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TMI Blog2022 (9) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... polation is not logical for determining the actual total Income and it is established law that the assessment should be made on the basis of only incriminating documents found during the course of survey proceedings. We find that the finding of the ld CIT(A) is based on sound reasoning that the incrimination material was found for the month of Feb-2014 and the income for remaining months was estimated, which may be differ, depending on various factors. Before, us the assessee vehemently argued that the NP ratio of the assessee for this year is substantially higher comparative to earlier years - we find that the ld CIT(A) restricted the addition of considering all the facts and the evidence on record. In view of the above discussions, we do not find any merit in the grounds of appeal raised by the assessee, thus, we affirm the order of ld CIT(A). In the result, the grounds of appeals raised by the assessee are dismissed. Penalty u/s 271(1)(c) - HELD THAT:- CIT(A) while deciding the appeal in quantum assessment held that the assessee has already declared income on higher side compared to the earlier assessment year. In our view the additions in the quantum assessment was rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustaining the penalty on addition of Rs. 6,33,339/- out of total addition of Rs. 35,00,000/- on account of alleged unaccounted business receipts. 2. On the facts and circumstances of the case as well as law on the subject, the learned Assessing officer has erred in not specifying in the notice u/s 271(1)(c) r.w.s. 274 or in the assessment order or in the penalty order whether the penalty was leviable for concealment of particulars of income or for furnishing inaccurate particulars thereof. 3. It is therefore prayed that penalty levied by the Assessing Officer and confirmed by CIT(A) may please be deleted or the matter may please be set aside to the file of CIT(A). 4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. 4. Brief facts of the case are that assessee is proprietor of Niti Pathology Laboratory, filed its return of income for A.Y. 2014-15 on 29/11/2014 declaring income of Rs.23,74,710/-. The case was selected for scrutiny. During assessment, the assessing officer noted that a search action under Section 132 of the Act was carried out on 04/03/2014 in case of Medical Professionals Group, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Rs. 35.00 lacs in the income of assessee and also initiated penalty under section 271(1)(c) of the Act. 6. Aggrieved by the additions made in the assessment order, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed her detailed written submissions. The submission of assessee are recorded in para 5 of impugned order. In the written submission, the assessee has stated that she had made retraction and an affidavit was also filed but the copy of retraction letter was not traceable. During the course of survey proceedings, the loose papers related to only one month was found on the basis of which the gross receipt of the whole year was estimated, which itself was an adhoc estimation without any base whatsoever and therefore, the estimation of additional income on such method was completely baseless. As such, the statement recorded during the course of survey proceedings has no evidentiary value. The assessee has also stated that during the course of survey proceedings, no incriminating documents were found except some loose papers wherein daily records of laboratory tests conducted of different persons and the amount of testing charges fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... papers related to the Feb-2014, the gross receipt was estimated at Rs. 76,00,078/- In the previous year the assesse has shown gross receipt of Rs. 42,90,650/- and the gross receipt in the current assessment year is more. The assessee also furnished the total gross receipt, gross profit, net profit and net profit ratio in the following manner; AY Gross receipt (Rs.000/-) Net Profit (NP) % (NP) 2014-15 69,15,375/- 24,22,016/- 35.02 2013-14 42,90,650/- 8,20,860/- 19.13 2012-13 39,60,317/- 7,52,474/- 19.00 2011-12 28,98,022/- 7,02,448/- 24.24 2010-11 21,65,052/- 5,10,199/- 23.57 8. On the basis of aforesaid details, the assessee contended that the assessee has shown higher income as committed by her during the survey action and truly and fully disclosed the actual gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry value and no addition can be made on the basis of such statements and that the assessee had not made a total retraction from declaration made by her and the affidavit filed was of clarificatory nature whereby, the assessee conveyed the fact that the declaration made through statement during survey proceedings was conveying her intention of declaring enhancement of gross professional receipts of the current year and the working made during survey on the of basis of receipt of one month was not correct and the assessee had filed her correct return of income. The ld. CIT(A) has held that the loose papers and incriminating papers were found only for the month of Feb,2014, which was quantified as Rs.6,33,339/-. The method of extrapolating and estimating the gross profession receipts of Rs. 76,00,000/- for the entire year is not logical as the same cannot remain consistent all throughout the year. The ld. CIT(A) has held that he is agreed with the contention of the assessee that the actual receipt for the whole year is bound to differ from month to month and variations are possible depending on seasons, climatic changes, festivals, vacations, etc. and the gross receipts cannot be the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . And as per answer to the question No.12, the assessee offered Rs. 35 lacks. During the survey incrimination material only for the month of Feb-1014 was found. The books of the assessee on the date of survey was not complete. No other incrimination material was found during the survey. The estimation of survey team on ad-hock basis was just an estimation which cannot be compared with the actual receipt, the actual receipt always differs in the other months. The assessee has stated the Assessing officer has wrongly made the addition of gross amount of professional receipt on estimated basis of the entire year without appreciating the fact that only the income profit element embedded therein can be taxed. Though, he ld CIT(A) granted partial relief to the assessee by accepting the fact that the assessee has shown substantial increase in her return of income. However, he missed the fact that only profit element in the alleged unaccounted receipt of Feb-2014 was to be taxed and not the entire receipt. The assessee has shown profit ratio of more than 35%, which was very high compared with the earlier years and at the most the profit ratio declared by the assessee may be taxed from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t profit of the assessee. On comparison of the return if income for earlier years, the ld CIT(A) held that the assessee has offered substantially higher gross professional receipts of Rs.69,15,375/- as against Rs, 42,90,650/- shown in earlier year. Thus, effectively the assessee has offered additional receipts of Rs.26,24,725/- as actually earned by her against the alleged difference of Rs.33,09,438/- on the basis of extrapolation method. It was also held that the theory of extrapolation is not logical for determining the actual total Income and it is established law that the assessment should be made on the basis of only incriminating documents found during the course of survey proceedings. 15. The ld CIT(A) noted that that during survey, the incriminating material was found indicating the amount of Rs.6,33,339/- for the month of February,2014 and therefore the addition should be restricted to that amount only considering the fact that the assessee has offered higher gross professional receipts in her return of income in the spirit of her statement recorded. The ld CIT(A) held that addition of Rs.6,33,339/- would serve the purpose to cover the difference between the yearly esti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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