2019 (12) TMI 304 - AT - Income Tax

Survey - Discrepancy with respect to excess stock - excess cash - HELD THAT - Ld.CIT(A) has noted that there was no retraction of additional income by the assessee nor any material has been placed by assessee to show that the additional income was admitted by coercion or undue pressure. He has thus concluded that non-declaration of admitted income was a well planned devise to frustrate the efforts of the Department to unearth unaccounted income. These findings of Ld.CIT(A) has not been controverted by assessee. There are no no reason to interfere with the order of Ld.CIT(A) as far as addition of Rs. 5 lac is concerned - With respect to addition of Rs. 1, 20, 000/- on account of low house hold expenses once the addition of Rs. 5 lakhs has been made in the present case it would take care of the addition of low household expenses of Rs. 1, 20, 000/- and in such a situation separate addition on account of low household expenses is not called for and therefore it s directed to delete the addition of Rs. 1, 20, 000/-. The appeal of the assessee is partly allowed.

Summary

Issues involved:
1. Addition of declared income during survey in the return of income.
2. Estimation of household expenses without proper evidence.

Analysis:
1. The appeal dealt with the addition of declared income during a survey in the return of income for A.Y. 2013-14. The assessee, engaged in dealing with Electrical goods, had voluntarily agreed to declare an additional income of Rs. 5 lakhs during a survey conducted by the Department. However, the Assessing Officer (AO) noted that the assessee did not include this additional income in the return of income filed subsequently. The AO made the addition of Rs. 5 lakhs, stating that the admission of additional income was voluntary and not under any undue influence. The Commissioner of Income Tax (Appeals) upheld this addition. The Tribunal, after considering the submissions, found that the non-declaration of admitted income was a deliberate attempt to evade taxes. Therefore, the Tribunal upheld the addition of Rs. 5 lakhs as justified, citing that the admission was not retracted by the assessee and was not coerced.

2. The second issue addressed the estimation of household expenses without proper evidence. The AO also made an additional addition of Rs. 1,20,000 towards household expenses, citing the lack of capital account and family details provided by the assessee. The Tribunal, however, found that since the addition of Rs. 5 lakhs had already been made, it would cover the estimated household expenses as well. Therefore, the Tribunal directed the deletion of the additional Rs. 1,20,000 on account of low household expenses. The Tribunal concluded that once the substantial addition of Rs. 5 lakhs was upheld, making a separate addition for household expenses was unnecessary. As a result, the appeal of the assessee was partly allowed, with the deletion of the additional Rs. 1,20,000.

In summary, the Tribunal upheld the addition of Rs. 5 lakhs declared during the survey in the return of income, citing deliberate non-disclosure by the assessee. However, the Tribunal found the additional estimation of household expenses unjustified, as the substantial addition of Rs. 5 lakhs would cover such expenses. Therefore, the appeal was partly allowed, and the additional amount towards household expenses was deleted.