2015 (3) TMI 561 - AT - Income Tax

Addition on account of unaccounted parking charges received from twin bungalow holder - CIT(A) confirmed addition - Held that - For the year under appeal, the assessee points out that the difference was only in respect of the TB No.14 sold to one Shri P.K. Patil wherein, in the original Annexure A prepared during the course of survey, the undisclosed income was taken at ₹ 3 lakhs whereas on reconciliation it transpires that in fact, the difference was ₹ 75,000/-. Consequently, a sum of ₹ 2,25,000/- was not offered as additional income vis- -vis the said twin bungalows. The additional income was offered by the assessee after the details in respect of the various properties sold by the assessee were tabulated by the survey team on the basis of documents found from the possession of the assessee, which reflected the difference between actual sale consideration and the agreement value. However, by way of retraction statement, the assessee claims that it had verified the impounded documents and papers and no parking charges were received from row houses and twin bungalow holders. The undisclosed and unaccounted income in the hands of the assessee was tabulated by the survey team on the basis of the impounded documents. The claim of the assessee before the survey team was that it had received certain charges against the properties sold by it which were not disclosed in the return of income. Consequently, the tabulation of additional income in the hands of the assessee and basis for such tabulation of such undisclosed income was the documents found from the possession of the assessee. The assessee in first round surrendered income, which was retracted by the assessee by the retraction statement filed before the Assessing Officer, cognizance of which has not been taken either by the Assessing Officer or the CIT(A). The onus is fully upon the assessee to explain with evidence as to the reason why it is retracting from its earlier disclosure of undisclosed income. In the interest of justice, we deem it fit to restore this issue to the file of Assessing Officer for adjudication afresh in accordance with law after allowing reasonable opportunity of hearing to the assessee - Decided in favour of assessee for statistical purposes.

Summary

Issues Involved:
1. Addition of Rs. 2,25,000 for unaccounted parking charges.
2. Liability to pay interest under sections 234B and 234C of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Addition of Rs. 2,25,000 for Unaccounted Parking Charges:

The case revolves around the addition of Rs. 2,25,000 to the assessee's income for the assessment year 2009-10. The assessee, a promoter and builder, was subject to a survey under section 133A of the Income-tax Act on 01.03.2011. During the survey, the assessee admitted to unaccounted income of Rs. 25,75,000 for the relevant year but later filed a revised return declaring Rs. 23,50,000 as additional income, excluding Rs. 2,25,000 allegedly received as parking charges from twin bungalow holders.

The Assessing Officer (AO) noted that no retraction of the Rs. 2,25,000 was communicated to the department and no evidence was provided to support the claim that parking charges were not received from twin bungalow holders. Consequently, the AO added Rs. 2,25,000 to the total income.

The CIT(A) upheld the AO's decision, stating that the assessee failed to provide a proper explanation or evidence supporting the revised amount. The onus was on the assessee to prove that the amount was not received, which was not done.

The assessee argued that no parking charges were received from twin bungalow holders and that a retraction statement was filed on 06.04.2011. The AO, however, did not acknowledge this retraction.

The Tribunal noted that the survey revealed unaccounted cash receipts, which were not reflected in the books of account. The assessee admitted to discrepancies and agreed to additional income during the survey. However, the assessee later retracted part of the admission, claiming no parking charges were received from twin bungalow holders.

The Tribunal found that the assessee did not adequately justify the retraction and failed to provide evidence. Therefore, the Tribunal restored the issue to the AO for fresh adjudication, allowing the assessee an opportunity to present evidence.

2. Liability to Pay Interest Under Sections 234B and 234C:

The second issue concerned the assessee's liability to pay interest under sections 234B and 234C of the Income-tax Act. The assessee denied this liability, but the Tribunal held that the charging of interest is consequential in nature. As a result, the ground of appeal regarding the interest was dismissed.

Conclusion:

The appeal was partly allowed. The issue of the addition of Rs. 2,25,000 was remanded back to the AO for fresh consideration, while the appeal against the interest liability under sections 234B and 234C was dismissed. The Tribunal emphasized the need for the assessee to provide substantial evidence to support any retraction of previously admitted income.