HAS PRECLUDED FROM ADMITTING REVISED TOTAL INCOME, UN LESS SUCH REVISION IS MADE BY FILING REVISED RETURN OF INCO ME AS HELD BY 22 ITA NO. 1765/CHNY/2017 HONBLE SUPREME COURT IN THE CASE OF M/S GOETZ (IND IA) LTD. VS. CIT REPORTED IN 284 ITR 323. 20. THE LEARNED A.R., ON THE OTHER HAND, SUBMITTE D THAT ASSESSEE HAS FILED REVISED STATEMENT OF TOTAL I NCOME BEFORE ASSESSING OFFICER BY FILING LETTER DATED 25.03.20 14 AND EVIDENCE FOR FILING LETTER HAS BEEN PLACED BEFORE LEARNED CIT(A). THE LEARNED CIT(A) AFTER CONSIDERING RELEVANT FACTS H AS RIGHTLY DELETED ADDITIONS MADE BY ASSESSING OFFICER TOW ARDS PROFITS AND GAINS FROM BUSINESS OR PROFESSION AND HENCE, HIS FINDINGS SHOULD BE AFFIRMED. 21. WE HAVE HEARD BOTH PARTIES, PERUSED MATERIAL AV AILABLE ON RECORD AND GONE THROUGH ORDERS OF AUTHORITIES BE LOW. AS REGARDS FIRST OBJECTION OF THE REVENUE WITH REG ARD TO ADMISSION OF REVISED STATEMENT OF TOTAL INCOME IN ABSENCE OF REVISED RETURN, WE FIND THAT RESTRICTION IMPOSED BY HONB LE SUPREME COURT IN THE CASE OF M/S GOETZ (INDIA) LTD. VS. CIT (SUPRA) IS ONLY ON THE ASSESSING OFFICER BUT NOT ON THE APPELL ATE AUTHORITIES . FURTHER, APPELLATE AUTHORITIES ARE EMPOWERED TO AD MIT ANY ADDITIONAL CLAIM OR GROUND, EVEN IF, SUCH CLAIM WA S NOT BEFORE 23 ITA NO. 1765/CHNY/2017 ASSESSING OFFICER, BUT FACT RELATING TO SUCH CLAIM SHOULD BE ON RECORD. IN THIS CASE, FACTS WITH REGARD TO CLAIM OF LOSS FROM BUSINESS OR PROFESSION WAS ALREADY ON RECORD AND NO NEW FACTS ARE REQUIRED TO BE VERIFIED AND HENCE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO MERIT IN THE GROUND TAKEN BY REVENUE IN LIGHT OF HONBLE SUPREME COURT JUDGEMENT IN TH E CASE OF M/S GOETZ (INDIA) LTD. VS. CIT (SUPRA) AND HENCE, THE SAME IS REJECTED. 22. AS REGARDS DECLARATION OF LOSS FROM BUSINESS OR PROFESSION AS AGAINST PROFIT IN THE ORIGINAL RETUR N FILED FOR RELEVANT ASSESSMENT YEAR, WE FIND THAT LEARNED CIT(A) HAS RE CORDED CATEGORICAL FINDING IN LIGHT OF REVISED PROFIT & LOSS ACCOUNT FILED BY ASSESSEE THAT AFTER EXCLUSION OF PURCHASE OF LAND AND STOCK IN TRADE FROM BOOKS OF ACCOUNT, THE NET PROFIT FROM BUSINESS OR PROFESSION RESULTED INTO NET LOSS. THE FACTS OF FIN DING RECORDED BY LEARNED CIT(A) HAS NOT BEEN CONTROVERTED BY REVENUE WITH ANY EVIDENCES. ON THE OTHER HAND, ASSESSEE HAS FILED NE CESSARY EVIDENCES TO PROVE THAT TRANSACTIONS BETWEEN THE ASSESSEE AND M/S. KOKILAM FOUNDATIONS PVT. LTD. WAS AN INVESTMEN T TRANSACTION 24 ITA NO. 1765/CHNY/2017 WHICH HAS BEEN REGARDED AS PURCHASE OF LAND AND ST OCK IN TRADE BY INADVERTENT ERROR AND THE SAME HAS BEEN RECT IFIED BY PASSING NECESSARY ENTRIES IN BOOKS OF ACCOUNT. THE LEARNED CIT(A) AFTER CONSIDERING RELEVANT FACTS HAS RIGHTLY DIRECTED TH E ASSESSING OFFICER TO CONSIDER REVISED STATEMENT OF TOTAL INC OME FILED BY ASSESSEE. WE DO NOT FIND ANY ERROR OR INFIRMITY I N THE FINDINGS RECORDED BY LEARNED CIT(A) AND HENCE, WE ARE INCLI NED TO UPHOLD THE FINDINGS OF LEARNED CIT(A) AND REJECT GROUND TAKEN BY REVENUE. 23. IN THE RESULT, APPEAL FILED BY REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2021 SD/- SD/- ( . ) ( . ) (V.DURGA RAO) ( G.MANJUNATHA ) ' $ / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER ' /CHENNAI, ' /DATED 20 TH JANUARY, 2021 DS )* +* /COPY TO: 1. APPELLANT 2. RESPONDENT 3. , () /CIT(A) 4. , /CIT 5. * 1 /DR 6. /GF .