2017 (3) TMI 1373 - AT - Income Tax

Unaccounted sale/receipts added as voluntarily surrendered by the assessee - Held that - This fact has not been controverted by the learned DR that the assessee submitted all the sale bills which were prepared on very next date of survey i.e. 25.2.2010 to ensure that the impugned amount should be included in the trading results/income of the assessee. When the impugned amount which was picked up by the Assessing Officer for making the addition, has been shown as receipt in the accounts of the assessee and such receipts of ₹ 45,18,389/- were actually included in the total turnover shown by the assessee in the books of accounts and the same were also offered to tax then in our opinion the Assessing Officer was not justified in making the addition of the same amount on the ground of retraction by the assessee. Assessing Officer has prompted to make double addition by ignoring the fact that the amounts surrendered during the course of survey have been included by the assessee in the books of accounts and financial results of the assessee which obviously amounts to double addition which is not permitted as per the provisions of the Act. In this situation, the learned CIT(A) was quite correct in deleting the impugned baseless addition and we are not able to see any valid reason to interfere with the order of the learned CIT(A) in this regard and, hence, we uphold the same.- Decided in favour of assessee.

Summary

Issues:
- Addition of unaccounted sale/receipts surrendered during survey
- Retraction of surrendered amount by assessee
- Double taxation claim by assessee
- Validity of Assessing Officer's addition to total income
- Deletion of addition by CIT(A)
- Appeal by Revenue before Tribunal

Analysis:
1. The Revenue appealed against the CIT(A)'s order deleting the addition of ?45,18,389 made by the Assessing Officer based on unaccounted sale/receipts voluntarily surrendered by the assessee during a survey. The Assessing Officer observed that the surrendered amount was undisclosed income as work orders found during the survey were not entered in the books of accounts initially.

2. The CIT(A) deleted the addition, stating that the sales bills were prepared immediately after the survey to ensure inclusion in the income. The CIT(A) found that the receipts were duly considered as income, supported by ledger accounts and vouchers. The CIT(A) concluded that the Assessing Officer's addition was on the wrong footing and amounted to double taxation.

3. The Revenue argued before the Tribunal that the Assessing Officer's addition was justified as the surrendered amount was undisclosed income. The Revenue contended that the CIT(A) erred in deleting the addition and claimed that it was not double taxation.

4. The assessee's counsel emphasized that the surrendered amount was included in the total turnover and offered for tax, preventing double taxation. The counsel provided documents supporting the inclusion of the surrendered amount in the financial records submitted to the Assessing Officer.

5. The Tribunal upheld the CIT(A)'s decision, noting that the surrendered amount was shown in the accounts and turnover of the assessee, precluding double taxation. The Tribunal found the Assessing Officer's addition baseless and upheld the deletion by the CIT(A), dismissing the Revenue's appeal.

6. The Tribunal's decision was based on the fact that the surrendered amount was properly recorded and offered for tax, preventing double taxation. The Tribunal found no reason to interfere with the CIT(A)'s order, ultimately dismissing the Revenue's appeal.

This detailed analysis highlights the key issues, arguments presented, and the Tribunal's decision in the case concerning the addition of unaccounted sale/receipts and the subsequent deletion of the addition by the CIT(A) upheld by the Tribunal.