2022 (7) TMI 394 - AT - Income Tax

Addition based on Statement recorded on oath u/s 132(4) - unaccounted business/stock - HELD THAT - There is no denying of the fact that the documents of unaccounted business were found from the premises of Shri Himanshu Kohli and the entire edifice of assessment is based upon this fact. In one of his replies, the assessee has categorically denied the alleged unaccounted transaction, whereas Shri Himanshu Kohli has categorically admitted the unaccounted transaction. Therefore, presumption of sections 132(4) and 292C of the Act has been substantiated by the admission of Shri Himanshu Kohli. The assessee further submitted that unaccounted stock, which was lying there, has been surrendered as undisclosed income for Assessment Year 2015-16. These factual statements of the assessee have neither been controverted nor demolished by the Assessing Officer by bringing cogent material evidence on record. In our considered opinion, the entire additions made by the Assessing Officer are on the basis of surmises and conjectures devoid of any supporting evidence. Statements referred to and relied upon by the Assessing Officer are that of Shri Himanshu Kohli, who, in fact, has admitted the transactions done by himself in the name of his father. Therefore, qua the presumption u/ss 132(4A) and 292C of the Act, the entire additions, if any, should have been made in the hands of Shri Himanshu Kohli and not the assessee. We do not find any merit in the additions made by the Assessing Officer. Therefore, the Assessing Officer is directed to delete all the additions made in the hands of the assessee. - Assessee appeal allowed.

Summary

Issues involved:
Cross appeals by Assessee and Revenue against CIT(A) order for assessment years 2013-14, 2014-15, and 2015-16; Addition of gross profit and investment in unaccounted transactions; Challenge of additions before CIT(A); Assessment based on documents seized from son of Assessee; Presumption against son under sections 132(4A) and 292C; Denial of unaccounted transactions by Assessee; Admission of unaccounted transactions by son; Surrender of undisclosed income by Assessee; Lack of supporting evidence for additions; Direction to delete additions made in hands of Assessee; Validity of approval under section 153D challenged.

Analysis:
The appeals by the Assessee and Revenue were against the CIT(A) order for assessment years 2013-14, 2014-15, and 2015-16. The appeals had common issues and facts, leading to a common order for convenience. A search and seizure operation revealed unaccounted sale and purchase of non-ferrous metals by Dua group, with the son of the Assessee handling transactions. The Assessing Officer made additions of gross profit and investments in unaccounted transactions, including on a protective basis. The CIT(A) deleted additions made in the hands of the Assessee, upholding some on commission payments. The assessment was based on documents seized from the son of the Assessee, who admitted to the transactions. The Assessee denied the transactions, while the son admitted to handling them. The Assessee's statements were not contradicted by the Assessing Officer, leading to additions based on conjectures without evidence. The Tribunal found no merit in the additions and directed their deletion from the Assessee's hands. Grounds challenging the approval under section 153D were dismissed. The Assessee's appeals were partly allowed, while the Revenue's appeals were dismissed.

In conclusion, the Tribunal partly allowed the Assessee's appeals and dismissed the Revenue's appeals. The order was pronounced on 07.07.2022.