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2016 (4) TMI 574 - AT - Income TaxAddition on account of alleged statement recorded at the time of survey - Addition on unexplained purchases - Held that - Find merit in the contentions of the ld. DR and find that these deliberate lapses are attributable to assessee due to distortion of facts as he failed to intimate the adverse order for the assessment year 2003-04 to successor CIT(A). Such non-disclosure may have been one of the reason for the successor CIT(A) to delete the additions. Similarly nonfiling of appeal by the Department being attributable to low tax effect cannot be held as a finality of the merits of the case. In view thereof, I find no infirmity in the order of the ld. CIT(A) in dismissing the appeal of the assessee.
Issues Involved:
1. Addition of income based on statement recorded during survey under section 133A of the Income Tax Act, 1961. 2. Confirmation of unexplained purchases and addition under section 69C of the Income Tax Act. Analysis: Issue 1: The appellant contested the addition of Rs. 3.00 lacs to their income based on a statement recorded during a survey under section 133A of the Income Tax Act. The appellant argued that the assessing officer (AO) did not consider the totality of facts presented. The appellant had admitted to offering additional income for taxation in subsequent years, but the AO added the surrendered income as well as the book income. The appellant highlighted that similar additions in other assessment years were later deleted by the Commissioner of Income Tax (Appeals) (CIT(A)), indicating inconsistency in treatment. However, the Department argued that the appellant's voluntary admission of income in one year did not justify the deletion of additions in another year. The Income Tax Appellate Tribunal (ITAT) found merit in the Department's arguments, attributing the lapses to the appellant's failure to disclose relevant facts to the CIT(A). The ITAT upheld the CIT(A)'s decision to dismiss the appeal, emphasizing the separate assessment nature of each year. Issue 2: Regarding the confirmation of unexplained purchases and addition under section 69C of the Income Tax Act, the appellant declared an income of Rs. 1,14,913 for the assessment year 2003-04, comprising income from business and additional income from negative cash as per impounded documents. The AO accepted the declared business income but added Rs. 92,300 as unexplained expenditure, working out unexplained purchases of Rs. 17,664. The AO also added Rs. 3.00 lacs based on the surrendered income during the survey. The CIT(A) upheld the AO's decision. The appellant argued that subsequent years' deletions of similar additions by the CIT(A) should apply to this year as well. However, the Department contended that the appellant's voluntary admission of income did not preclude the addition of unexplained purchases. The ITAT agreed with the Department, highlighting the appellant's failure to disclose relevant facts and the separate assessment principle. Consequently, the ITAT dismissed the appeal, affirming the CIT(A)'s decision. In conclusion, the ITAT upheld the CIT(A)'s decision, dismissing the appellant's appeal against the additions to income and unexplained purchases. The judgment emphasized the importance of disclosing all relevant facts and reiterated the separate assessment nature of each tax year.
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