9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 374 - AT - Income TaxEstimation of income - rejection of books of accounts - voluntary declaration of additional income - Held that - Since the assessee has voluntarily declared ₹ 30 lakhs as additional income, AO should have verified the basis of declaring additional income and should have verified the books of account and estimating the income merely relying on the statement given by the partner, is not correct. In our view, estimating the income without properly verifying the books of account nor rejecting the books of account is also not proper. The Hon ble Supreme Court in the case of CIT Vs. S. Khader Khan Son 2013 (6) TMI 305 - SUPREME COURT held that statement recorded u/s 133A has no evidentiary value and any admission made during such statement cannot be made basis of addition. Therefore, the statement recorded during the survey proceedings cannot be relied upon to complete the assessment and estimating the taxable income relying on such statement. We reject the estimation of income made during this AY under consideration. Since the assessee has already declared additional income, the same may be considered as taxable income for this AY under consideration. Additional service tax liability - Held that - We find that assessee has not claimed the above liability as expenditure since the assessee is not aware of the expenses of the liability before filing of the return of income and also assessee has not made payment before filing return of income. Therefore, assessee is not eligible to claim this additional liability in this current AY and assessee can claim this additional liability in the year in which it makes the payment and claim it as expenditure in the year of payment.
Issues:
Estimation of income based on partner's statement during survey, Central Excise & Service Tax demand, Additional service tax liability. Estimation of Income: The case involved the estimation of income by the Assessing Officer (AO) based on a statement made by one of the partners during a survey, where the partner admitted to estimating profit at 10% of closing stock/work-in-progress. The Income Tax Appellate Tribunal (ITAT) noted that the assessee had voluntarily declared additional income subsequent to the survey, but the basis for this declaration was not provided. The ITAT held that estimating income solely based on the partner's statement without rejecting the books of account was improper. Citing a Supreme Court case, the ITAT emphasized that statements recorded during survey proceedings have no evidentiary value and cannot be the sole basis for additions to taxable income. Consequently, the ITAT rejected the estimation of income by the AO and allowed the additional income declared by the assessee. Central Excise & Service Tax Demand: The assessee had claimed a Central Excise & Service Tax demand of a certain amount for the relevant assessment year, but this demand was raised subsequent to the filing of the income tax return and was rejected by the AO. The ITAT observed that since the assessee did not claim this liability as expenditure before filing the return of income or make the payment, the assessee was not eligible to claim it in the current assessment year. The ITAT ruled that the assessee could claim this additional liability in the year of payment and treat it as expenditure in that year. Additional Service Tax Liability: Regarding an additional service tax liability, the ITAT found that the assessee had not claimed this liability as expenditure in the current assessment year because it was not aware of the expenses before filing the return of income and had not made the payment by that time. Therefore, the ITAT dismissed the grounds related to the additional service tax liability, stating that the assessee could claim it in the year of payment and treat it as expenditure then. In conclusion, the ITAT partially allowed the appeal of the assessee, rejecting the estimation of income based on the partner's statement during the survey, dismissing the claim for the Central Excise & Service Tax demand, and rejecting the additional service tax liability for the current assessment year.
|
