2015 (10) TMI 1512 - AT - Income Tax

Determination of Income from profession - Held that - It is an undisputed position that certain registers incorporating month-wise professional receipts and expenses in cash and cheques along with month-wise profit were impounded during the course of survey. Such registers pertained to various years. In so far as the assessment year under consideration is concerned, total income was computed by the AO from such registers to the tune of ₹ 54.00 lac. In the absence of any worthwhile objection from the AO during the remand proceedings, the ld. CIT(A) accepted the assessee s working of month-wise profit from such register at ₹ 40.17 lac for the year in question. The ld. DR could not point out any discrepancy in such working of net profit submitted by the assessee with any cogent material. When the position is such, we fail to appreciate as to how a different view can be taken from the one canvassed by the ld. CIT(A). It is palpable that when the assessee pointed out mistakes to the AO in his calculation of professional receipts and expenses for the year in question but the AO chose not to adversely comment the same, the natural presumption is that the assessee s calculation was correct. Under these circumstances, we are of the considered opinion that the ld. CIT(A) was justified in sustaining the addition at ₹ 40,17,517/-. We are unable to comprehend the rationale behind the assessee s assailing the addition to the extent sustained in the first appeal, because the same is based only on the working of net professional receipts submitted by the assessee himself. We, therefore, dismiss these two grounds taken by the Revenue and the challenge made by the assessee to the sustenance of this addition in his ground of appeal. - Decided in favour of assessee. Addition of income from undisclosed sources - CIT(A) deleted part addition - Held that - Assessee categorically stated before the AO that certain deposits in saving bank account no. 702611 maintained with ABN Amro Bank, were transfer entries from one account to another. Even entry-wise details were also furnished which the AO refused to accept for want of any further corroboration. When the current account and savings bank account were available with him, the AO was obliged to cross check the entries. The ld. CIT(A) has examined this aspect and found the assessee s contention correct. The ld. DR failed to controvert the position ascertained by the ld. CIT(A) in this regard. We, therefore, hold that the ld. CIT(A) was justified in reducing the addition to ₹ 2,82,838/-, being the same amount as was offered by the assessee himself. Again, we do not find any logic behind the assessee s contention for allowing further relief because the assessee himself admitted undisclosed income from this bank account amounting to ₹ 2,82,838/-. We, therefore, countenance the view taken by the ld. CIT(A) on this score. - Decide against assessee. Addition on bank interest - CIT(A) deleted the addition - Held that - it is noticed that bank interest of ₹ 15,490/- emanating from the savings bank account which was not disclosed by the assessee and other credit entries in this bank account, except the transfer entries, have been separately added, for which we have sustained an addition of ₹ 2,82,838/-. Since the bank interest of ₹ 15,490/- is part of such addition sustained in the first appeal, any further addition for the bank interest would amount to double taxation of same income. We, therefore, approve the view taken by the ld. CIT(A) in deleting this addition. - Decided in favour of assessee.

Issues Involved:
1. Reduction of 'Income from profession' from Rs. 54,00,899 to Rs. 40,17,517.
2. Restriction of addition of income from undisclosed sources from Rs. 4,99,266 to Rs. 2,82,838.
3. Deletion of addition of Rs. 15,490 as bank interest.
4. Re-opening of assessment.

Detailed Analysis:

1. Reduction of 'Income from profession':
The Revenue contested the reduction of professional income from Rs. 54,00,899 to Rs. 40,17,517 by the CIT(A). The assessee, an Advocate, had declared only cheque receipts in his original return, omitting cash receipts. A survey under Section 133A of the Income-tax Act, 1961, revealed discrepancies in the professional receipts. The AO calculated the professional income based on impounded registers, determining it at Rs. 54,00,889. The CIT(A) later accepted the assessee's working of month-wise profit from the registers, reducing the income to Rs. 40,17,517. The Tribunal upheld the CIT(A)'s decision, noting the AO's failure to refute the assessee's calculations during remand proceedings.

2. Restriction of addition of income from undisclosed sources:
The AO identified undisclosed deposits totaling Rs. 5,35,560.52 in the assessee's savings bank account, reducing it to Rs. 4,99,266 after excluding certain entries. The assessee admitted to Rs. 2,82,838 as undisclosed income, claiming the remaining were transfers between accounts. The CIT(A) accepted this explanation, reducing the addition to Rs. 2,82,838. The Tribunal upheld this decision, noting the AO's failure to verify the transfer entries and the correctness of the CIT(A)'s findings.

3. Deletion of addition of Rs. 15,490 as bank interest:
The AO included Rs. 15,490 as bank interest in the total income. The CIT(A) deleted this addition, observing that the bank interest was already part of the total credits added from the savings bank account. The Tribunal agreed, noting that including the bank interest separately would result in double taxation.

4. Re-opening of assessment:
The assessee challenged the re-opening of the assessment. However, the assessee's representative did not press this ground of appeal, leading to its dismissal by the Tribunal.

Conclusion:
The Tribunal dismissed both the Revenue's and the assessee's appeals, upholding the CIT(A)'s decisions on all contested issues. The order was pronounced in the open court on 06.10.2015.

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