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2019 (9) TMI 1720 - ITAT CHENNAIAdmission of additional income in search - voluntary disclosures - Additional income admitted by virtue of service tax refund brought to tax u/s 41(1) - service tax refund accrued to the assessee in the assessment year under consideration or not? - HELD THAT:- As during the course of search u/s 132 Department has not impounded any incriminating documents or materials against the assessee. The Director of the assessee company voluntarily admitted additional income that would cover up all issues arising on account of stock, cash in hand, various omissions, commissions, assets, jewellery valuable, documents and on any instances where the search party is not satisfied on the explanations and clarifications given by us on any issues may be on account of large number of whole-sellers, agents, distributors, sub-agents, retailers in their own capacity and enormous volume of transactions, etc. Moreover, it was made it clear before the investigating authorities that the above admission of additional income was declared in good faith with a spirit of cooperation with the department and to buy peace of mind with the clear understanding that no penalty shall also be imposed and no prosecution proceedings will be initiated against any of their group concerns or any of the family members. If the Department is prompted to bring to tax of the Service Tax Refund in view of the decision of the Hon’ble Supreme Court, which was delivered on 24.10.2013, the same should have been taxed in the relevant to the assessment year 2014-15 or it can be taxed as and when the said sum or any part thereof is actually received by way of refund from the concerned authorities. AO has not discussed anything in the assessment order of receipt of service tax refund during the assessment year under consideration - Also service tax refund was not accrued to the assessee in the assessment year under consideration in lieu of the Hon’ble Supreme Court’s decision. The provisions of section 41(1) of the Act warrant taxation of the benefit obtained, whether in cash or in any other manner whatsoever or accrued. By virtue of the judgement of the Hon’ble Supreme Court delivered on 24.10.2013 towards service tax refund, the Assessing Officer cannot held that the benefit of service tax refund accrues to the assessee in the assessment year 2015-16 automatically. Assessee also filed an undertaking before the AO by way of an affidavit that the actual receipt of the service tax refund will be offered to tax, we are of the considered opinion that the Assessing Officer was not factually and legally correct to bring the same to tax in the assessment year in which the assessee has not actually received the refund or accrued. Balance addition towards variation in additional income admitted - assessee has not advanced any argument or the assessee has furnished any material evidence on record. When the assessee was asked to explain with regard to the short fall in income that was admitted under section 132(4) of the Act being ₹.80,53,26,740/-, before the ld. CIT(A), the assessee has explained about service tax refund of ₹.77.80 crores only and no reply was given on the difference amount of ₹.80,53,26,740- ₹.77,80,00,000. Accordingly, the balance addition of ₹.2,73,26,740/- stands confirmed. Appeal filed by the assessee is partly allowed.
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