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TMI Blog2016 (5) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... investment in purchase of property in the name of assessee's son Shri Narain Agarwal. 1.1 That the ld. CIT(A) has further erred in ignoring various submissions made and evidences adduced and also by ignoring the income admitted and declared by the assessee, thus the addition of Rs. 32,43,730/- so confirmed by ld. CIT(A) deserves to be deleted.'' ITA No. 1042/JP/2011 - A.Y. 2008-09 (Revenue ) ''Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in deleting :- (i) The addition of Rs. 2,13,15,248/- made by the AO on account of excess liabilities. (ii) The addition of Rs. 3,45,000/-made by the AO on account of unaccounted loans. (iii) The disallowance of Rs. 31,065/- made by the AO out of motor car expenses and depreciation on car by applying u/s 38(2) of the I.T. Act on account of personal use. 3.1 Ld. Counsel at the outset contends that this is a unique case where assessee despite having declared substantially more income than declared in survey statement, still huge additions have been further made by ld. AO. In this backdrop the brief facts as narrated and appearing from record are - the assessee is proprietor of a concern M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n both the balance sheets. The fact that there was no common asset except that of jewelers association of Rs. 25,000/-, cannot be overlooked alongwith the fact that there are some common names on the liabilities side with different amounts. Therefore, only on the basis of the liabilities side, it cannot be concluded that the balance sheet filed with the original return is incorporated in the duplicate balance sheet. On the basis of the assets side, it can be clearly established that the duplicate balance sheet has been maintain in addition to the regular balance sheet. Still the relief of deducting common liabilities of Rs. 1,06,68,208/- was given to the assessee on the basis of the directions issued by the then Additional CIT, Range1,Jaipur u/s 144A. Hence, the common liabilities were worked out and relief to that extent was also given to the assessee apart from the total of regular balance sheet and the income already declared by the assessee in the revised return of income. But, in principle, on the basis of the facts and circumstances of the case, the duplicate balance sheet has to be considered as in addition to the regular balance sheet and the regular balance sheet cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, suo motu increasing the additional income, furnished all relevant details and working of the undisclosed income which is placed on PB 14-15. The assessee thus discharged his onus to effectively explain the working of additional income. Consequently the burden then shifted on the department to rebut the working by cogent reasoning, facts and working. The revenue has not rebutted the assessee's explanation and working in any meaningful and cogent manner. In this eventuality ld. CIT(A) has rightly upheld assessee's version. Thus the further additions have been made by AO on assumption and presumptions. The estimate of undisclosed income from summary of paper impounded during survey reflects total of assets as reduced by the liabilities and the residual figure appears termed as 'Capital'. The calculation of the additional income declared by the assessee is the balancing figure of the total of assets entries in Ann-24 minus the total of the asset side of the Balance Sheet furnished with original return. 4.3 Assessee categorically stated maintaining of two sets of books i. one for all finalized transactions based on which return of income was filed and ii. the other one pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. AO relevant question which arises and remains unanswered is : - If Ann-24 is a separate balance sheets are different and not combined one would a single entry find place in one balance sheet or in both the balance sheet? Ld. AO herself found common names/entries amounting to Rs. 1,06,68,208/- which find place in both the balance sheets. It demonstrates that the accounted and unaccounted balance sheets are interdependent, intermixed and complimentary to each. The sole incriminating paper PB7 is relied by ld. AO, based thereon, whereas assessee offered additional income of Rs. 9,38,50,009/- which is much in excess of the amount arrived at by the Ld. Additional Commissioner u/s 144A. Ld. AO has treated the assessee's working like a Profit & Loss Account, whereas it was in the form of a condensed summary of total business transactions as on 31.03.2008. The statement also reveals that the impugned balance sheet incorporated both types of transactions and balance sheets. The working of unaccounted income based on difference between the assets found minus liabilities already shown and the difference on higher side in the assets and liabilities shown in the paper impounded during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of survey. Therefore, the addition of Rs. 2,13,15,248/- is directed to be deleted." In the circumstances, it is submitted that ld. CIT(A) has accorded the relief after appreciating all the relevant factual aspects, evidentiary nature of impounded documents, accounting principles, sec. 144A directions etc. his orders deleting above deletion deserves to be upheld. 4.5 Reliance for these propositions is placed on following judicial precedents:- CIT Vs. S. Khader Khan & Son (Mad.) 300 ITR 157 Income tax survey - Scope of section 133A - Difference between sections 133A and 132(4) - Statement in survey operations - Not conclusive piece of evidence - Statement by partner in survey operations regarding undisclosed income of firm - Subsequent retraction of statement by firm - Amount disclosed by partner not assessable as income of firm - Income Tax Act, 1961, ss. 132, 133A. Paul Mathews and Sons Vs. CIT (Ker.) 263 ITR 101 The provision also enables the income-tax authority to impound and retain in his custody for such period as he thinks fit any books of account or other documents inspected by him, provided the authority records his reasons for doing so and also s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search which is duly published in print, electronic media as well as CBDT's national portal. It has been declared that the income tax authorities have to act strictly in accordance with charter while exercising their powers including Survey And Search action. To buttress his arguments, Ld. Counsel in written submissions has referred to the speech given by the Hon'ble Finance Minister on the floor of Parliament in this behalf, while proposing to simplify the procedure of searches and surveys which reads as under:- "Para 151(i) "Simplifying the procedure and methods employed during search and seizure, and during survey by the Income Tax department. First, hereafter, stocks found during the course of a search and seizure operation will not be seized under any circumstances. Second, no confession shall be obtained during such search and seizure operations. Third, no survey operation will be authorized by an officer below the rank of joint Commissioner of Income Tax. Finally, books of account impounded during survey will not be retained beyond ten days, without the prior approval of the Chief Commissioner". The CBDT vide instructions No. F.No. 286/2/2002-IT(Inv.) dated 10.03.03 has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusive proof of fact and can always be explained - Retracted statement of assessee - Second statement to be read together to evaluate weight of admission for appreciating evidence. 5. 328 ITR 384 CIT Vs. Dhingra Metal Works (Delhi) Survey- discrepancy in stock and cash-Addition on basis of statement made during survey-Assessee later contending that statement incorrect and that discrepancy reconciled as It was a mistake-statement made under section 133A not conclusive proof- Assessee able to explain discrepancy in stock by production of relevant record - Addition to be deleted-Income-tax Act, 1961, s. 133A. 5.1 Apropos revenue ground no. 2 ld. AO made an addition of Rs. 3,45,000/- on account of entries found noted in the impounded material marked as A-14, during the course of survey has enquired about the contents thereof; there is no whisper of any 'coding' or 'decoding' of figures. This indicates that all the entries were discernible, ld. AO has reproduced the contents of the said paper at page 9 of the assessment order whose total in monetary terms comes to Rs. 3,450/- which has been extrapolated to Rs. 3,45,000/- by adding two zeros and observing that "further, going by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affairs as at 31.03.2008 and any further addition is not warranted. It is therefore, contended by ld. counsel that the Ld. CIT(A) has rightly deleted the addition and thus the order of Ld. CIT(A) deserves to be uphold on this score. 6.1 Apropos revenue ground no.3, it is contended that ld. AO disallowed ad hoc 20% out of following expenses for possible personal use which has been deleted by the Ld CIT(A):- Particulars Claimed Expenses Disallowance @ 20% Motor Car Expenses 1,18,235.00 23,647.00 Depreciation on Car 37,091.00 7,418.00 Total Disallowance 31,065.00 These expenses are fully vouched and incurred under the business compulsion and commercial expediency and are wholly and exclusively for the purpose of the business furthermore depreciation is a statutory deduction hence the same cannot be disallowed. Reliance is placed on the following case law:- (1) S.A. Builders Ltd. Vs. CIT 158 Taxman 74 (SC) (2) 35 TW 64 ITO VS. M/S TRIVENI FARMA (JAIPUR) (3) 92 TTJ 1060 MUKESH K. SHAH VS. ITO (MUMBAI) 6.2 Ld. DR supported the orders of AO. 6.3 We have heard the rival contentions and perused the material available on record. Apropos the first revenue gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar to be of interest because the date has been mentioned regularly for a two month period for the same amount. Ld. CIT(A) has cited examples of - 400 / D. Modi 25.9 to 2.11. Then 400 / Rajendra 01.11.07 to 2.1.08; perusal of page 1 of annexure 24 it is seen that Shri Rajendra Ji Was debtor who has squared up his account with the assessee as on 01.04.2008. Ld. DR could not dispel such factual findings. Further it is found that assesee's cash balance as per balance sheet is Rs. 18,20,852/- and this amount being the interest income of the assessee during the year has been included in this cash balance on the basis of which the surrender has been made. In our considered view the impugned addition of Rs. 3,45,000/- has been rightly deleted by ld. CIT(A), which order deserves to be upheld. This ground of revenue is dismissed. 8.1 Apropos the third small revenue ground the expenses are not disputed to be vouched and incurred under the course of business and commercial expediency, depreciation is a statutory deduction hence the same cannot be disallowed. No instance of personal user has been cited. We see no infirmity in the order of ld. CIT(A) deleting the disallowance of Rs. 31,065/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #2339; नहीं दे पा रहा हूँ इनमें से बहुत से ऐसे कागजात होंगे जो नियमित पुस्तको में दर्ज नहीं होंगे। इस पेटे में वित्तिय वर्ष 2007-08 रू. 8,00,000/- की अतिरिक्त आय, आयकर के लिए मैं. अग्रवाल एंड कम्पनी में समर्पित करता हूँ। यहां मैं य ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 366;न के निर्माण में किए गए अघोषित निवेश के पेटे रू. 14,43,714. व अशोक अग्रवाल को अघोषित आय से दिए गए उधार के पेटे रू 4,00,000/-व अन्य loose papers में वित्तिय वर्ष 2008-09 से संबंधित आये के पेटे रू. 8,00,000/- आयकर के लिए समर्पित किए है। अर्थात् मैं. अग्रवाल ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 330;ैक अग्रिम कर (वित्तिय वर्ष 2008-09 के लिए) व स्वः निर्धारण कर (वित्तिय वर्ष 2007-08 के लिए) आपको दिए जा रहे हैं। मैं यह विश्वास दिलाना चाहता हूँ कि मैं अपना व मेरे पिता बंशीधर अग्रवाल द्वारा घोषित आय जो कि नियमित लेखा पुस्त& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st sight of the fact that impugned investment was owned by son by a sworn statement which for all purposes remains uncontroverted on the record. This material and clinching fact cannot be ignored or brushed aside. If son has admitted the income there is no reason why assessee will also offer it as his income. There is no merit in ld. AO's holding that assessee has gone back on his statement, it is a patently erroneous observation in these circumstances. Beside ld. AO has failed to substantiate that undisclosed investment is made by assesse based on any cogent evidence, reason or logic. 9.2 In the alternative, it is submitted that Rs. 9,38,50,009/- offered by the assessee for the year under consideration, the assessee has also offered additional income of Rs. 40,00,000/- in respect of assessment year 2009-10 while filing the return of income for A.Y. 2009-10 which is not backed by any evidence; the same was offered bona fide to by peace and to cooperate with the department, it has been duly accepted by the department in the assessment completed u/s 143(3) of the I.T. Act,1961 for the assessment year 2009-10 and such additional income offered is sufficient to cover the alleged inves ..... X X X X Extracts X X X X X X X X Extracts X X X X
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