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TMI Blog2008 (10) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 which includes excess stock found during the survey. The assessee returned income for Rs. 4,16,523 by retracting Rs. 1,60,000 out of cash surrendered which is Sch. I of the audit report. The retraction was done at the time of filing return. The assessee explained that Rs. 1,60,000 withdrawn on 20th Jan., 2003 from Nagrik Sahakari Bank Ltd. by cheque No. 328761, dt. 20th Jan., 2003 by Shri Amit Agarwal son of Shri Jai Bhagwani Agarwal. The AO has discussed the issue and made the addition after verification of the facts. 5. In the appeal filed before the learned CIT(A), the learned CIT(A) vide order dt. 19th March, 2007 has confirmed the addition as discussed on p. 2 para 3 which is reproduced as under: "The second ground of appeal is against addition of Rs. 1,60,000 for unexplained excess cash found at the time of survey though it was stated that the same was withdrawn from bank. The AO has rightly discussed in detail this point in paras 5 to 8 of his order. The assessee had already surrendered excess cash at the time of survey. The same was retracted. The theory of cash withdrawn on the same date from distant place of 140 (sic) away was apparently not believable because withdr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The fact cannot be suspected only because the person who has withdrawn the cash has travelled 140 kms. which is not believable to AO and the learned CIT(A). But the facts remain that there is a withdrawal of Rs. 1,60,000 from bank and recording in the books of account. The retraction was made by the assessee on the basis of corroborative evidence of the cash book copy of the cheque and bank account statement. There is nothing wrong to retract on corroborative evidence at the time of filing return on the basis of corroborative evidence before assessment. It is not obligatory on the part of the assessee under the Act to retract from the statement given at the time of survey immediately. Because retraction is always on the basis of corroborative evidence/documents in support of the claim of retraction. The addition was made on presumption of travelling by the person who has withdrawn the amount but there is withdrawal recorded in the books of accounts which was not rejected or falsified by the Revenue. Our view gets support from order Dy. CIT vs. Raja Udayshankar (2006) 7 SOT 680 (Bang) and others. 10. Any addition on the basis of admission of the assessee at the time of survey cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee firm from its account with Nagrik Sahakari Bank Ltd., Raipur and the distance between Raipur and Basna where the premises of the assessee was situated, was 140 kms. According to him, it was thus not possible to withdraw the amount of Rs. 1,60,000 from Raipur bank on 20th Jan., 2003 itself and to bring the said cash at the premises of the assessee before commencement of survey. He also observed that if the amount withdrawn on the very same day to the extent of Rs. 1,60,000 was included in the cash found during the course of survey, this fact should have been brought to the notice of the survey party by the assessee. He further noted that Shri Amit Agarwal is a proprietor of Chhatisgarh General Stores, Basna and during the course of survey operation carried out in the case of the said concern from 20th to 22nd Jan., 2003, he was present. He therefore, found no merit in the explanation offered by the assessee and rejecting the same, proceeded to add an amount of Rs. 1,60,000 to the total income of the assessee on account of excess cash found during the course of survey in the assessment completed under s. 143(3) vide his order dt. 30th Dec., 2005. 3.1 The aforesaid order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt was ever taken by the appellant regarding forwarding of such an explanation which has been put forward, during the course of assessment. It is also to be noted that although there was a retraction at the time of filing of return, the story regarding withdrawal from ZNSB, Raipur was first introduced by the appellant during the course of hearing i.e., during the course of assessment proceeding, when opportunity was allowed to the appellant to explain the cash. Hence there are not a single but many gaps in the submission of the appellant. Firstly, it is not practically possible to start from Basna in the early morning to withdraw the fund from Raipur bank and cover again a total distance of 280 kms. (on both sides) and to bring the fund at Basna office of the appellant. Secondly, the bank at Raipur opens only at 11 o'clock hence, it is not practicable to bring the fund from Raipur to Basna before the starting of survey operation. Thirdly, if at all the fund was brought, the matter should have been in the knowledge of all/any of the partners or Shri Amit who was stated to have brought the fund or any of the employees of the appellant company, but the same was not disclosed before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t keeping in view the distance between Raipur and Basna, it was not possible to withdraw the cash from Raipur bank and bring the same to the assessee's premises situated at Basna. In this regard, his contention was that even though bank at Raipur opens at 10.30, there was nothing on record to show that the survey operation had commenced at 11 o'clock as presumed by the learned CIT(A). He submitted that taking into consideration the location of the assessee's premises, there was every possibility that the survey would have started late in the afternoon. He also pointed out that despite his efforts, he could not get any information from the Department about the exact time of commencement of survey operation. He contended that there was thus no justification in the action of the authorities below in rejecting the explanation of the assessee as regards excess cash found during the course of survey to the extent of Rs. 1,60,000 which was duly supported by documentary evidence. 5. The learned Departmental Representative, on the other hand, strongly relied on the orders of the authorities below on this issue. He submitted that no explanation whatsoever was offered by the assessee about t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he very same date in the banking hours at Raipur at the premises of the assessee situated 140 kms. away from Raipur before the commencement of survey at 11 a.m. The contention of the learned counsel for the assessee in this regard is that keeping in view the location of the premises of the assessee, there was a possibility of survey having been started late in the afternoon. However, there is no evidence whatsoever brought on record to support and substantiate this contention. Even if it is assumed for the sake of argument that the said cash amounting to Rs. 1,60,000 withdrawn from the bank on the very same date was available at the time of survey, the assessee would have or rather should have pointed out the same to survey party when he was called upon specifically to explain the excess cash found during the course of survey. On the other hand, he did not offer any explanation about the excess cash so found and in his statement recorded during the course of survey a partner of the assessee firm agreed to surrender the said cash as the income of the assessee firm. Moreover, if at all it was subsequently noticed by the assessee that the cash withdrawn from the bank to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there will be a camp of Tribunal, Bhilaspur at Raipur for a fortnight from 17th Nov., 2008. In view of above it is prayed that hearing of above appeals may kindly be adjourned for any date on or after 17th Nov., 2008 for Raipur camp." The request of the counsel for the assessee is uncalled for since the Division Bench at Raipur cannot hear the matter which is to be heard by Third Member nominated by the Hon'ble President, Tribunal. Accordingly, the Registry was directed to contact the counsel for the assessee on telephone and inform that such request cannot be acceded to and the adjournment, if any, can be given for a day or two. In pursuance of the said direction, the Registry has put a note dt. 13th Oct., 2008 wherein it has been stated that the counsel for the assessee is unable to attend on the fixed date and he has no objection if the case is heard ex parte. In view of the same the undersigned has decided to proceed to hear the appeal ex pane on the fixed date i.e., 14th Oct., 2008. It may also be mentioned that none appeared on behalf of the Revenue despite proper service of notice. Even no application for adjournment has been filed on behalf of the Revenue. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Members constituting the Bench could not arrive at the uniform view. The learned AM agreed with the reasonings given by the CIT(A) and consequently, dismissed the appeal of the assessee on this issue. On the other hand, the learned JM observed in para 9 of his order that withdrawal of Rs. 1,60,000 by the assessee by cheque on 20th Jan., 2003 was duly supported by recording the same in the books of account maintained by it and this fact could not be suspected only because the person who had withdrawn the cash had travelled 140 kms. It was further pointed out that the retraction was made by the assessee on the basis of corroborative evidence of the cash book, copy of cheque and bank account statement and there was nothing wrong to retract on the basis of such corroborative evidence. According to him, the addition was made merely on presumption of travelling by the person who had withdrawn the amount. This fact of withdrawal of money was not found to be false. Hence, in his view the addition was not justified. Accordingly, he deleted the addition made by the AO. 6. The orders of both the learned Members, the orders of lower authorities as well as the material forming part of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce on the entries in the cash book by the learned JM is of no relevance. It is also pertinent to note that the statement under s. 131 of the Act recorded in the course of survey was of Shri Amit Aggarwal himself. If he himself had withdrawn the cash from the bank then it is difficult to accept the contention that he forgot to tell the fact of withdrawing the cash from bank in his statement recorded at the time of survey. Considering the entire facts of the case, it is impossible to believe the story of the assessee. May be that cash might have been withdrawn by somebody else on behalf of the assessee which might have been kept somewhere else since it was practically impossible to bring the cash from a place which is 140 kms. away from assessee's place of business. The test of human probabilities has to be kept in mind while deciding the issue based facts as held by the Hon'ble Supreme Court in the case of Sumati Dayal vs. CIT (1995) 125 CTR (SC) 124 : (1995) 214 ITR 801 (SC). Applying the test of human probabilities, the stand of the assessee cannot be accepted. For the reasons given above, I am of the view that the learned AM is justified in upholding the addition made by the AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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