9911796707
TMI Blog2017 (9) TMI 1708X X X X Extracts X X X X X X X X Extracts X X X X ..... ding has been recorded by the CIT(A) in paras 4 and 5 respectively of his order? 2. Whether on the facts and in the circumstances of the case and in law, the ITAT is right in holding that interest u/s 234A&234B of the IT Act should be counted from the date when the last copies of the documents seized during the course of search were available to the assessee?" 3. Counsel for the appellant Mr. Mehta has taken us to the order of AO and contended that while considering the case of assessee the Assesseeing Officer has taken into consideration the statement recorded by the competent authority and thereafter considering the unexplained stock and immovable property has assessed the income as under:- "Addition on account of unexplained investment in stock and immovable property: The assessee made a surrender of Rs. 1,02,25,168/- as per his letter dated 22.12.2009 filed on 22.12.2009. "kindly refer to the assessment proceedings in progress in the case of captioned assessee. Without prejudice tothe submissions made earlier and the material available on record the following facts are submitted for your kind perusal and record. During the course of search operation conducted on 10- 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22.12.2009 (APB 61-83). The main allegation of the Ld. AO regarding the non acceptance of stock details submitted for the prriod from 01.04.2007 to 10.01.2008 was that the stock items as per assessee's working sheet are 781 and as per stock sheet prepared by the Income Tax Department during the course of search are '1402' however, the quantity submitted by the assessee was not properly appreciated by the Ld. AO who making total of the S.No. The actual quantity as submitted by the assessee and as quantify by the department during the course of survey are as under: As per Assessee: S.No. Name of the firm No. of items Total value of stock 1. Shyam Moorti Emporium 272 143655 0.00 2. Shyam Exports 402 536455 0.00 3. Shyam Moorti Kala 688 242980 0.00 4. Shyam Moorti Museum 484 367658. 00 5. Shyam Moorti Palace 390 245133 5.00 Total 2239 120498 93.00 I have considered the submission of the ld. A.R, and have perused the assessment order, remand report of A.O. and the material on record. The appellant has furnished common submission for ground no. 1 to 4 and these have been considered together. As already mentioned it is undisputed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y reason. It is contended that the Tribunal while considering the same has not adverted to the argument advanced by D.R. and allowed the appeal in favour of the assessee. 6. Counsel for the respondent Mr. Gupta has taken us to the observations made by the A.O. which reads as under:- "In view of the non-compliance and non-cooperative attitude of the assessee a proposal for launching of prosecution proceedings u/s276 CC of the Act was sent on 11.11.2009 to the CIT, Central, Jaipur." 7. In view of non-compliance therefore, the notice which was sent on 11.11.2009 the assessee has compelled to surrender himself and therefore, he has surrendered. However, he has produced all documents which are now produced today before this court and also taking into consideration the statement which are recorded and the material which are available on record, the Tribunal has held as under:- 2.6 Per contra the Ld. DR has supported the orders of the authorities below and has submitted that the assessee himself has made surrender on account of excess stock in the statements recorded during the course of search proceedings and also before the assessing authority during the course of assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the excess stock in the statements recorded u/s 132(4) of the Act at the time of search however while filing the return of income he did not include that amount in the income declared which by itself is a retraction to the statements and when during the course of assessment proceedings he was once again compelled by the assessing authority then a conditional offer was made where he offered the additional income on account of excess stock to purchase the peace of mind with a further condition that penalty should not be levied on such additional income and the AO did not accept his offer, the assessee on the next very day, submitted the necessary reconciliation and other relevant details alongwith the books of accounts to the AO for verification and claimed that there was no discrepancy in the stock as at the time of search the books of accounts were incomplete and after completion of the same the inventory sheet has been prepared and filed. The Jaipur bench of ITAT in the case of Kalindee Rail Nirmal Engg. Ltd. Vs. DCIT reported in 28 TW page 280 has held that counter proposal given by the assessee is not binding on it since it was not acted upon by the AO in its entirety and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,118/- (being 1,17,30,918 - 25,86,800) was worked out by the department. Besides, this certain other entries of unexplained investment in the acquisition of property at Axis Mall for Rs. 28,76,050/- was also found and was admitted by assessee. However, in the return of income filed assessee has admitted and disclosed additional income of Rs. 10,30,000/- in addition to Rs. 3,10,000/- declared in A.Y. 2005-06, Rs. 4,55,000/- declared in A.Y. 2007-08 being the investment made in the acquisition of the property at Axis Mall and had not declared any additional income on account of the alleged excess stock admitted during the course of search. During the course of assessment proceedings it was contended that the books of accounts were incomplete at the time of search and thereafter the same were completed on the basis of the purchase and sales vouchers available with the assessee and the stock available as per books of accounts was worked out based on that there remained no difference in the physically found stock and the stock as per books of accounts. Assessee also filed the necessary explanations / evidences in support of the contentions but the Ld. AO (APB 30-79) without in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the competent authority i.e. the Ld. CIT(A), Central, Jaipur who summarily rejected the appeal of the assessee by making various observations at pages 14 to 19 of his order which are summarized as under: 1. In the statement recorded u/s 132(4) during the course of search the assessee has accepted excess stock of Rs. 1,17,30,918/- in reply to question no. 25 of his statement. 2. The appellant failed to furnish the books of accounts and more particularly purchase vouchers before the AO. The appellant in presence of his AR's filed letter of surrender dated 22.12.2009 and offered Rs. 1,02,25,168/- for tax. 3. It is a clear cut case where the excess stock was not only found but surrendered during the course of search and later on the appellant tried his best to escape from the tax liability. 4. The condition of not imposing the penalty so put by the appellant is just a ploy to try to avoid further financial burden and such condition is lawfully invalid condition. 5. In answer to Question No. 10 in his statements recorded during the course of search, the appellant had stated that no physical inventory of stock is prepared and only on the basis of estimate, details of stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings has submitted the complete list of inventory alongwith the details of purchases etc. so as to prove that the stock available is duly recorded in the books of accounts (APB 31 to 79). It is an established law that confession cannot be made foundation of the assessment and the Hon'ble Supreme Court in the case of Pullangode Rubber Products Co . Ltd. V/s State of Kerala reported in 91 ITR 18 has held that if the person making the confessional statement has rebutted the same with evidences such confession could not be made basis for making the additions, therefore the statements given by the assessee cannot be made sole basis for making a huge addition. 2. That with regard to failure to furnish books of accounts and purchase bills are concerned, it is submitted that the assessee had maintained all the required details and books of accounts were also audited as per the requirement of the I.T. Act, 1961. The books of accounts so maintained in the normal course of business were also tendered for verification before the AO as and when desired which is also clear from the reply dated 24.12.2009 (APB 30). Further the confirmation and other details as desired by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: As per Assessee: S.No. Name of the firm No. of items Total value of stock APB 1. Shyam Moorti Emporium 275 1436550.00 31-34 2. Shyam Exports 402 5364550.00 39-43 3. Shyam Moorti Kala 688 2429800.00 49-54 4. Shyam Moorti Museum 484 367658.00 64-65 5. Shyam Moorti Palace 390 2451335.00 66-72 Total 2239 1204989 3.00 As per Income Tax Department: S.No. Name of the firm No. of items APB 1. SFA 626 148-170 2. SFB 344 187-194 3. SFC 220 201-206 4. SFD 251 211-218 5. A 441 225-226 6. SMK 113 230-236 Total 1995 From the perusal of the above tables your honours would appreciates the fact that the total quantity of the items available with the assessee as on the date of search are more than the physically counted by the search team and such difference is only due to the reason that for eg. 'Ram Mandir' (APB 41 S. No. 111 and APB 169 S. No. 577) was counted as 1 item by the search team however it has been counted as 3 items in the sheet submitted by the assessee. Further in the stock sheets submitted by the assessee it has also included a column containing the relevant reference of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portunity to complete the books of accounts found incomplete at the time of search. It is thus submitted that the stock declared by the assessee deserves to be accepted and observation of Ld. CIT(A) regarding nonmaintenance of stock details deserves to be ignored. With the above back-ground, it is submitted that the no stock was found as in excess and the admission of the assessee being made with stipulation of no penalty proceedings be initiated was not accepted by the department in toto and except the so called admission no material has been brought on record to hold the stock inventory as on the date of search as submitted by the assessee in terms of the letter dated 24.12.2009 as manipulated or fabricated or defective in any manner thus in these circumstances, the addition made deserves to be deleted in toto." 2.8 After carefully considering the submission in this regard and perusing the material available on record, we are of the considered opinion that the assessee has been able to explain the difference in stock with sufficient evidences and difference as found during the course of search is not real. At the time of search in the statements recorded, the assessee has cat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d addition on merit is also not sustainable. Thus the ground Nos. 1 to 3 of the assessee are allowed. 3.2 Briefly stated, the facts giving rise to this ground are that during the course of search a loose paper was found containing certain jottings of cash payments made towards the purchase of a commercial shop in Axis Mall, Jaipur. In the statements recorded during the course of search the assessee admitted that he alongwith his family members have purchased shop No. 6 in Axis Mall, Jaipur for a total consideration of Rs. 1,50,00,000/- out of which Rs. 1,07,38,727/- were paid through cheque and the balance amount of Rs. 57,52,100/- were paid in cash out of which Rs. 15,00,000/- were paid by the assessee and balance were given by Shankar Lal Pandey in whose company such property was purchased. The Ld. AR of the assessee submitted that the assessee has admitted additional income of Rs. 15.00 lacs towards the undisclosed investment in the acquisition of the above stated property and against which a sum of Rs. 17,95,000/- have been declared as additional income as a result of search in different assessment years on this account, therefore, there remained no unexplained investment. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal No. 1 to 3 above, the offer was based on the figures informed to the assessee and ultimately not binding on the assessee. Moreover assessee himself has accepted Rs. 15,00,000/- as undisclosed income and surrendered Rs. 17,95,000/- in his return i.e. more than what surrendered. Further copy of statement of Sh. Shankar Lal Pandey was not made available to the assessee, which has been made as basis of 50% addition in the hands of the assessee. Even statements recorded of the assessee do not support the contention raised by the revenue." 3.4 After considering the rival submissions, we have found that the impugned addition deserves to be deleted. Both the authorities below have ignored the fact that the assessee has already declared the additional income of Rs. 17,95,000/- in three different assessment years as detailed above in assessee's submission which include a sum of Rs. 10,30,000/- in the assessment year 2008-09. The amount of additional income declared by the assessee has been accepted by the AO and no adverse comment was made in the assessment order. The assessee against the admission of undisclosed investment of Rs. 15,00,000/- in the statements has declared income o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
