2019 (12) TMI 1237 - AT - Income Tax

Addition being the difference in the amount surrendered during the survey and the income offered for tax while filing the return of income - survey action u/s 133A - HELD THAT - Addition of ₹ 3,78,150/- in respect of the difference in the amount surrendered during the course of survey and income offered for filing of return of income. As gone through the evidence filed by the assessee. The amount was retracted even filing of the return of income. In respect of amount of ₹ 1,58,600/-, the assessee has demonstrated that the amount was given during the assessment year 2003-04. Therefore, the amount was required to be added in that year. The assessing officer is directed accordingly. Regarding the amount of ₹ 1,19,550/-, it is stated that the amount outstanding was received back before the date of survey. In support of this, the assessee has drawn my attention to the written submissions. However, no supporting evidence has been filed. Therefore, I sustain this addition. Regarding amount of ₹ 1 lakh, it is stated that the Ld. CIT(A) has wrongly confirmed the addition of ₹ 2 lakhs. In fact, the land was jointly owned by two persons, therefore, the addition should have been restricted to ₹ 1 lakh. As perused the agreement. As per this agreement, the land is jointly owned. Therefore, the assessing officer should have made addition of ₹ 1 lakh only. I find merit into the contention of the assessee. Therefore, the A.O. is directed to delete this addition. Ground No.1 is partly allowed. Addition u/s 68 - entire amount of cheques/cash deposited by the appellant in current account with bank - HELD THAT - As stated that detailed explanation was submitted along with the documentary evidences for each and every credit entry. It is submitted that a sum of ₹ 6,56,500/- was deposited by way of cheques. The narration of such deposits is given in respect of the cash deposit. It is stated that ₹ 46,500/- was surrendered during the survey and deposit of ₹ 2 lakhs was out of the cash surrendered during the survey. Further, it is contended that a sum of ₹ 75,000/-, ₹ 1 lakh and ₹ 35,000/- were realised from the debtors. So far the cheque deposit in bank account, the assessee has given supporting evidences, therefore, the A.O. is directed to delete this addition. However, in respect of the cash deposit of ₹ 6.66 lakhs, it is stated that ₹ 4,46,500/- is out of voluntary surrender made by the assessee during the course of survey. Hence, the A.O. is directed to delete this addition. In respect of the remaining amount of ₹ 2,10,000/-, it is stated to have been received from the realisation of sale proceeds. The assessee has not filed any confirmation from the debtors. Hence, the addition of ₹ 2,10,000/- is sustained. This ground of assessee s appeal is partly allowed. Addition being the amount of credit entries during the whole year in savings bank account of the wife of the assessee - HELD THAT - Amount of credit entries during the whole year in the savings bank account of wife of the assessee Smt. Jyotibala Jain, who is assessed to tax and the amount was properly reflected in the books of accounts has been added. In support of this, the assessee has filed her return of income of the current and earlier years were filed and as per the balance sheet, as on 31.3.2005 31.3.2004, accumulated capital was ₹ 3,40,578/- and ₹ 4,08,721/-. Looking to the evidences submitted and more particularly, the amount which has been credited in the account of the wife of the assessee who herself is assessed to tax, it is also informed that no action has been taken in her hands. I therefore, under these facts cannot sustain these additions.

Summary

Issues Involved:
1. Addition of surrendered amount during survey and income offered for tax.
2. Addition related to purchase of agricultural land.
3. Addition of cheques/cash deposited in the bank account.
4. Addition of credit entries in wife's savings bank account.

Issue 1: Addition of Surrendered Amount During Survey and Income Offered for Tax:
The appeal contested the addition of ?3,78,150 due to the variance between the amount surrendered during the survey and the income declared for tax purposes. The appellant argued that the retraction of ?3,78,150 was supported by a valid explanation and should not have been confirmed. The Tribunal found merit in the appellant's contentions. It directed the assessing officer to consider the amount of ?1,58,600 as related to the previous financial year and to restrict the addition to ?1 lakh for the joint ownership of the land, leading to a partial allowance of this ground.

Issue 2: Addition Related to Purchase of Agricultural Land:
The appellant challenged the addition of ?2 lakhs related to the purchase of agricultural land, asserting that only ?1 lakh should have been considered as their share according to the agreement. The Tribunal, after reviewing the agreement, agreed with the appellant's argument and directed the deletion of the addition, thereby allowing this ground of appeal.

Issue 3: Addition of Cheques/Cash Deposited in the Bank Account:
The appeal contested the addition of ?13,27,300 representing cheques/cash deposited in the appellant's bank account. The Tribunal examined the evidence provided by the appellant, distinguishing between cheque and cash deposits. It directed the assessing officer to delete the addition related to cheque deposits but sustained the addition of ?2,10,000 due to lack of confirmation from debtors, resulting in a partial allowance of this ground.

Issue 4: Addition of Credit Entries in Wife's Savings Bank Account:
The appellant disputed the addition of ?6,21,591 concerning credit entries in the wife's savings bank account, arguing that the amount was properly reflected in her books and should not have been added. The Tribunal, after reviewing the evidence and submissions, directed the assessing officer to delete this addition, thereby allowing this ground of appeal.

In conclusion, the Tribunal partially allowed the appellant's appeal, providing detailed analysis and directions on each issue raised, leading to modifications in the additions made by the authorities in the assessment for the year 2004-05.