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TMI Blog2013 (6) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... ction should be made at the earliest possible opportunity. In view of the huge time gap, the affidavit filed by Smt. K. Laseena is liable to be rejected. Thus AO was justified in making the addition. Against assessee. Addition of cash credit received from Smt. Mini, spouse of the assessee - CIT(A) deleted the addition - Held that:- AO has added the amount without examining either the assessee or the spouse of the assessee & CIT(A) has deleted the addition without carrying out any such examination. Thus, both the tax authorities, has proceeded to deal with this issue on surmises by making certain presumptions failing to examine the above said cash credit as mandated by the provisions of sec. 68 - restore the same back to the file of AO for reconsideration. Addition of cash credit received from a concern named M/s. Priya Health Care - CIT(A) deleted the addition Held that:- AO did not accept the genuineness of credit without carrying out any verification & CIT(A) has also deleted the addition without making any examination of the claim of the assessee. Thus, both the tax authorities, has proceeded to deal with this issue on surmises by making certain presumptions failing to exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he years by filing appeal before ld CIT(A) and succeeded. Aggrieved, by the orders passed by Ld CIT(A), the revenue has filed these two appeals before us. The assessee has filed cross objections supporting the orders passed by Ld CIT(A). 3. We shall first take up the appeal filed for the assessment year 2006-07, wherein following issues are agitated. (a) Addition to Professional income - Rs.2.00 lakhs (b) Addition of cash credit from Smt. Mini, spouse of assessee - Rs.4.00 lakhs (c) Addition of cash credit from M/s Priya Health care - Rs.10.00 lakhs (d) Addition of cash credit relating to sale of furnitures - Rs.1,53,165/- (e) Disallowance made u/s 80C(5)(iii) - Rs.1,07,042/- At the time of hearing, the learned counsel for the assessee submitted that he is conceding the ground relating to the disallowance made u/s 80C(5)(iii) of the Act, i.e., item (e) listed above. Accordingly, the decision rendered by Ld CIT(A) on that issue is set aside and the order of the assessing officer on that issue is restored. 4. The first issue relates to the addition of Rs.2.00 lakhs made to the professional income. During the course of survey proceedings, it was noticed that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 217/Coch/2005. The Ld. DR further submitted that the assessee did not maintain proper books of accounts and hence the AO was constrained to make an addition of Rs.2.00 lakhs as suppression of professional income. 7. On the contrary, the Ld A.R submitted that the statement taken from Smt. K. Laseena, one of the staff members of the assessee was not put to the assessee and hence, the Assessing Officer should not have placed reliance on this. He further submitted that Smt. K. Laseena has filed an affidavit subsequently, wherein she has retracted from the statement given by her during the course of survey operations. The Ld. Counsel for the assessee submitted that the statements taken during the course of survey do not have any evidentiary value in view of the Hon'ble Jurisdictional High Court of Kerala in the case of Paul Mathew Sons, referred supra. 8. We have heard the rival contentions on this issue and perused the record. Admittedly, the assessee did not maintain proper books of accounts. Though the assessee is carrying on various types of activities as mentioned in the previous paragraphs, yet he could not furnish the breakup details for Gross professional receipts of Rs.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer was justified in making the addition of Rs.2.00 lakhs towards suppression of professional receipts. Accordingly, we set aside the order of the Ld. CIT(A) on this issue and restore the addition made by the AO. 10. The next issue relates to the addition of cash credit received from Smt. Mini, spouse of the assessee. In the cash flow statement filed for the financial year 2005-06, the assessee disclosed a receipt of Rs. 14 lakhs from his spouse, named Smt. Mini. Before the Assessing Officer, it was claimed that the above said amount of Rs. 14 lakhs was received by Smt. Mini from her father-in-law. It was further submitted that a sum of Rs.10.00 lakhs out of the said amount of Rs. 14 lakhs was used for purchasing a demand draft in connection with the admission of her son into a medical college. The Assessing Officer noticed that Smt. Mini withdrew the remaining amount of Rs.4.00 lakhs immediately after the purchase of demand draft of Rs. 10 lakhs. Hence the Assessing Officer took the view that the withdrawal of Rs.4.00 lakhs could also have been used in connection with the medical college admission of her son and hence, the said amount could not have been given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh and take appropriate decision in accordance with law. 13. The next issue relates to the addition of Rs.1,53,165/- relating to the sale of furniture and fittings. The facts relating to the same are stated in brief. In the cash flow statement, the assessee had disclosed the amount received from sale of a flat at Rs. 11,18,165/-. The Assessing Officer, however, noticed from the sale deed that the assessee had sold the flat for a consideration of Rs. 9,65,000/- only. When enquired about the difference in the amount of sale consideration, the assessee submitted that he had sold the furniture and fittings available in the flat separately for a sum of Rs.1,53,165/-. However, the assessee could not substantiate the said claim with any documentary evidence. The AO also noticed that the assessee did not account for any expenditure on purchase of furniture and fittings. Accordingly, the Assessing Officer rejected the claim of receipt of Rs.1,53,165/- and assessed the same as income of the assessee. Before the Ld. CIT(A), the assessee contended that the furniture and fittings were acquired by him over the years, by spending a sum of Rs. 20,000/- per year. The Ld. CIT(A) accepted the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the assessee as well as one of the staff members, in view of the defects in maintenance of books of accounts. In the instant year, the AO has estimated the possible suppression of professional income at Rs.3.50 lakhs and added the same to the total income of the assessee. We also notice that the survey officials have found unexplained cash of Rs.3,64,075/- during the course of survey. However, the AO chose not to make any addition in respect of the unexplained cash, in view of the addition of Rs.3.50 lakhs made towards professional receipts. In effect, the AO has telescoped the unexplained cash balance against the above said addition. Thus, it is seen that even if some relief is given against the addition of Rs.3.50 lakhs, it would automatically get offset by the addition relating to unexplained cash found during the course of survey. For the reasons stated by us while confirming the addition of Rs.2.00 lakhs in the immediately preceding year, we confirm the addition of Rs.3.50 lakhs made in the instant year also. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore that of the Assessing officer. 18. The next issue relates to the addition of Rs.5.00 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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