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 ₹ 5 lac is concerned - With respect to addition of ₹ 1,20,000/- on account of low house hold expenses, once the addition of ₹ 5 lakhs has been made in the present case, it would take care of the addition of low household expenses of ₹ 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 ₹ 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 ?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 ?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 ?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 ?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 ?5 lakhs had already been made, it would cover the estimated household expenses as well. Therefore, the Tribunal directed the deletion of the additional ?1,20,000 on account of low household expenses. The Tribunal concluded that once the substantial addition of ?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 ?1,20,000.

In summary, the Tribunal upheld the addition of ?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 ?5 lakhs would cover such expenses. Therefore, the appeal was partly allowed, and the additional amount towards household expenses was deleted.