9911796707
TMI Blog2013 (11) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. In support two death certificates, i.e., of Shri Lalit (on 26.11.2011) and Shri Harshad Devji Pujara, partner (on 28.02.2012), evidencing the two deaths in the family in succession subsequent to the receipt of the copy of the appeal filed by the Revenue against the impugned order before the Tribunal on 25.11.2011, as well as a medical certificate dated 16.05.2012 in respect of Shri Harshad Devji Pujara being on complete bed rest since 13.12.2012. The facts being not in dispute, we find sufficient reasons for the delay. The assessee's condonation application was, accordingly, accepted and the hearing proceeded with after admitting its C.O. 3.1 The facts of the case are that the assessee, a partnership firm in the business of C & F Agents as custom house agent was subject to survey again u/s.133A of the Act on 14.02.2007. Two loose papers (PB pgs. 1-2) and a scrap note book (PB pgs. 3-20), containing 2 and 18 pages respectively, were found. Several amounts were written thereon. The assessee could not explain the said 'receipts' and, accordingly, a sum of Rs.2.3 crores was admitted as income for the relevant year, i.e., A.Y. 2007-08. The same was retracted subsequently v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18. The assessee had also claimed expenses at Rs.113.37 lakhs by way of expenditure under different heads of account. As the same were not verifiable, the A.O. effected a disallowance for 10% thereof at Rs. 11.34 lakhs. The assessment was, accordingly, framed at Rs.234.56 lakhs, enhancing the returned income by the aggregate of Rs.214.28 lakhs, as suppressed income and disallowed expenses of Rs.11.34 lakhs. 3.2 In appeal, the assessee made comprehensive submissions, which stand reproduced by the ld. CIT(A) in full. With regard to the principal addition qua suppression of income, though he agreed with the A.O.'s finding in principle, he restricted the income to Rs. 21,42,795/-, i.e., at 10% of the aggregate amount, on the basis that the entire of it could not represent income, being decidedly only gross receipts. With respect to disallowance of expenditure, he found that the assessee had in fact recovered the said expenses, incurred for and only on behalf of its customers; rather exhibiting an excess recovery by Rs.6.11 lakhs, which was offered as income. The same was, accordingly, deleted. While the Revenue cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated amount of expenditure required to be incurred for getting the work done by the staff on a particular day. These were written as the appellant had to estimate the expenditure that would be required in respect of each consignment, and arrange for advance from the concerned customer to meet the same. Moreover, funds were also required to be transferred to the branch office. None of these amounts represents any income. In fact, there were notings in the two columns at PB pg. 17, which could only mean or signify some difference. If the left side is taken as of 'receipts', that on the right ought to be taken as 'expenses', while the Revenue had added both of them, instead of allowing deduction in respect of the same. As regards the 'admission', the same stood retracted soon afterwards, i.e., after eight days; the assessee realizing his statement to be incorrect, having been made under duress. The statement u/s.133A has no evidentiary value, as stands held by the courts time and again, and for which reliance was placed by him on the decision in the case of CIT v. S. Khader Khan Son [2008] 300 ITR 157 (Mad.), against which SLP has since been dismissed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.06.06 60,000=00 29.07.06 2900=00 28.06.06 50,000=00 - 4050=00 30.06.06 90,000=00 - 10375=00 6,55,000=00 - 8750=00 Page 5 1500000/- 30000/- 14000/- 45000/- 12000/- 31500/- 24750/- 35000/- 45000/- 50000/- 2000/- 3800/- 31500/- Page 6 1270000/- 24000/- 12000/- 32000/- 47000/- 24500/- 38600/- 19000/- 11000/- 49000/- 160000/- 122410/- 114000/- Page 17 1.21 L 1.83 L 2.40 L .53 T .47 T 1.65 L 1.72 1.33 .10 .33 1.11 2.23 Even as observed during the hearing, we are unable to persuade ourselves to agree that the said figures are written without any purpose or end. The entries, neatly made, one for each date, for different dates, in a chronological order, by a partner managing the affairs of the firm (i.e., for most part), cannot be a scrawl, without any meaning. Further, the first two sheets (pgs. 1-2), bearing a 'date' in the first column of each row, imparts meaning to the same as being in respect of a particular date, i.e., to which the corresponding entry pertains. In fact, the assessee's explanation/s, i.e., of the same being with regard to sums recoverable from the debtors or for expenses being required to be incurred, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there-from, written for being followed up with a customer/s. Rather, the follow up could be with more than one customer on any day; so that their separate names, and the corresponding amounts, would have to be necessarily written, while there is a single entry day after day. In any case, the amount collected would again find reflection in the said statement or the assessee's accounts, i.e., subsequently, if not on the same day, while no such correspondence or reflection has been even attempted, much less shown. Similarly, for the same to represent an expense, it must be qua different works; different staff members; and also qua different customers, if the explanation is to be meaningfully applied. The said two 'explanations' are merely an after-thought, which remain un-corroborated with either the document or the entries made therein, which it seeks to explain, leave alone the assessee's accounts. The same in fact only need to be stated to be rejected. 5.4 Coming to the assessee's first and the only surviving explanation, i.e., of the same being of the receipts of its business, the same stands accepted by the Revenue, adding the same on the basis of it representing the assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances on the assessee was heavy, to show as to what mistake of fact resulted in admission, and which it is abysmally failed to. The two alternate 'explanations', rendered subsequently, have also been found to be as of no merit. The said material, coupled with the assessee's statement, as well as the subsequent explanations justifying the entries, leads us to state that the same constitutes valid material on which an inference could be based, and cannot be said to be a conjecture, as claimed by the assessee. 5.5 We, next, proceed to examine the assessee's objection qua estimation of suppression of income. We find much merit in its argument that the Revenue having accepted and proceeded on the basis that the entries represents the gross receipts of its business, could not have without any supporting or corroborative material, inferred the entire amount as its suppressed income. No doubt, it may well be that the same represent the sums billed to the customers in respect of services rendered, which are also a subject matter of regular booking in accounts, i.e., represents the excess amount charged there-from, so that the entire of it may be income, with the entire expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und # 2, gets decided accordingly. Coming back to the addition on account of suppression of income, estimated by the ld. CIT(A) at Rs.21,42,759/-, we find the same as reasonable, meriting confirmation; the assessee having itself disclosed an excess of around 6% on even the expenses recoverable from its clients. In deciding this issue, apart from our findings at para 5.1 through 5.4 of this order, we have also considered the assessee's argument of netting the amount written on the right side, so that its nature could only be a different, i.e., representing out-lays, only to find the same as not acceptable. This is for the reason that it is not possible that such expenditure is incurred only on few (sixteen) days in a year, or even more importantly, not in the regular course; the entries appearing on only two pages, i.e., pg. nos. 11 and 17 of the note-book running to 16 pages. Further-more, the assessee surprisingly does not receive any amount on the said dates, so that it may represent an either or situation. Rather, the expenditure would not only be incurred on the basis of which the amount stands received, but also, where it is not so, there being as afore-note ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
