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TMI Blog2022 (10) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed income u/s 68 and 69 against the facts of the case and against the law and CIT(A) erred in conforming the same U/s 69 of the act, ignoring the fact that the said amount was not an income of the assessee nor any provision of section 68 and 69 were applicable to the case of the assessee because of surrender obtained during the course of survey U/s 133A on the basis of dumb document without corroborative evidence. Hence addition to the income is illegal, wrong & unlawful hence needs to be deleted. 2. Addition of Rs.l,00,00,000/- and Rs.3,11,56,849/- u/s 115BBE :- That the Ld. AO treated the surrendered amount of Rs.1 ,00,00,000/- as income u/s 68 against the law and against the facts of the case and CIT(A) erred in conforming the same, ignoring the fact that the said amount was business income and the Ld. AO wrongly applied section 115BBE and also the Ld. AO made baseless addition of Rs.3, 11,56,849/- u/s 115BBE against the facts of the case and against the law. Hence addition to the income is illegal, wrong & unlawful hence needs to be deleted. 3. Disallowance of genuine business expenses hypothetically treating as Fringe Benefit Tax:- That the Ld. AO erred in making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.1 crore being amount voluntarily offered by the appellant in its return of income in the following manner: Particulars Amount in Rs. Total income as per return of income 24,69,440/- Less: Undisclosed income offered for taxation, to be taxed at special rate u/s 115BBE 1,00,00,000/- Business loss of the current year (-)75,30,560/- Add: Addition on account of Fringe Benefit tax 21,59,044/- Business loss of the current year allowed to be C/F (-) 53,71,516/- Income disclosed to be taxed at special rate u/s 115BBE 1,00,00,000/- Add: Undisclosed income added to the total income not included in the return of income 3,11,56,849/- Total income on which tax is to be levied u/s 115BBE 4,11,56,849/- Tax demanded with interest 1,79,64,949/- 7. The case of the assessee before the authorities below and before us as well is this that the assessee by and under an affidavit dated 22.01.2016 filed retraction before the authorities below in respect of the income disclosed during the course of survey. According to the Ld.AO, the retraction is of no value. Since the document is not available, neither the assessee has been able to submit the said affidavit before the Ld.AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken at this juncture. In the show cause notice it has been elaborately discussed that the retraction of the statement recorded during the course of survey has to be in reasonable time. Therefore, the plea of the assessee cannot be entertained. In any case the documents found during the course of survey and excess stock found during the course of survey based on which the assessee has disclosed unaccounted income in his statement cannot be ignored. The argument of the assessee that the copy of statement supplied to him does not bear the signature of the authorized officer is not relevant because the statement has been recorded by the authorized officer which is duly signed by the partner of the Firm. Therefore, it cannot be said that the statement recorded from him is not correct. As regards the argument of the assessee that it is not understood as to what is the basis of valuation of stock, whether it is on LIFO or FIFO system or average rate has been taken is not relevant because the inventory of stock has been signed by the authorized person of the Firm to be correct. The rates of items have been taken as stated by the authorized person. Therefore, to challenge the same now is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income during Searches/Surveys conducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole and officers concerned in poor light. 13. The contents of the said circular further been reiterated in the subsequent circular dated 10.03.2003. 14. We have carefully considered the judgment relied upon by the Ld.AR. The crux of observation made therein are as follows: i Hon'ble Supreme Court Of India in the case of Commissioner of Income-tax, Salem v/s S. Khader Khan Son [2012] 25 taxmann.com 413 (SC) held that "Section 133A of the Income Act, 1961 - Survey - Whether Section 133A does not empower any ITO to examine any person on oath; so statement recorded under section 133A has no evidentiary value and any admission made during such statement cannot be made basis of addition - Held, yes [In favour of assessee]" ii. High Court Of Madh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any persons is available in the said diary . We find that in para No. 3.7 of the remand report the Ld. AO has stated that, "the impounded dairies are not dumb documents because there are names of the persons & also the amount of advances given to them" 16. The above contention of the Ld. AO has been claimed to be wrong & baseless by the appellant. However, we observe that merely name & amount does not constitute the details of advances given, in absence of:- i. Signature of the recipient ii. Signature of the person giving the loan iii. Signature of witnesses in whose presence the loan has been given iv. Address of the person to whom the loan has been given v. date of giving the loan, vi. rate of interest charged on the loan Therefore the onus to prove, in this case, lies upon the revenue and not upon the assessee. 17. It is the case of the assessee that the revenue has to prove the undisclosed income beyond doubt and the documents relied upon in making addition should be a speaking one. On this count the appellant relied upon the judgement passed by the Mumbai Bench in the case of S. P. Goyal versus Deputy Commissioner of Income Tax, reported in (2002) 82 ITD 85, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een taken by the different High Courts as it appears from the judgment as relied by the assessee. Moreso, it is a settled principle of law that the Revenue has to prove undisclosed income beyond doubt. So far as the document or loose paper or the diary as relied upon by the AO, while making addition is concerned, it is a well settled principle of law that the Revenue has to prove the undisclosed income without any room for doubt. The document relied upon should be a speaking one and should contain narration in respect of various figures noted therein. Unless the document contains full details about the dates and the contents thereof are supported by any corroborative material, cannot be relied upon for making addition. Thus, it is an admitted position, in the case in hand, firstly the basis of making addition is nothing but the statement given by the assessee during survey which has already been dealt with by us hereinabove and considering the order passed by different High Courts and the Hon'ble Apex Court, we find that the statement which has already been claimed to have been retracted by the assesse though the same has not been taken into consideration by the Revenue, even other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicability of section 115 BBE of the Act is concerned we find that the assessee is a partnership firm and other than individual. The only source of income of the assessee is the business income; unlike an individual partnership firm cannot have several source of income. It is further observed that the assesee had disclosed income of Rs 1 crore to buy mental peace. Business transaction, thus, in such circumstances, in our considered opinion the income cannot be said to be from undisclosed sources attracting section 115BBE of the Act. In this regard we rely upon the judgement passed by Hon'ble ITAT, Chandigarh in Famina Knit Fabs Vs. ACIT, ITA No. 14945/Chd/2017 order dated 08.02.2019: "Undisclosed income consisting of unaccounted receivables, sundry creditors & advances of business and gross-profit were business-income and section 115BBE was held to be not applicable." 23. Hon'ble ITAT, Guwahati in Abdul Hamid Vs. ITO (2020) 117 taxmann.com 986 held that section 115BBE is not applicable to the undisclosed income embedded in undisclosed business receipts / turnover. In these decisions and many other, the judicial view is that section 115BBE does not apply to the income, the sour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by section 40(a)(ic). 29. Ld. DR could not controvert the submission of assessee. 30. We have considered submission of both sides. Suffice it to say, that the assessee had repeatedly asked the Ld. AO to provide the source of FBT expenditure of Rs. 21,59,044/- as alleged. But the Ld. AO has not communicated to the assessee. However, the assessee has made working from P&L A/c and somehow calculated that the sum of Rs. 21,59,044/- is on account of total of certain expenses which are allowable under the act. We are satisfied with the submission of assessee. Accordingly, we delete the addition made by Ld. AO. This Ground is accordingly allowed. 31. In the result, assessee's appeal is partly allowed. ITA No. 911/Ind/2019 (M/s. Kanak Agro Infrastructure) 32. So far as the disallowance of interest of Rs.9,61,545/-, business expenses of Rs.5,60,686/- and Rs.8,25,010/- towards excessive purchases are concerned, we find that the assessee in spite of given several opportunities not filed any written submission before the authorities below. Hence these three additions are found to be sustainable in the absence of any written/oral submission filed before us. These three additions are, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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