9911796707
TMI Blog2018 (2) TMI 1804X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has not found anything amiss with the quality of audited account books or the supporting documents, which were available on record and, therefore, in our view, there was no justification for having rejected the income deduced by the assessee from the project in its return of income. Accordingly, we hereby set-aside the order of CIT(A) and direct the Assessing Officer to delete the addition - decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... Occupancy Certificate issued by the Municipal Corporation on 31.10.2005. Since no income thereof has been declared by the assessee, in the statement recorded a question was put to the assessee with regard to the same. In response, assessee submitted that no return of income for Assessment Years 2004-05, 2005-06 and 2006-07 were filed and that the income from said project could be computed by estimating it on the basis of the Work-In-Progress (WIP) declared for Assessment Year 2003-04. Therefore, the assessee declared an income of ₹ 1,00,00,000/- from the said completed project, and in the answer at the time of survey, the working thereof was also enumerated, which is reproduced hereinafter :- "Declared closing WIP as on 31/03/2003 Rs.2,43,36,202/- Add. Estimated expenses towards Construction from A.Y. 04/05 To A.Y. 06/07 Rs.6,00,000/- Total Closing WIP As on 31/03/2006 Rs.2,49,36,202/- B) Sale proceeds from sale of flats Rs.3,47,12,500/- C) Income from project (B-A) Rs.99,76,298/- This working gives income from project of ₹ 99,76,298/- therefore, I declare income of Rs. One Crore from the completed project for the A.Y 06/07." Subsequently, the assessee fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,00,00,000/- made at the time of survey was binding on the assessee and the same could not be retracted. Further, the Assessing Officer noted that the retraction, if at all permissible, was delayed and, therefore, the same could not be accepted. Thirdly, the Assessing Officer noted that the assessee was called up to produce the books of account and the relevant documents, which were not so produced, therefore, the Assessing Officer concluded that assessee ought to have declared the income from project at ₹ 1,00,00,000/- as against ₹ 25,36,440/- declared in the return of income and thus, he added back the sum of ₹ 74,63,557/- to the returned income. The CIT(A) has also affirmed the addition made by the Assessing Officer, against which the assessee is in further appeal before the Tribunal. 5. Before us, the learned representative for the assessee vehemently pointed out that the addition has been made by the lower authorities solely on the basis of the statement given at the time of survey, which is impermissible in law. With regard to the fact-situation, it was brought out that the difference between the amount of income declared during the survey vis-a-v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was liable to be declared during the previous year relevant to the assessment year under consideration, i.e. 2006-07. The manner in which assessee proceeded to offer the income at the time of survey, on an estimate basis has already been reproduced by us in the earlier part of this order. Quite clearly, the estimation is based on the value of the WIP as appearing on 31.03.2003, and the expenses have also been estimated for Assessment Years 2004-05 to 2006-07. Assessee adopted the sale proceeds of the project at ₹ 3,47,12,500/- and, after computing the total expenditure of ₹ 2,49,36,202/- (comprised of WIP as on 31.03.2003 of ₹ 2,43,36,202 + expenses for Assessment Years 2004-05 to 2006-07 of ₹ 6,00,000), the income of the project was determined at ₹ 99,76,298/- and thereby an income of ₹ 1,00,00,000/- was declared. Quite clearly, the income offered at the time of survey was on an estimate basis, which cannot be disputed by the Revenue. 8. Now, we may come to the stage when assessee filed his return of income on 29.03.2007, wherein an income of ₹ 25,36,440/- was declared. Notably, the return of income was accompanied by the statement of to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords, as per the Hon'ble Supreme Court, the admission made on an anterior date, which was not based on correct state of facts, was not conclusive to hold the issue against the assessee. In our considered opinion, in the present case, the stand of the assessee is much more convincing since the original declaration itself is not based on any books of account or supporting documents, but was merely an estimate, whereas the return of income has been filed on the basis of audited accounts and the principal areas of difference, namely, the amount of sale proceeds and the expenditure are duly supported by relevant documents. The Assessing Officer notes in the assessment order that the books of account and the supporting vouchers were not produced, an aspect which has been contested by the assessee. So, however, even if one is to go along with the said observation of the Assessing Officer, yet, we do not find the same to be of any merit because during the course of remand proceedings directed by the CIT(A), assessee had produced the relevant material, which was thus available to the Assessing Officer for verification. At page 276 of the Paper Book is placed a list of documents which we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Sec. 133A and 132(4) of the Act was noted and it was held that the statement u/s 133A of the Act would not have any evidentiary value. In fact, as per the Hon'ble Supreme Court, such a statement made at the time of survey could not be the sole basis for assessing income in the hands of the assessee. On this aspect, we may also refer to the Circular of CBDT no. 286/2/2003 (Inv.) II dated 10.03.2003, wherein it has been observed that the assessments ought not to be based merely on the confession obtained at the time of search and seizure and survey operations, but should be based on the evidences/material gathered during the course of search/survey operations or thereafter, while framing the relevant assessments. In the present case, apart from the statement at the time of survey, there is no material referred to, which has been obtained during the survey, which supports the estimation of income from the project at ₹ 1,00,00,000/-. In fact, the assessment order does not bring out any material other than the statement of the assessee, which the Assessing Officer gathered during the assessment proceedings which could negate the income deduced by the assessee in its return o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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