2018 (7) TMI 291 - AT - Income Tax

Admission of additional income u/s 132(4) - assessee surrendered the additional income towards the share of Doctors fee but in the return of income no such amount was separately shown by the assessee - Held that - Since the assessee has admitted the entire receipts upto December 2010 and for the subsequent period and filed the return of income we hold that no separate addition is required to be made in the hands of the assessee on account of Doctors fees. Accordingly we set aside the orders of the lower authorities and delete the addition made by the AO. The appeal of the assessee is allowed on this ground. As evident from the ledger account profit and loss account and the note submitted by the assessee that the assessee had admitted the sum of 16, 82, 445/- towards his share from the SSDH upto December 2010 which was more than the admission made by the assessee u/s 132(4) and also the share of his receipts worked out by the AO. AO has not given a finding that the assessee has received more than 16, 82, 445/- and not admitted by the assessee. Merely because the statement u/s 132(4) was given the addition cannot be made in the hands of the assessee without any supporting evidence. Since the assessee has admitted the entire receipts upto December 2010 and for the subsequent period and filed the return of income we hold that no separate addition is required to be made in the hands of the assessee on account of Doctors fees - addition made by the AO deleted - Decided in favour of assessee.

Issues:
1. Addition of undisclosed income in the hands of the assessee based on incriminating material found during search operations.
2. Discrepancy between the additional income admitted by the assessee and the amount reflected in the return of income.
3. Determination of the share of the assessee from undisclosed receipts of Doctors fees collected by the company.
4. Dispute regarding whether separate addition is required to be made in the hands of the assessee for the undisclosed receipts.

Analysis:

Issue 1:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) regarding the addition of undisclosed income in the hands of the assessee. Search and seizure operations revealed incriminating material indicating suppression of receipts, leading to the assessee admitting additional income of ?10 lakhs under section 132(4) of the Income Tax Act.

Issue 2:
The assessee had admitted ?10 lakhs as additional income in the sworn statement but did not separately show this amount in the return of income. The CIT(A) directed the Assessing Officer to make an addition of ?10 lakhs instead of ?16,51,815, as the amount was not separately shown in the return.

Issue 3:
The share of the assessee from the undisclosed Doctors fees collected by the company was determined to be ?16,51,815. The assessee reconstructed the books of accounts and accounted for the receipts, maintaining that no separate addition was required as the entire receipts were disclosed in the return of income.

Issue 4:
During the appeal hearing, the assessee argued that no separate addition was necessary as the reconstructed books of accounts reflected the entire receipts of the share from the company. The Tribunal held that since the assessee admitted all receipts in the return of income, no separate addition was warranted, overturning the lower authorities' decision to add ?10 lakhs as undisclosed income.

In conclusion, the Tribunal allowed the appeal of the assessee, ruling that no separate addition was required in the hands of the assessee for the undisclosed receipts of Doctors fees, as the entire receipts were disclosed in the return of income after reconstructing the books of accounts.

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