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TMI Blog2024 (9) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... d therefore, as per mandate of that provision, they were binding upon the authorities below. Difference between the cash balance shown in the impounded cash book and as shown in the regularly maintained cash book on 08.11.2016 - AO vaguely whispered of some manipulation but failed to establish as such. However, the alleged difference was also explained by the assessee stating that various expenses on account of repair maintenance, business promotion, etc. were pending and could not be entered therein. We agree with the contention of the ld. AR Adv. Mahendra Gargieya that the survey was carried out mid of the year and it is not abnormal if various transactions remained to be recorded. The correct picture can be seen only after the completion of the accounts from all aspects, more particularly when they are audited. The ld. CIT(A) has already dealt with this issue but the revenue has not taken any specific ground on the aspect of the difference of Rs. 79.95 lakhs. We find no reason as to why the statement admitting the bank deposits as income (that too on behalf of the assessee but not even by the assessee) should be accepted. The alleged admission is claimed to have been retracted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Whether on facts and in circumstances of the case the CIT (A) is justified in not appreciating the incriminating documents found and impounded during the survey having all the incriminating information of incriminating transactions recorded therein and supported by the explanation and acceptance of Shri Naresh Jain in his statement recorded on oath u/s 131 during survey, as to be unaccounted transactions and those were the basis taken for making additions of Rs. 72,00,000/- deposited in cash in SBN in one instance. 2. Whether on facts and in circumstances of the case the CIT (A) is justified in deleting the addition of Rs 35,550/- appreciating the reply of the assessee which was only an after thought arrangement and not appreciating the overall facts and record of the case which should be taken all together ab initio from survey. 2.1 It may be noted that the present appeal is preferred by the Revenue against the order of CIT(A) dt. 29.01.2024. Since the ld. CIT(A) has already stated the relevant facts hence, the same are not being repeated here. During the course of hearing the parties were directed to file detailed written submissions in support of their oral arguments, if so de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 72,00,000/- deposited in bank account is out of cash in hand of Rs. 90.67 lacs and was earned from un-disclosed sources and offered the same for taxation. Our submission in this regard are follows. 4.2.1 Sole Statement, not a good basis for Addition: At the outset, we may submit that no addition can be made merely and solely on the basis of a statement of a third party. The ld. AO heavily relied upon the statement of the Shri Naresh Jain recorded u/s 131) on dated 02.02.2017 by the Survey Team. However, the credibility of such statements is highly doubtful and not binding for various reasons, as enumerated below: 4.2.2 No addition permissible solely based on statements : Pertinently, the impugned additions have been made solely based on the statement of the assessee without any corroborative evidence, and that too ignoring the retraction. It is settled that an admission cannot be made the sole basis of assessment since it is a matter of common knowledge that during the course of Search/Survey, the Revenue Authorities normally do exert unwanted pressure and influence over the assessee s to get something surrendered to make their survey a success. To expect the assessee to furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be quite relevant to refer to decision of Hon ble Gujarat High Court Kailashben Manharlal Chokshi vs. CIT (2008) 14 DTR 257/ (2010) 328 ITR 411 (Guj.) wherein, it was held as under: 22. It is also to be seen as to whether an addition made is merely based on the statement recorded by the AO under s. 132(4) of the Act and whether any cognizance may be taken of the retracted statement. So far as case on hand is concerned, the glaring fact required to be noted is that the statement of the assessee was recorded under s. 132(4) of the Act at midnight. In normal circumstances, it is too much to give any credit to the statement recorded at such odd hours. The person may not be in a position to make any correct or conscious disclosure in a statement if such statement is recorded at such odd hours. Moreover, this statement was retracted after two months. 26. In view of what has been stated hereinabove we are of the view that this explanation seems to be more convincing, has not been considered by the authorities below and additions were made and/or confirmed merely on the basis of statement recorded under s. 132(4) of the Act. Despite the fact that the said statement was later on retracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation about our connection with Allen Career Institute. The Officials of the survey team, recorded my statement from time to time to establish, that we have unrecorded transactions with M/s Allen Career Institute. Having not found anything incriminating with reference to our transaction with Allen Career Institute, they started looking into our personal affairs and pressurised me to give statement about my transactions/properties. 6. THAT I gave the statement as per my information and knowledge without any verification from the books of accounts. This statement continued from 2nd February, 2017 to 5th February, 2017 and my statement was recorded in more than 25 pages. The survey party impounded various documents, books and papers and asked me to sign each and every paper without providing me any opportunity to read what they have written in my statement and thus concluded the survey at around 3:30 AM on 5th February, 2017. I was so exhausted in this continuous survey that I signed the papers as required by the survey party. 7. THAT-on-7th February, 2017 from the media news on ETV News and Zee Marudhara, I came to know that the Income Tax Survey Party has sought a declaration of u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cific ground on this aspect nor the ld. DR could controvert these facts. 4.4 Legal Principles: 4.4.1 It is trite law that an admission, though best evidence against such person, if shown to be out of ambiguity, under tension or was against the facts or misconception of law, can be validly retracted. It has been held by the Hon ble Supreme Court in Pullangode Rubber Produce Co. Ltd. vs. State of Kerala Others 91 ITR 18 (SC): Such admission is an extremely important piece of evidence, but it cannot be said that it is conclusive. It is open to the assessee who made the admission to show that it is incorrect, and the assessee should be given a proper opportunity to show that the books of accounts do not disclose the correct state of facts . 4.4.2 The Hon ble Apex Court in Nagubai Ammal v/s B. Sharma Rao AIR 1956 (SC)593: held as under An admission is not conclusive as to be truth of the matters stated therein. It is only a piece of evidence, the weight to be attached to which must depend on the circumstances under which it is made. It can be shown to be erroneous or untrue . 4.4.3 In Rajesh Jain v/s DCIT (2006) 100 TTJ 929 (Del), held that computation of undisclosed income solely on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced by the Assessing Officer in his order there was remarks made by such director to the effect that material/document seized during the search does not belong to the PS i.e. 'SJSL', or belong to the assessee company. In this regard, there were no incriminating material against OP was found in the search. Further, section 153C emphasize that there should be material or document seized which belong to the OP. As such statement recorded during search is not a material or document found and seized. Therefore, the statement recorded under section 132(4) cannot be construed as material/document for invoking proceeding under section 153C specially, in the circumstances where no material of incriminating in nature found belonging to OP. [Para 8.4] The documents/any fact/evidence which could suggest that the documents/transactions claimed or submitted in any earlier proceedings were not genuine, being only a device/make belief based on non-existent facts or suppressed/misrepresented facts, fulfilling the ingredients of undisclosed income, would constitute the documents sufficient to make assessment for the purposes of the Act. The courts have referred such documents as an ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds lack on merit and legality both: It appears that the revenue has proceeded on serious misconception of fact and law while repeatedly alleging that the ld. CIT(A) has ignored the basic fact that the assessee had already admitted income on oath u/s 131, which contention appears totally contrary to the factual and legal finding recorded by the CIT(A) at pg 38: Applying the aforesaid legal proposition herein, I am of the opinion that admission is an extremely important piece of evidence though it is not conclusive.. Thus, the CIT(A) clearly held that the statement recorded on oath do have evidentiary value. However, thereafter the ld. CIT(A) also held that statement recorded during survey is not conclusive and also recorded categorical finding of fact that the corroborative material used by the AO wherein the assessee admitted, was fully explained and thereafter, in absence of any other corroborative evidence such admission alone could not be made a basis of the addition. Therefore, it is wrong to say that the CIT(A) completely ignored the admission made by the assessee. 5.2 Prayer u/r 27 of the ITAT Rules, 1963: Though, assessee is not in appeal or co. against such findings of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oath before the commencement of Survey or during Survey. However, if recourse is taken to section 131(1), during the survey, a statement can be recorded on oath, as the powers to record a statement on oath are vested in the authority u/s. 131(1) read with section 133(6) and in the circumstances specified u/s. 133(6) only. 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. 6.2 Further, the statute has provided different provisions looking to the different factual situations as regard recording of the statement, somewhere on oath and somewhere without oath, u/s 132(4) (in such matters), u/s 133A(3)(iii) (in survey case) and u/s131 (for general inquiry). These provisions operate independently in their respective fields and cannot be used interchangeably. S.133A(3)(iii) is separate and independent from S. 131, as evident from the further fact that S. 133A (6), refers to use of the powers u/s 131 only in a given fact situation (as stated above), which manifests the legislative intention that statement of the assessee can be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 132(4) of the Act states that the authorized officer may, during the course of search and seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, monies, bullion, jewellery... and that any statement made during such examination may be used thereafter in evidence in any proceeding under the Act. On the other hand, Section 133A does not talk of the recording of any statement on oath. Under Section 133A (3) (iii), the Income Tax Authority acting under the said provision could record the statement of any person which may be useful for, or relevant to, any proceeding under this Act. Therefore, there is a considerable difference in the nature of the statement recorded under Section 132(4) and that recorded under Section 133A(3)(iii) of the Act. 41. This distinction was noticed by this Court in Dhingra Metal Works (supra). The Court there referred to the decision of the Kerala High Court in Paul Mathews Sons v. CIT [2003] 263 ITR 101/129 Taxman 416 and of the Madras High Court in S. Khader Khan Son (supra) and observed that the word 'may' occurring in Section 133A(3)(iii) of the Act clarifies beyond doubt that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )-misinterpretation of law: 7.1 In this regard it is submitted that, such a contention, on a bare perusal of the related provision, is completely devoid of merit and rather a misreading and misinterpretation of the provision. During survey statements are recorded u/s 133A(3)(iii) of the Act only. However, recourse u/s131 (1) can be taken only if S.133A(6) is invoked. For ready reference S. 133A (6) is being reproduced hereunder: (6) If a person under this section is required to afford facility to the income-tax authority to inspect books of account or other documents or to check or verify any cash, stock or other valuable article or thing or to furnish any information or to have his statement recorded either refuses or evades to do so, the income-tax authority shall have all the powers under [sub-section (1) of section 131] for enforcing compliance with the requirement made : [Provided that no action under sub-section (1) shall be taken by an Assistant Director or a Deputy Director or an Assessing Officer or a Tax Recovery Officer or an Inspector of Income-tax without obtaining the approval of the Joint Director or the Joint Commissioner, as the case may be.] A bare perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered the documentary evidences, furnished by the assessee, with a view to explain the impounded document and clarify the admission made, hence, it can't be said that the CIT(A) granted relief only and only on the legal aspect (that statement recorded during survey u/s 133A(3)(iii) and/or u/s 131, has no evidentary value and not being conclusive, no addition can be made merely on that basis). On the contrary, it is discernible from his findings in all the 4 cases, where he has granted relief, he has extensively dealt with the merits of each case for examining the impounded documents, explanation of assessee, remand report and rejoinder etc., independently. Thus, under totality of the facts and circumstances detailed above, the CIT(A) order rightly deleted the addition. Therefore, this ground taken by the revenue deserves to be dismissed here itself. 8. Source established being cash withdrawal - No scope for suspicion: 8.1 A pertinent aspect of the matter is that, the assessee has been engaged in the business of Advertising agency since 1989 . During the impugned year total Turn Over of the assessee was Rs. 43,02,93,389/- from newspapers, hoarding and others. During the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) order). Thus, cash withdrawals were made out of business receipts. Further, as per books of accounts, physical Cash in hand as on 13.11.2016, was Rs 77,14,269/- (APB 217-219), assessee duly produced copy of Cash Book during Assessment, Remand and Appellate proceedings (copy enclosed with this submission also). Notably, there is no negative cash balance in the books of accounts on any date during the impugned year, much less prior to the demonetization period which fact was not rebutted by lower authorities. Thus, allegation of an afterthought is absolutely without any basis and a mere suspicion. 8.3 Availability of funds cannot be denied: The Hon ble High Courts and the Tribunals in different factual situations have considered the availability of the cash when the Dept. failed to establish that such cash (which was available on account of withdrawal from the banks or sale proceeds of the goods traded, the jewellery and so on) stood utilized elsewhere and have held that no addition can be made. 8.4 In the instant case, in view of the undisputed fact of sufficient cash availability from the sales, immediately prior to the subjected bank deposits, the AO was not supposed to doubt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time of search was withdrawn from the bank some time back which was partly used for purchasing gold and part of the amount was given by the assessee to his wife There is nothing to suggest the utilization of the withdrawal amount elsewhere Said withdrawal is duly reflected in the cash flow statement and closing cash balance is more than the amount found at the time of search Thus, addition cannot be sustained 9. Double Taxation Not Permissible: 9.1 It is submitted that the impugned addition, so made, has resulted into double addition in as much as the fact is not denied that the receipts from Advertising by the assessee were duly booked and the turnover was around Rs. 43 Cr. from news papers, hording and otherwise also during the impugned year and upto 12.11.2016 total business receipts is of Rs 30 Cr. which has been duly accounted for in the cashbook on a day to day basis and it is only out of the same, the subjected cash deposits were made. The amount so received was duly considered while preparing the P L account and the net income based hereon has already been declared and tax paid thereon. Once the assessee has already declared the very source of the cash deposits being its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e number it does not make the sale as non-genuine and we find support of this contention from the decision of the jurisdictional high court in the case of Smt. Harshil Chordia Vs. ITO reported at 298 ITR 349 (Rajasthan-HC)(supra) we do not find any merits on the finding of the ld. AO and that of the ld. CIT(A) in disbelieving the sales recorded by the assessee as the sales is in course of business is duly supported by the invoice and delivery of the goods recorded in the books of the assessee. The cash is generated out of the stock already on record and thus the sales made by the assessee company is genuine sales recorded in the books of account. All the details required to prove the sales made by the assessee were provided in the assessment proceedings. Now on the part of the receipt of the cash from the customer the jurisdiction high court judgement in the case of Smt. Harshil Chordia Vs. ITO reported at 298 ITR 349 (Rajasthan-HC) held that . 9.3.3 In the case of Rachit Aggarwal (Prop.), Ashok Kumar Gupta Co. vs ITO (2024) 162 taxmann.com 49 (Chandigarh - Trib.), the Hon ble ITAT held as under: Section 68 of the Income-tax Act, 1961 - Cash credit (Others) - Assessment year 2017-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anks more or less corresponded with cash sales, it could only be concluded that there was growth in assessee's business and impugned addition was to be deleted - Held, yes [Paras 16.9 and 17.6] [In favour of assessee] Thus, the assessee has already offered the sales receipts for taxation hence the onus has been discharged by it and the same income cannot be taxed again. 9.3.5 In the case of PCIT vs. Dilip Kumar Swami [2019] 106 taxmann.com 59 (Raj) it was held that: Assessee filed his return declaring certain taxable income - In course of assessment, Assessing Officer noted that assessee had deposited certain amount in his bank account - On being enquired about source of said deposit, assessee explained that it represented amount received from various purchasers against sale of goods i.e., tractors and accessories thereof - Assessing Officer accepted assessee s explanation and completed assessment - Commissioner taking a view that cash deposits not being satisfactorily explained, passed a revisional order setting aside assessment - Tribunal, however, set aside revisional order so passed - It was noted that order passed by Assessing Officer that deposits stood reconciled was pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was not open to the Revenue to challenge the correctness of the cash book entries or the statements made by those deponents in their affidavits. ---------xxxxxx--------xxxxxx------xxxxxx------- A mere calculation of the nature indulged in by the Income-tax Officer or the Appellate Assistant Commissioner was not enough, without any further scrutiny, to dislodge the position taken up by the appellants, supported as it was, by the entries in the cash book and the affidavits put in by the appellants before the Appellate Assistant Commissioner. ---------xxxxxx--------xxxxxx------xxxxxx------- To put the matter in a nut-shell, the accounts of the appellant have been accepted by the Tribunal as genuine, and it is impossible to say, having regard to the cash balance as shown therein, that the notes in question could not have been included therein. The Tribunal observes that it is unlikely that so many high denomination notes would have been held as part of the cash on hand for a such a large number of days. That, no doubt, is highly suspicious; but the decision of the Tribunal must rest not on suspicion but on legal testimony . 9.4 Alternatively, even assuming all the contentions raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45 of the Act, as in this case. In other words, he felt satisfied with the books of accounts maintained by assessee and duly audited and produced before him and therefore feeling satisfied, he did not reject the same. Once this is the admitted fact, there is no reason as to why the AO must have alleged that the regularly maintained cashbook as unreliable. 11.2.2 The ld. AO, no doubt, raised an objection at Pg.3 of order (also reproduced at pg 8 of CIT(A) order) that: During assessment proceedings the appellant has produced copy of cash books for the relevant year. As per cash book cash balance as on 08/11/2016 was Rs. 77,66,469/- ; however, as per Annexure-8, page No 8, copy of cash book for F/Y 2016-17, the cash balance was Rs. 1,57,62,376/- on 08/11/2016. Therefore it clearly shows that cash books maintained by the appellant and submitted during assessment proceedings are different than the cash book found during survey action. Hence it is considered that the appellant has manipulated the figures in cash book, therefore the contents of cash book are not reliable, hence reply of appellant on the basis of cash in hand is not found satisfactory However, there is no much force or sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent stages) there was no other reason not to accept the book results of the records kept addition by way of estimate not permissible. d. Merely by comparison of the percentage of loss in a particular year, we do not think it is possible to say with any reasonable certainty that the increase in the percentage of loss must be attributable and must lead to a reasonable inference of suppression of production of yarn. e. Higher wastages alone was no ground for rejecting the claim for wastage 11.3.2 CIT vs. Maharaja Shree Umaid Mills Ltd. 192 ITR 565 (Raj.) The Tribunal was justified in holding that since the books of account had not been rejected the mere fact that there had been a fall in the gross profit rate would not lead to the inference that the expenditure had been inflated. No question of law arose form the order of the Tribunal. 12. Addition u/s 69A not mandatory: 12.1 In this regard it is submitted that from the analysis of S.69A reveal that addition of amount can be called for when the said sum is found not recorded in the books of accounts maintained by the assessee and the assessee offers no explanation about the nature and source of such amount. But undisputedly in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttled that suspicion, however strong, cannot take the place of reality. Thus, the impugned additions have been made merely on suspicion, impugned addition deserves to be deleted here itself. Kindly refer Dhakeshwari Cotton Mills v/s CIT (1954) 26 ITR 775 (SC), wherein it is held as under: Assessment Validity ITO is not barred by technical rules of evidence and pleadings, and he is entitled to act on material which may not be accepted as evidence in a Court of law, but in making the assessment under sub-s. (3) of s. 23 the ITO is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all There must be something more than bare suspicion to support the assessment under s. 23(3) ITO and the Tribunal in estimating the gross profit rate on sales did not act on any material but acted on pure guess and suspicion In arriving at its estimate of gross profits and sales Tribunal should give full opportunity to the assessee to place any relevant material on the point that it has before the Tribunal, whether it is found in the books of account or elsewhere and it should also disclose to the assessee the material on which the Tribunal is goin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions, the remand report, rejoinder made before him, at Page 6, Para. 4.6 concluded in following words: 4.6 I have considered the submission of Ld. A/R and carefully gone through the material available on record. The AO reported that during the survey proceedings, Shri Naresh Jain husband of assessee and main person dealing with financial transactions had declared Rs. 2,00,00,000/- as undisclosed income on account of bogus expenses in the hands of applicant in various years and same has been declared on the basis of incriminating documents. Accordingly, an amount of Rs. 1,71,72,858/- and Rs. 27,91,592/- has been added to the total income of the assessee for the A.Y. 2015-16 A.Y. 2016-17 respectively. Therefore the balance amount of Rs. 35,500/- [Rs.2,00,00,000/- minus (Rs.1,71,72,858+ Rs. 27,91,592)] was added to the total income of the assessee for the A.Y. 2017-18 as accepted and surrendered during survey action i.e. 02.02.2017. Hence, if the addition of Rs. 1,71,72,858/- for the A.Y. 2015-16 has been considered at Rs. 1,81,18,746/- and addition of Rs. 24,69,065/- (after giving relief of Rs. 3,22,527/- out of total addition of Rs. 27,91,592/-by the Worthy CIT(A)-2, Udaipur) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urvey proceedings, it was alleged that Shri Naresh Jain declared Rs. 2 Crore as undisclosed income on account of bogus expenses in the hands of applicant in various years and same has been declared on the basis of incriminating documents. Accordingly, an amount of Rs. 1,71,72,858/- and Rs. 27,91,592/- has been added to the total income of the assessee for the A.Y. 2015-16 A.Y. 2016-17 respectively. Therefore the balance amount of Rs. 35,500/-[Rs.2,00,00,000/- minus (Rs.1,71,72,858 + Rs. 27,91,592)] was added to the total income of the assessee for the A.Y. 2017-18 as merely because same was alleged to be accepted and surrendered during survey action i.e. 02.02.2017. On this aspect ld. AO submitted his comment in remand report (also at pg.6 of CIT(A) order) reproduced hereunder: Hence, if the addition of Rs. 1,71,72,858/- for the A.Y. 2015-16 has been considered at Rs. 1,81,18,746/- and addition of Rs. 24,69,065/- (after giving relief of Rs. 3,22,527/- out of total addition of Rs. 27,91,592/-by the Worthy CIT(A)-2, Udaipur) has also been considered, then the aggregate addition become Rs. 2,05,87,811/- (17172858+2469065), which already exceeded the total undisclosed income of Rs. 2,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO in the assessment order and in the remand report, after consideration of the written submissions and the rejoinder filed by the assessee. We have also gone through the assessment order, the oral and written contentions raised by the parties and the judicial precedents cited at bar. Hence, for these reasons and also for the reasons stated hereinafter, we are in full agreement with the findings so recorded by the ld. CIT(A). The relevant observations of the ld. CIT(A) made in his order at page 54 , para 5.11 are reproduced in following words. 5.6 I have considered the submission of Ld. A/R and carefully gone through the material available on record. 5.6.1 The AO noted that during survey the physical cash in hand was found at Rs. 2,08,000/- where as tally printout the cash in hand as per books of accounts of M/s Quick Advertising Co was Rs. 90,67,052.91/-. An incriminating documents was seized, Sh. Naresh Jain husband of the appellant Mrs. Nisha jain explained that these documents were the cash book of M/s Quick Advertising Co for the period 01.04.2016 to 20.01.2017 whose proprietor was the assessee, Smt. Nisha Jain (Wife of Shri Naresh Jain) and the cash balance as per this in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1973] 91 ITR 0018, the legal position in relation to a statement under section 132(4) of the Income-tax Act, 1961 was set out as under : ------xxx------xxx------xxx------xxx------xxx------xxx------ Applying the aforesaid legal proposition herein, I am of the opinion that admission is an extremely important piece of evidence though it is not conclusive. On the issue of retraction of statement recorded during search Hon ble High Court Of Madras in the case of Thiru. A.J. Ramesh Kumar v. Deputy Commissioner of Income-tax [2022] 139 taxmann.com 190 (Madras) noted as under ------xxx------xxx------xxx------xxx------xxx------xxx------ In this case, the retraction is with sufficient, credible and corroborative evidence to support his claim. It is also to be noted that in the original statement also the claim of the assessee was that the expenses of M/s Quick Advertising Co had not yet been posted as noted by the AO in the assessment order. When Mr. Naresh Jain was asked to produce bills, vouches etc for unposted expenditure, he submitted that such documents could not be made available. Non furnishing of expenditure vouchers was a serious lapse on the part of the assessee. However, it is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an affidavit. It is argued that Shri Naresh Kumar Jain has duly retracted from his statement which was given under mental unconsciousness, pressure and fatigue and just within 4 days (The relevant stamp paper was purchased on 07/02/2017, executed on the same day i.e 07/02/2017 and notarized on 14/02/2017) of recording of his statement the appellant vide affidavit dated 14.02.2017 filed before the ADIT(Inv.) on 06.04.2017 retracted the same and as such the statement does not have any evidentiary value. It is argued that it is well settled in law that presumption u/s 292C of Income Tax Act 1961 is rebuttable presumption. Even if such presumption is drawn against an assessee the same is rebuttable and the person against whom such presumption is drawn is free to lead evidence to rebut such presumption and when that is done, the officer or authority shall consider all the evidence and facts judiciously. 5.6.3 Considering facts of the case, a remand report was asked from the AO. The AO was asked to verify the claim of the appellant that the cash deposited during demonetization was out of bank accounts which are part of regular books of account. The AO was asked to verify whether the cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is not considered, in the original statement also the claim of Sh. Naresh Jain was that the expenses of M/s Quick Advertising Co had not yet been posted. From the reading of statement, it is noticed that the books of accounts were not updated at the time of survey. Now, the appellant has furnished the source of cash deposited during the period of demonetization. Therefore, considering these facts, the addition made by the AO is not found to be sustainable. The addition made of Rs. 72,00,000/- is deleted accordingly. Since, the addition is deleted, other issues raised by the appellant do not require adjudication and treated as disposed of. This ground of appeal is treated as allowed. 3.3 It is noticed that during the survey a document being Ann. A, page no. 1 to 50 was found (APB 54-104). This is a cash book maintained by M/s Quick Advertising Company, a proprietary of the assessee, for the F.Y. 2016-17 starting for the period from 01.04.2016 to 20.01.2017,copy of which is placed at APB 54104. The said cash book at page 8 was showing cash in hand balance of Rs. 1,57,62,376/- on 08.11.2016. It is noticed that right from the very beginning Naresh Jain has been explaining the sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aspect of the allegation of difference is nothing but a suspicion and not at all material. To repeat, the AO completely failed to point out any substantial mistake in the regular cash book produced during assessment proceedings. The ld. CIT(A) called for a detailed remand report from the AO on all the relevant aspects as stated in Para 5.6.3 and pertinently, the AO has clearly certified, after due verification of the entire record including the cash book that all entries in the cash book are duly supported with the bills and vouchers and that the same also shows the entries of the cash deposits in the bank. He also admitted that the cash balance on 13.11.2016 was of Rs. 77,14,269/- (APB 218) against which cash deposit on 13.11.2016 was only of Rs. 72,00,000. The AO has not shown utilization of such cash balance elsewhere. Thus, even assuming for a moment that there was admission made by the assessee (which aspect we are dealing hereinafter) we find no justification behind the addition made on merits of the case, for the reasons stated above. Without prejudice to our findings recorded on merits, we shall now deal with the admission of Shri Naresh Jain. For this purpose reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le and corroborate evidence to support the claim of the assessee. We have also carefully considered the claim of filling retraction; however, in view of the contrary claim raised, we are not going into this controversy. However, we find that the ld. CIT(A) was justified in its approach. In the ultimate analysis taking a conspectus view of the entire facts circumstances and the legal position, we find no perversity in the order of the CIT(A). There is no case made out by the revenue to reverse the findings of the first appellate authority. Hence this ground No. 1 of the revenue is hereby dismissed. 4.1 In the ground of appeal no. 2 taken by the Revenue, the deletion of an addition of Rs. 35,550/- made by the AO on account of undisclosed income surrendered during the survey is under challenge. We have carefully considered the rival submissions in the light of the judicial precedents cited by the parties. We have also carefully gone through the findings recorded by the AO in the assessment order and also the detailed findings recorded by the ld. CIT(A). After careful consideration of the entire matter, we find no substance in this ground taken by the revenue in view of the detailed fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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