9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (9) TMI 506 - AT - Income TaxUndisclosed cash deposits made in bank accounts - there were incriminating material and information revealed during the course of survey and that Husband of assessee, in his statement recorded on oath u/s 131 during survey had admitted such deposits as assessee s undisclosed income - CIT(A) deleted addition - HELD THAT - It is not denied that the Assessee has been maintaining regular books accounts which consisted of cash books which were subjected to tax audit. Some undisputed facts are that there was a huge turnover of more than Rs. 43 Crores and upto 12.11.2016 total business receipts are Rs. 30,76,17,041/- on account of advertising receipts and most of the transactions were routed through banking channels, which resulted into cash balance of Rs. 77,66,449/- on 08.11.2016. Pertinently, there is no dispute that the accounts including the cash book were produced before the lower authorities during the assessment appellate proceedings and were not found any fault with nor were rejected invoking S. 145 and therefore, as per mandate of that provision, they were binding upon the authorities below. Difference between the cash balance shown in the impounded cash book and as shown in the regularly maintained cash book on 08.11.2016 - AO vaguely whispered of some manipulation but failed to establish as such. However, the alleged difference was also explained by the assessee stating that various expenses on account of repair maintenance, business promotion, etc. were pending and could not be entered therein. We agree with the contention of the ld. AR Adv. Mahendra Gargieya that the survey was carried out mid of the year and it is not abnormal if various transactions remained to be recorded. The correct picture can be seen only after the completion of the accounts from all aspects, more particularly when they are audited. The ld. CIT(A) has already dealt with this issue but the revenue has not taken any specific ground on the aspect of the difference of Rs. 79.95 lakhs. We find no reason as to why the statement admitting the bank deposits as income (that too on behalf of the assessee but not even by the assessee) should be accepted. The alleged admission is claimed to have been retracted by filing affidavit dt. 14.02.2017 (APB 140-143) before the ADIT (INV) on 06.04.2017 i.e within a period around 2 months after the survey when admission was made.CIT(A) although rejected the claim of the assessee of filing retraction in absence of any evidence brought on record of approaching to the higher authorities. However, he appreciated the contents of the impounded documents and the explanation furnished by the assessee thereon and recorded independent finding, while granting relief. Therefore, he recorded a categorical finding that the retraction from the earlier statement was with sufficient, credible and corroborate evidence to support the claim of the assessee. We have also carefully considered the claim of filling retraction; however, in view of the contrary claim raised, we are not going into this controversy. CIT(A) was justified in its approach. In the ultimate analysis taking a conspectus view of the entire facts circumstances and the legal position, we find no perversity in the order of the CIT(A). There is no case made out by the revenue to reverse the findings of the first appellate authority. Hence this ground No. 1 of the revenue is hereby dismissed. Undisclosed income surrendered during the survey - CIT(A) deleted addition - HELD THAT - As carefully gone through the findings recorded by the AO in the assessment order and also the detailed findings recorded by the ld. CIT(A). After careful consideration of the entire matter, we find no substance in this ground taken by the revenue in view of the detailed findings recorded by the ld. CIT(A) and also in view of the fact that admittedly no incrementing material to support this addition was found nor any other document has been relied upon by the AO. This addition appears to be a part of the surrender of Rs. 2 Crore made by the assessee which was firstly retracted and secondly was not otherwise supported by any documentary evidence as such found during survey. Ground No. 2 of the revenue is hereby dismissed.
Issues Involved:
1. Justification of CIT(A) in not appreciating incriminating documents and deleting the addition of Rs. 72,00,000/-. 2. Justification of CIT(A) in deleting the addition of Rs. 35,550/-. Detailed Analysis: 1. Justification of CIT(A) in not appreciating incriminating documents and deleting the addition of Rs. 72,00,000/-: The Revenue argued that the CIT(A) did not appreciate the incriminating documents found during the survey, which indicated unaccounted transactions. The AO relied on the statement of Shri Naresh Jain recorded under oath u/s 131, admitting that Rs. 72,00,000/- deposited during demonetization was from undisclosed sources. The assessee countered that the cash deposited was from cash withdrawals from bank accounts during the FY 2016-17. The CIT(A) noted that the AO failed to reject the books of accounts maintained by the assessee, which were audited and showed a cash balance of Rs. 77,66,469/- on 08.11.2016. The difference between the cash balance as per the impounded document (Rs. 1,57,62,376/-) and the regular cash book was due to pending expenses. The CIT(A) verified the claim and found that the books of accounts were tallied with bills/vouchers, and the cash deposits were matched with cash withdrawals. The AO's remand report confirmed that there was sufficient cash available to deposit Rs. 72,00,000/- during the demonetization period. The CIT(A) concluded that the addition made by the AO was not sustainable as the source of cash deposited was explained with credible evidence. The Tribunal agreed with the CIT(A)'s findings, noting that the AO did not establish any substantial mistake in the regular cash book. The Tribunal also emphasized that the statement recorded during the survey u/s 133A does not have binding evidentiary value and cannot be the sole basis for addition. The Tribunal dismissed the Revenue's ground, affirming the CIT(A)'s deletion of the addition of Rs. 72,00,000/-. 2. Justification of CIT(A) in deleting the addition of Rs. 35,550/-: The AO added Rs. 35,550/- as undisclosed income based on the statement of Shri Naresh Jain during the survey, which included a total surrender of Rs. 2,00,00,000/-. The CIT(A) noted that the total additions for A.Y. 2015-16 and A.Y. 2016-17 exceeded Rs. 2,00,00,000/-, leaving no balance for A.Y. 2017-18. The CIT(A) observed that the addition of Rs. 35,550/- was only a balancing figure to make the total of Rs. 2 crore of disclosure made in the statement. The AO accepted that if the addition for A.Y. 2015-16 was corrected to Rs. 1,81,18,746/-, the total additions would exceed Rs. 2,00,00,000/-, making the addition for A.Y. 2017-18 unsustainable. The Tribunal agreed with the CIT(A)'s findings, noting that no incriminating material was found to support the addition of Rs. 35,550/-. The Tribunal dismissed the Revenue's ground, affirming the CIT(A)'s deletion of the addition of Rs. 35,550/-. Conclusion: The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s deletion of the additions of Rs. 72,00,000/- and Rs. 35,550/-. The Tribunal found that the CIT(A) had appropriately considered the evidence and explanations provided by the assessee, and the AO's reliance on the survey statement alone was not justified.
|
