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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 ..... ntain proper books of account. The staff member conceded that the professional fee receipts are accounted to the extent of 60 to 70% only. Subsequently, the assessee filed returns of income for both the years under consideration. Since the assessee did not maintain books of account, he filed cash flow statements to explain the investments and other types of cash outflow. The AO completed the assessments for both the years by making various additions. The assessee challenged the assessment orders passed for both the 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dictional High Court in the case of Paul Mathew & Sons (referred supra) deleted this addition. 6. The Ld. DR submitted that the statement was taken from the assessee as well as from Smt. Laseena, a staff member of the assessee u/s. 131 of the Act by administering oath and hence, the said statements do have evidentiary value. In this regard, the Ld. DR placed reliance on the decision rendered by this Bench of the Tribunal in the case of ACIT vs. M/s. Real Fort and Resorts Pvt. Ltd. in IT(SS)A No. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.3.2007 and she has retracted the same on 16.11.2009, i.e., after about two and half years. It is well settled proposition of law that the retraction should be made at the earliest possible opportunity. In view of the huge time gap, the affidavigt filed by Smt. K. Laseena is liable to be rejected. Even otherwise, we have noticed that the impugned addition of Rs.2.00 lakhs could be made by disregarding the statements taken during the course of survey. In view of the foregoing, in our view, the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO without examining the same and the Ld CIT(A) has also accepted the said explanations without causing necessary enquiries thereof. Thus, both the tax authorities have not examined this issue in a proper perspective. Hence, in our view, this issue also requires fresh examination at the end of the Assessing Officer. Accordingly, we set aside the order of the Ld. CIT(A) on this issue and restore the same back to the file of the Assessing Officer with a direction to examine the issue afresh 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of Rs.2.00 lakhs was made to the professional income. The Ld CIT(A), as in the case of immediately preceding year, deleted the addition on the ground that the AO should not have placed reliance on the statement taken during the course of survey. 17. While considering an identical issue in the preceding year (supra), we have given a finding that the addition to the professional income could be made by the assessing officer, even without placing reliance on the statements taken 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the genuineness of the transaction. In the instant case, it is not known as to whether the assessee did furnish any other document except the bank accounts of both the parties. Further, the assessee did not produce both the creditors before the assessing officer, though he was asked to produce them. According to the assessee, he was not given enough time to produce them. These discussions show that the impugned addition of Rs.5.00 lakhs has been made without carrying out necessary verification as mandated by the provisions of sec. 68 of the Act. We have already noticed that the Ld CIT(A) has deleted the impugned addition without giving any reason. Under these circumstances, in our view, this issue requires fresh examination at the end of the assessing officer. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the assessing officer with the direction to examine the issue afresh and take appropriate decision in accordance with the law. 20. The assessee has filed the cross objections only to support the orders passed by Ld CIT(A). Hence, we dismiss both the cross objections. 21. In the result, both the appeals of the revenue are treat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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