Indian Kanoon - Search engine for Indian Law

entries of Rs.50,000/- each were kept with Mamaji and Mataji) and the other entry relate to an amount of Rs.1,00,000/- received back by the assessee from Mataji. Therefore, the amount of Rs.1,00,000/- which assessee has given to them was received back. Alternatively, it was argued that if any addition on this account is to be made then assessee is entitled to telescoping against addition made on account of Bogus purchases which is treated as undisclosed income of assessee. It was further submitted that if telescoping of income is not allowed, it will amount to double addition.

18.2. So far as argument of Learned Counsel for the Assessee that telescoping benefit should be given is concerned, the same is acceptable in view of the decision of ITA.Nos.9147 to 9152 & 9448 & 9449/Del./2019 Shri Vishnu Kumar Garg, Faridabad.

the Hon'ble Delhi High Court in the case of CIT vs. Sonal Construction reported in [2013] 359 ITR 532 (Del.) where the Hon'ble High court has accepted the theory of benefit of telescoping. We, therefore, direct the A.O. to allow the benefit of telescoping and deduct the addition of Rs.10,55,000/- from profits from bogus purchases etc. added in the hands of the assessee and his proprietorship concerns and in the case of the 02 companies namely LV Rustore Applications (P) Ltd., and RR Carwell Private Ltd., where he is a Director and is the controlling person. The A.O. shall do the necessary calculation and the ground raised by the assessee on this issue is accordingly partly allowed in terms indicated above.

Hon'ble Allahabad High Court, Civil Court and Judicial Magistrate wherein Shri Abhay Salwan has been declared as a proclaimed person.

21.10. Alternatively and without prejudice to above, the Learned Counsel for the Assessee submitted that if any addition on this account is made, then, the assessee should be entitled to telescoping against addition made of Bogus purchases in the hand of assessee and two companies namely LV Rustore Applications Pvt. Ltd. and R R Carwell Pvt. Ltd. where he is the director and the controlling person as undisclosed income of assessee. He submitted that if telescoping of income is not given than there will be double addition in as much as both the undisclosed income and the investment made out of such income are both brought to tax which was contrary to the basic principles of assessment. Therefore, undisclosed income and the undisclosed investment are to be set off against each other, thus giving benefit of telescoping to the assessee. For the above proposition, the Learned Counsel for the Assessee relied upon the following Judgments :-

60. The Revenue in various grounds of appeal has challenged the order of the Ld. CIT(A) in allowing the telescoping benefit out of the income from bogus purchases and the profit from other entities.

61. After hearing both the side, we do not find any infirmity in the order of the Ld. CIT(A) on this issue. So far as the benefit of telescoping is concerned, we have already allowed the benefit of telescoping by relying on the decision of the Hon'ble Delhi High Court in the case of CIT vs., Sonal Construction [2013] 359 ITR 532 (Del.). Therefore, the grounds raised by the Revenue on this issue are dismissed.