9911796707
TMI Blog2024 (9) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... aspects. Thus, following the findings recorded in the order A.Y. 16-17 as aforesaid, prayer of the assessee is decided in its favour whereas part of the ground no. 1 6 taken by the Revenue are decided against the Revenue. Addition made by the AO stated to be based on the impounded annexure and the statement of the Assessee record during the survey - There is no dispute with regards to the source of payment of total purchase consideration including all expenses at Rs. 64.18 lacs out of which Rs. 29.58 lacs paid through cheque and Rs. 33.60 was paid in cash. Further, Rs. 1 lac was paid towards stamp charges details are available at APB 85, which is a copy of the ledger account in the books of M/s Quick Advertising Company. AO never held the assessee to be the benamidar of Smt Nisha Jain. These facts and findings could not be rebutted by the D/R. Further heavy reliance is placed on the statement of the assessee recorded during the survey u/s 133A is completely misplaced. In the case of Naresh Jain [ 2024 (9) TMI 505 - ITAT JAIPUR] for A.Y. 2016-17, we have already dealt with this issue in detail of our order dated 05-08-2024 (Reproduced hereinabove) holding that survey statement alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor he rejected the books of accounts. We have also seen the impounded documents relied upon by the AO however, we find that no blind reliance could be placed on the statement of the assessee, alleging admission because in the same very statement, he clearly stated that he was not in a position to tell the exact amount of expenditures recorded in the accounts. Further, we find that the ld. CIT(A), recorded categorical findings of fact after verification of the record, and obtained a remand report from the AO, wherein nothing substantial adverse was found and he rightly deleted the addition to the extent of Rs. 27,97,131/- and the balance addition of Rs. 7,02,869/- has been upheld. Therefore, the ground No. 4 of the Revenue is dismissed. Addition of marriage expenditure - Mere rough-jottings, and in the shape of mere estimations, and does not inspire any confidence and has lost relevance in the light of the fact that the related marriage expenses had already been recorded in the accounts. No blind reliance could be placed on the statement of the assessee, alleging admission by the assessee because in the same very statement, he clearly stated that he was not in a position to tell t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby deleted. The assessee thus get relief of Rs. 2,59,618/-. Hence this ground of the Revenue is dismissed whereas the prayer of the assessee as aforesaid, is hereby allowed. - Shri Sandeep Gosain, JM And Dr Mitha Lal Meena, AM For the Revenue : Shri A.S. Nehra, Addl. CIT-DR For the Assessee : Shri Mahendra Gargieya Adv, Shri Hemang Gargieya, Adv. ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the Revenue is directed against order of the ld. CIT(A), Udaipur-2 dated 29-01-2024 for the assessment year 2017-18 raising therein following grounds of appeal. 1 Whether on facts and in circumstances of the case, the Lad. CIT(A) is justified in ignoring the evidential basis of additions of Rs. 1,83,20,000/- available to the AO in the form of incriminating documents found and impounded during the survey containing all information of incriminating transactions recorded therein and further supported by the explanation and admission of Sh. Naresh Jain, in his statement recorded on oath us 131 during survey, who accepted these transactions to be unaccounted. 2 Whether on facts and in circumstances of case, the Ld. CTT(A) is justified in deleting addition of Rs 33,60,000/- made by AQ on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the statement recorded during the survey 7 Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in giving telescoping effect to the assessee to set off Rs 46,43,251- against the sustained addition Rs. 49,02,869- resulting in sustenance of remaining additions of Rs. 2,59,618/-only. 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 desired. However, the ld.DR supported the order of the AO. To this effect, the ld. AR of the assessee has filed the following written submissions countering the grounds of appeal raised by the Revenue. Submission: 1.1 Revenue s grounds 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate Tribunal - Appealable orders (Aggrieved person) - Assessment year 2008-09 - Whether rule 27 embodies a fundamental principal that a respondent who may not have been aggrieved by final order of lower authority or court, and therefore, has not filed an appeal against same, is entitled to defend such an order before Appellate forum on all grounds, including ground which has been held against him by lower authority, though final order is in its favour - Held, yes - Whether where assessee succeeded before Commissioner (Appeal) in ultimate analysis and was, thus, not an aggrieved party, in Revenue's appeal, Tribunal committed a mistake by not permitting assessee (respondent before it) to support final order of Commissioner (Appeal) by assailing findings of Commissioner (Appeal) on issues that had been decided against him - Held, yes[Para 26] [In favour of assessee] Words and phrases : Term 'thereon' as occurring in section 254(1) of the Income-tax Act, 1961/ Term though he may not have appealed as occurring in rule 27 of the Income-tax(Appellate Tribunal) Rules, 1963 2. AO cannot blindly rely upon a statement alone: 2.1 During survey dt. 02.02.2017 statements of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, assessing officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment. The said instruction was relied upon in the cases of R. K. synthetics 30 TW 228 (Jd), ITO vs. Suresh Chandra Koolwal (2004) 32 TW 23 (Jp) and also CIT v/s Shri Ramdas Motor Transport 238 ITR 177(AP). 2.4 Judicial Guideline: The authorities below did not appreciate that the Survey Search creates tension in the mind of the person being searched and a layman normally used to lose confidence. It can't be denied that such action creates an anxiety and medical problem to the person being searched. Pertinently, the Kelkar Committee has also taken note of this prevailing attitude of the search parties and consequently remarked very adversely. Reliance is placed on: 2.4.1 The existence of tension and surcharged atmosphere has been recognised even by the courts. Kindly refer Jagdish Narayan Ratan Kumar 22 TW 209 (JP). Such statements, therefore are bound to give a distorted picture and are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion, though best evidence against such a person, if shown to be out of ambiguity, under tension or was against the facts or misconception of law, can be validly retracted. The assessee repeatedly submitted that it had prepared a retraction letter supported by affidavit dated 14.02.2017 (APB 140-143) which was filed before the ADIT(Inv.), Kota on 06.04.2017 for this purpose the assessee purchased a Non-Judicial Stamp Paper on 07.02.2017 (i.e. just within 4 days) executed on 14.02.2017, when it was signed in the presence of the Notary Commissioner. The contents of the same are reproduced here under : 3. THAT the normal business hours of our business units are from 10:00 AM to 8:00 PM and business, activities are conducted at respective office 149, Ballabhbari, Kota during these hours only. 4. THAT the Income Tax Investigation Team has visited on 2nd February, 2017 at around 6:30 AM at my residence without prior notice and forced me to open the business premises at the same time. 5. THAT the Officials of Income Tax Department after forcing me to open the business premises started the survey on 2nd February, 2017 at around 7AM which continued till 5th February, 2017 around 3:30AM. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent recorded in course of survey. 9. That I assure that after obtaining the various documents impounded from me and. after analyzing the same, if any unrecorded income is found, I will disclose the same in the return of income. 10. Whatever declaration 1 have made and wherever documents they have made me signed, 1 was not in a state of mind to analyze the situation at that time. So, I request you to please not to consider the statement given at the time of survey, they were all taken by coercion and misrepresentation by the income Tax Officials which is against the law. 11. That the facts stated in Paras 1 to 10 above are true and correct to the best of my knowledge and belief, SO HELP ME GOD. 3.2 The Authorities below doubted the fact of filing the affidavit yet however, no positive evidence has been brought on record by them from the office of the ADIT (Inv) denying the fact of receiving in the retraction letter/affidavit. The very fact of filing the affidavit together with the other facts and in absence of any contrary evidence, has to accept that the assessee did retract within a period of just four days from the date of admission during the course of survey statement on dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held that confessional statements recorded under threat, coercion, inducement or promise are not valid but persons concerned should take care to retract such confessions without delay. Retraction would then be weighed in the light of other evidence available 3.4.6 The Hon ble Supreme Court in Vinod Solanki v/s Union of India (2009) 233 ELT 157 (SC) makes it abundantly clear that the issue of summons and obtaining statements from the persons summoned, cannot and should not be the only basis to make out a case by the Revenue against the assessee. The Hon ble Supreme Court took into account the fact that the burden of the revenue cannot be dispensed with and the onus cannot be shifted by it to the assessee by obtaining confessional statement. After elaborate judicial analysis of the legal position, the Hon ble Supreme Court allowed the appeal of the assessee and vacated the orders of all the lower authorities. 3.4.7 Also refer Heirs and LRs of Late Laxman Bhai S. Patel v/s CIT (2009) 222 CTR 138 (Guj). 4. Statement of assessee can t be incriminating material: 4.1 ACIT, Central Circle-1(4), Ahmedabad v. Himalaya Darshan Developers (Gujarat) (P.) Ltd [2021] 128 taxmann.com 435 (Ahmeda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of any document, entry in the books of account, an asset etc. [Para 8.5] 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 an 'incriminating material' sufficient to make assessment for the purposes of the Act. [Para 8.6] 4.2 PCIT, Delhi-2 v. Best Infrastructure (India) (P.) Ltd.* [2017] 84 taxmann.com 287 (Delhi) Hon ble High Court of Delhi held as under: 38. Fifthly, statements recorded under Section 132 (4) of the Act of the Act do not by themselves constitute incriminating material as has been explained by this Court in Harjeev Aggarwal (supra) . 5. No evidentiary value of Survey Statement: 5.1 Further as per section 133A, there is nothing which suggests that a statement can be recorded on 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Sections 132(4) and 133A held as under: 40. The main plank of Mr. Manchanda's submission was that the disclosure made by Mr. Pawan Gadia in his statement under Section 133A was sufficient to be construed as incriminating material qua all the aforementioned AYs, the assessment for which could be re-opened by invoking Section 153A of the Act. It is significant that while in the written submission dated 26th April, 2017, Mr. Manchanda termed the statement of Mr. Pawan Gadia as the statement dated 23rd December, 2005 recorded under Section 132(4) of the Act , he was careful to describe it as such in the subsequent written submission dated 2nd May, 2017. This was for a good reason. The statement was in fact not under Section 132(4) of the Act but under Section 133A of the Act. There is a difference between a statement made during a survey under Section 133A of the Act and that made during the course of search under Section 132 (4) of the Act. 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, jewell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this issue, we have already discussed the same in the earlier part of this order. No admission made in a statement recorded under section 133A on oath during survey can be relied as evidence against the maker or the assessee. Undeniably, the Assessing Officer has made impugned addition on the basis of the statement of Shri Manohar Lal Agarwal and specifically by relying on his reply to question No. 23 of his statement. As per the assessment order, the excess stock of Rs. 5,08,98,166 has been worked out after giving the benefit of discount and the gross profit rate but mainly relying on the statement of one of the partners of the assessee-firm. If the statement of Shri Manohar Lal Agarwal and others are excluded in view of the above legal position, the value of the alleged excess stock can be ascertained in the light of the facts of this case. The legal issue is decided in favour of the assessee 6. Statement recorded u/s131 and not u/s 133A(3)(iii)-misinterpretation of law: 6.1 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 surv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Laws (Amendment) Act, 1975, w.e.f. 01.10.1975, however, this being not a case of search, this sub-section is not applicable in the instant case. Therefore, to say that statement recorded u/s 133A(3)(iii) is equivalent to statement recorded u/s 131 is a gross misinterpretation of the provisions. 6.3 Decision cited by CIT(A) not applicable: The reliance placed by the ld. CIT(A) on certain decisions are based on the peculiar facts available in those cases only not available in the present case. eg. in Hukum Chand retraction was made after 2 years and in Kantilal C Shah retraction was made after 9 months hence both the cases are not applicable looking to the abnormally long period as against merely 2 months in the present case (04.02.2017) and affidavit towards retraction filed on 06.04.2017 (Pg.54 CIT(A) order). 6.4 It is pertinent to note that the CIT(A) has rejected the claim of filing retraction by the Assessee before him, at the same time, he considered 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 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifically asked about the nature thereof. In reply, he explained that these documents were related to purchase of one House at 7, Wonder Road, Kachchi Basti, Kota, these documents also contained a registered agreement wherein the total sale consideration is recorded at 62,50,000/-, Shri Naresh Jain again admitted that only a sum of Rs. 28,90,000/- was paid through cheque and balance Rs. 33,60,000/- was paid in cash. The cash payment is nowhere recorded in books of accounts. This agreement was entered on 13.04.2016 itself. When asked about this investment, the assessee filed his reply on 18.12.2019 (APB 32-37) in which the assessee has stated that the house is not related to him but related to Nisha Jain. The reply of the assessee is considered but not found acceptable. He himself accepted in his statement u/s 131 during survey that some part of the consideration at Rs. 33,60,000/- was paid in cash by him and this payment was not recorded in his books of accounts. This cash payment has not been accounted either by Naresh Jain or Nisha Jain. The entire submission of the assessee is considered an afterthought Therefore, his submission is not found maintainable, the amount of Rs. 33,60, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs (i) 2,85,000 (ii) 4,16,000 (iii) 1,00,000 (iv) 30,000 and thus the total of all the four figures as above works out to 8,31,000/- indicating plain figures, not confirming/indicating that these figures relate to any value in Rupee Term. It is also very humbly submitted that page No 68 of the impounded documents is just a rough jotting and does carry any material information. It was stated that detailed submission and relevant clarifications have already been made by the appellant vide reply letter dated 18/12/2019 (APB 32-37) about the facts and circumstances of purchase of house property and the amount of Rs. 5,00,000/- includes the amount Rs. 33,60,000/- spent in cash on 26/04/2016 towards construction/repair of the above said house property, has been duly shown and recorded in the books of Quick Advertising Company, Proprietor Nisha Jain, wife of appellant. It is stated that the impugned house property de-facto and de-jure belongs to Smt Nisha Jain W/o appellant and all the cost of house and construction expenses have been borne by Smt Nisha Jain and the same are well appearing in the books of Quick Advertising Company, Proprietor- Smt Nisha Jain. It is argued that Smt Nisha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er corroborative material assessment of tax cannot be made solely on basis of such sworn statement made by assessee as held by the Hon ble High Court. The assessee has explained the contents of impounded document as far as addition of Rs. 33,60,000/- is concerned. Therefore, the addition made by the AO to this extent is not found to be sustainable. The appellant has not explained the Rs. 5,00,000/- cash expenditure as admitted during the survey. The admission is also supported by impounded document. The appellant has given only vague explanation that it is also recorded in the books of Mrs. Nisha Jain. However, no credible evidence is furnished. In fact, the appellant argued that the amount of Rs. 5,00,000/- includes the amount Rs. 33,60,000/- spent in cash on 26/04/2016 towards construction/repair of the above said house property. The reply of the appellant is not supported by documentary evidences. How, this expenditure of Rs. 5 lakhs is included in the amount of Rs. 33,60,0000/- is not explained with supporting evidences. Therefore, the explanation of the appellant is not found to be convincing and the same is rejected. The addition made by the AO of Rs. 5,00,000/- is based on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further detailed in following the paras) prove that it was only Nisha Jain who made the entire payment. 5. Source fully explained: Undisputedly, the assessee submitted all the evidences of the source of payment made to the seller Shri Pradeep Sharma from the books of Quick Advertising Company, Proprietor- Smt Nisha Jain, wife of assessee ( PAN-ABLPJ8118L who is regularly filing her Income Tax Return to the A/O WardCircle 1(1) Kota),. Against total cost of house plus construction/repairs, registration and other relevant charges etc and aggregating to Rs. 64,18,000/-, payment Rs. 29,58,000/- has been made through cheques, drawn on Syndicate Bank Ch No 392110 Rs. 5.00,000/- No 392117 Rs. 10,00,000/- No 392119 Rs. 10,00,000/-, No 557160 Rs. 3,90,000/- No. 557161 Rs. 68,000/- all between 13/04/2016 to 16/05/2016 and the balance amount Rs. 33,60,000/- has been paid in Cash and mainly does cover construction/repairs registration related expenses etc. paid to Pradeep Sharma. The relevant transactions/entries are appearing in the ledger accounts of Quick Advertising. 6. Voluminous evidences submitted before lower authorities but could not be rebutted by the AO: The assessee in support of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of Shri Naresh Jain some incriminating documents were seized and inventoried as Party no-22 Annexure A, Exhibit 11, Pg no.68, (APB 78) which contained information regarding cash payment to contractor for construction expenses in cash for above said property amounting to Rs. 5 lacs. It was submitted as before ld. CIT(A) as under (also reproduce at Pg31 of CIT(A) order): B (i) As regards addition of Rs. 5,00,000/- it is very humbly submitted that the issue relates to construction expenses of Rs. 5,00,000/- on the house property situated at 7 Wonder Road, Kachibasti, Kota and Assessment Order refers to the Annexure A-1, Exhibit 11, page No 68 contaning rough jottings (i) 2,85,000 (ii) 4,16,000 (iii) 1,00,000 (iv) 30,000 and thus the total of all the four figures as above works out to 8,31,000/-indicating plain figures, not confirming/indicating that these figures relate to any value in Rupee Term. It is also very humbly submitted that page No 68 of the impounded documents is just a rough jotting and does carry any material information. (ii) It appears that the Survey Team/Assessing Authority placing reliance on the reply of appellant for Q-23 of Recorded Statement On page No 68, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich, the authorities below must have accepted. Thus, under the totality of the facts and circumstances detailed above, the CIT(A) order rightly deleted the addition. Therefore, this ground taken by the revenue also deserves to be dismissed. DGOA-3: Rs. 7,10,000/-: on account of undisclosed income u/s 69 for purchase of agricultural land situated VII-Mandana, NH-76, Kota; Facts: The AO has dealt with this issue at Pg 8 Pr 7 and copied at page no.41 para 7.1 of CIT(A) order. The detailed written submissions dt. 02.12.2022 filed before the CIT(A) are at page no.42 para 7.2, the remand report thereupon by the AO dt. 07.06.2023 is at page no.43 para 7.4, the rejoinder dt. 29.06.2023 at page no. 45 para 7.5 and finally the ld. CIT(A), after considering the detailed submissions, the remand report, rejoinder made before him, at Page 46, Para. 7.6 concluded in following words: 7.6 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The AO noted that during the Survey actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of land and confusion has crept in. It is further argued that actually the land was purchased in F/Y 2008-09, relevant to A/Y 2009-10 and as such does not relate to A/Y 2017-18. All the payments made towards full cost of land through cheque Rs. 6,90,000/- and in cash Rs. 7,10,000/- total Rs. 14,00,000/- is appearing in the books of accounts of appellant in A/Y 2009-10. It is argued that the valid documents regarding sale/purchase of the said agricultural land and the transactions made in cash/cheque towards payment for the said land by the appellant are well appearing in the books of accounts of the appellant. The appellant has been satisfactorily assessed for A/Y 2009-10 and no demand for the said period is outstanding against the appellant. The facts of the issue are considered. Here the transaction of cash is not denied by the appellant but according to the appellant, the relevant AY should be AY 2009-10 and not AY 2017-18. The appellant has furnished the copy of agreement of transaction of Agricultural land situated at Hanutia Road, village Mandana, Tehsil Ladpura District Kota, admeasuring 0.75 hectare and recorded with the Revenue Department under Khasra No 73. The actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 111) ii. Acknowledgement of cash payment/receipts Rs. 7,00,000/- (APB 112). 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 also deserves to be dismissed and relief may be granted. DGOA-4: Rs. 35,00,000/-: on account of undisclosed income u/s 69 for construction expense w.r.t. house at E-15, Ballabhbari, Kota; Facts: The AO has dealt with this issue at Pg 9 Pr 8 and copied at page no.48 para 8.1 of CIT(A) order. The detailed written submissions dt.02.12.2022 filed before the CIT(A) are at page no.49 para 8.2, the remand report thereupon by the AO dt. 07.06.2023 is at page no.50 para 8.4, the rejoinder dt. 29.06.2023 at page no. 52 para 8.5 and finally the ld. CIT(A), after considering the detailed submissions, the remand report, rejoinder made before him, at Page 53, Para. 8.6 concluded in following words: 8.6 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nisha Jain, wife of appellant who happens to be proprietor of Quick Advertising Company Kota. It is very argued that as per books of accounts, actual figures work out to Rs. 27,97,131/ and not Rs. 35,00,000/- The sum of Rs. 27,97,131/- has been well accounted for in the books of accounts by Smt. Nisha Jain. The appellant stated that the remaining Rs. 7,02,869/- be appropriated out of the amount Rs. 46,43,251/-, already declared by the appellant under the head Other Receipts . The facts of the issue are considered. The AO made addition of Rs. 35,00,000/- on the basis of statement recorded during survey. However, in the statement itself, the appellant stated that the diary contains details about house construction aggregating to about Rs. 35.00 lac on page No 358 of the relevant Exhibit inventorized by the Survey Team. How much amount out of the expenses has been recorded in books, I have no knowledge at the hour. I shall provide the details later on. Therefore, during the survey also the appellant claimed that some of the amount is entered in the books of accounts. The appellant has now furnished evidences to show that out of Rs. 35,00,000/-the sum of Rs. 27,97,131/- has been accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exhibit-13, page No 358, does not at all indicate any proper description/particulars/figures etc to arrive at some correct/logical point. However, the description indicates to some building material/masonary work like goods/services relating to house construction/repair. In reply to Q-23 of the Statement Recorded by the Survey team the appellants ineralia says The diary contains details about house construction aggregating to about Rs. 35.00 lac on page No 358 of the relelvant Exhibit inventorized by the Survey Team. How much amount out of the expenses has been recorded in books, I have no knowledge at the hour. I shall provide the details later on. It is evident that the reply of appellant to the question is incomplete/ambiguous and cannot be relied upon and nothing meaningful, appellant query raised by the survey team, the appellant has replied that the amount relates to construction/repair/renovation of their house at E-15, Ballabhbari Kota. Placing undue emphasis on the recorded statement the Assessing Authority has added the amount in the income of appellant whereas actually the said amount has been booked and accounted for by Smt Nisha Jain, wife of appellant who happens to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of un-accounted Expenditure on construction of house- E- 15, Ballabhbari, Kota (i) Referring to the documents impounded inventorized as Exhibit-2, Annexure-A, page No 358, some rough jottings about masonary work estimates amounting to figures 35,00,000 + 83,000 + 60,000 Total 36,43,000, papers and documents submitted by the assessee/appellant, and placing reliance and much importance and emphasis to the recorded statement of Shri Naresh Jain, especially his answer to Q-No 23, saying that this document was related to expenses incurred for construction of at house No E-15, Ballabhbari, Kota wherein a sum of Rs. 35,00,000/- was spent in cash and this payment was also no where recorded in books of accounts, the Assessing Authority has ineralia observed The reply of assessee is perused but not found acceptable. As per submission made by assessee, he himself accepted in his statement u/s 131 that Cash payment Of Rs. 35,00,000/- was made for construction of house and the same was not entered in regular books of accounts. The Assessee has not produced any bills, vouchers, valuation report etc in support of claim The documents were found from the premises of the assessee and assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed income u/s 69 of the Income Tax Act In a routine and mechanical manner, the Assessing Authority has concluded Hence the AO had rightly made addition of Rs. 35,00,000/- and the contention of assessee/appellant is not acceptable being not correct. Therefore the Assessing Authority observing as above, is not correct. 6. Voluminous evidences submitted before lower authorities but could not be rebutted by the AO: Assessee in support of its claim submitted documentary evidence as listed hereunder: (i) copy of ledger account (APB 114 to 123) (ii) of construction activity relevant bills and vouchers relating to construction expenses (APB 124 to 218) (iii) Ledger Account showing payments routed through Bank Account (APB 219 to 237) (iv) Assets Depreciation Chart showing Rs. 27,97,131, (APB 92). 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 also deserves to be dismissed. DGOA-5: Rs. 75,00,000/-: on account of undisclosed income u/s 69C alleged expenditure on marriage of Shri Ativeer Jain (Son of Shri Naresh Jain) Facts: The AO has dealt with this issue at Pg. 10 para 9 and cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marriage to the tune of Rs. 75,00,000/- and the details given by the appellant (i) Fooding Expenses Rs. 30 lac, (ii) Jewellery Rs. 21 lac, (iii) Event Rs. 11 lac, (iv) Venue rent/expenses - UmmedBhawan- Rs. 5 lac, (v) Other/MiscExp Rs. 8 lac- Total Rs. 75 lac. The appellant once again submitted that at that moment he could not explain as to how much expenditure was already recorded in regular books of accounts and should explain the same later on. The appellant filed reply on 18/12/2019 (APB 32-37) and therein stated that the expenses is not related to him. It is very further stated that the marriage of appellant s son Ativeer Jain, was held on 17/01/2017 and for the occasion, a sum of Rs. 76,60,417/- as on 31/03/2017 and with the payment of unpaid items, the expenses as on 31/03/2018 stand at Rs. 77,92,747/-, was spent by SmtNisha Jain- w/o appellant and the details are well entered in the ledger account of M/s Quick Advrtising Company, Kota a propriety concern of SmtNisha Jain. That the entries in the ledger accounts of the above firm reveal that around Rs. 2,76,890/- have been paid through cash. The self-speaking fact that the marriage of the son of appellant has taken place of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e upon our detailed submissions made before AO as also before the CIT(A). 2. We also place strong reliance upon the order of the CIT(A) to the extent (Pg. 38, Para 6.6) his findings and observations are given in the favour of assessee. 3. We respectfully submit that the Revenue's grounds lack merit for the following reasons: 4. At the outset it is submitted that on a bare consideration of the entire matter together with the appreciation of the evidences in particularly those impounded, it is evident that the ld. AO proceeded on a purported misconception of fact and rather on mere suspicion. It is evident from the impounded document that theses were rough jottings and mere estimates only. On the contrary, the wife of the assessee Smt. Nisha Jain had already accounted for a higher sum being Rs. 76,60,417/- upto 31.03.2017 together with the unpaid items of the marriage expenses upto Rs. 1,32,330/-, total to Rs. 77,92,747/- in the books of accounts of her proprietary M/s Quick Adevertising Agency, Kota. Pertinently, most substantial amount out of that was even paid through banking channels only and a small amount was paid in cash. Copy of ledger account and the books accounts, show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . vs Jawanmal Gemaji Gandhi on 5 October, 1983 discussing on the earlier decision of Kerala High Court in [1980] 121 ITR 433. The facts related to claim of telescoping benefit is presented as under The appellant also stated that during the year also the cash was withdrawn by the assessee as under AY 2017-18 (Rs. 46,23,251/-) Return filed on 28.03.2018. The same assessed on 30-12-2019. The assessee claimed this amount as income from other sources. This amount was in the form of cash withdrawn from excess salary claimed to be paid to employees in Bhagat Public School. The appellant has offered this amount in the return of income furnished for AY 2017-18. Accordingly, the appellant claimed that Rs. 46,43,251/- was available with the assessee. Therefore, against the additions confirmed during the year the set off should be given for the cash which is already offered for tax by the assessee. The appellant has also relied upon decisions as discussed above. The argument of the appellant are considered. The appellant has offered additional income in the reopened assessments which has been accepted by the AO. Therefore, the availability of cash with the assessee during the year is establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t when cash credits were treated as income from undisclosed sources, the assessee can take an alternative contention before the Appellate Assistant Commissioner that the cash credits were out of undisclosed income taxed in earlier years and the assessee is entitled to raise such alternative plea before the Appellate Assistant Commissioner for the first time. [Addl. CIT v. Dharamdas Agarwal (1983) 144 ITR 143 (MP)] In the case of CIT v. K.S.M. Guruswamy Nadar and Sons, it was held by the Madras High Court that when there are two separate additions, one on account of suppression of profit and another on account of cash credit, it is open to the assessee to explain that the suppressed profits had been brought in as cash credits and one has to be telescoped into the other resulting only in one addition. It was, therefore, held that the Tribunal was right in its view in telescoping the additions made towards the cash credits. [CIT v. K.S.M. Guruswamy Nadar and Sons (1984) 149 ITR 127 (Mad)] In the case of CIT v. Tyaryamal Balchand, additions were made to the trading results as also amounts representing cash credits were added as income from undisclosed sources. It was held that the AAC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02,869/-. The facts are not denied that the assessee has surrendered additional income of Rs. 46,43,251/- (APB39) based on the excess cash withdrawal in the name of the payments made to the employees. In fact, it was the cash acquired from the employees of the school and was offered for Tax. The amount was in the form of cash withdrawals from excess salary claimed to have been paid to the employees of Bhagat Public School, which was offered for taxation in the ITR furnished for A.Y. 2017-18 (APB 38-42). On the other hand, we find that the ld. CIT(A) had confirmed various additions totaling to Rs. 49,20,869/- as detailed in his order. 2. The Revenue has not brought anything on record to show that the additional income so offered in A.Y. 17-18 stood utilised elsewhere and was not available for the undisclosed income/undisclosed investment made by the assessee in this year to the extent, they were confirmed by the CIT(A). 3. Similar benefit of telescoping was claimed and allowed by ld. CIT(A) but the ld. CIT(A) wrongly reduced Rs. 11.60 lakhs of AY 2015-16 as utilization which is under challenge along with addition confirmed/ deleted are also under challenge by both parties hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since we have already considered and decided the other grounds which are part of Rs. 1.83 crore, hence no separate adjudication is required on the merit part. However, in response to the ground of appeal no. 1 6 (DGOA 1 6) taken by the Revenue, wherein it is alleged that the ld. CIT(A) has ignored the fact that the assessee had already admitted income on oath u/s 131 and in particular has held that: With regard to evidentiary value of the statement recorded under oath u/s 131 it is held in various decisions that the statement recorded under oath is having evidentiary value. (At pg.25 ) the next objection of the assessee is that statement on oath could not be recorded in course of survey. This issue is covered by the decision of the Bombay High Court in the case of Dr. Dinesh Jain v. ITO [2014] 363 ITR 210/226 Taxman 27/45 taxmann.com 442 and, therefore, this objection raised by assessee does not survive. [Para 9] (at pg.26) , 3.2 The assessee, feeling aggrieved from such finding recorded by the CIT(A) against the assessee, made a prayer orally as also through the written submission under Rule 27 of ITAT Rules, 1963. However, we do not find any categorical denial/objection from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting assessee (respondent before it) to support final order of Commissioner (Appeal) by assailing findings of Commissioner (Appeal) on issues that had been decided against him - Held, yes[Para 26] [In favour of assessee].......Words and phrases : Term 'thereon' as occurring in section 254(1) of the Income-tax Act, 1961/ Term though he may not have appealed as occurring in rule 27 of the Income-tax( Appellate Tribunal) Rules, 1963 3.4 Having admitted prayer of the assessee under Rule 27 as above, we now proceed to adjudicate the grounds of appeal no. 1 6 taken by the Revenue and such prayer. However, since a similar issue has already been considered and decided in detail in para no. 3.2 of our order dated 05-08-2024 in Naresh Jain A.Y. 2016-17 ITA No 349/JPR/2024(A) 318/JPR/2024(A) and the same is reproduced hereunder: 3.2 The short question raised in the modified ground appeal no. 2 by the assessee, to be decided is whether the statement recorded by the authorities during the course of survey carried out u/s 133A of the Act has evidential value so that the admission made, if any in such statement (whether on oath or otherwise), can be used against the assessee. We find tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e re-opened by invoking Section 153A of the Act. It is significant that while in the written submission dated 26th April, 2017, Mr. Manchanda termed the statement of Mr. Pawan Gadia as the statement dated 23rd December, 2005 recorded under Section 132(4) of the Act , he was careful to describe it as such in the subsequent written submission dated 2nd May, 2017. This was for a good reason. The statement was in fact not under Section 132(4) of the Act but under Section 133A of the Act. There is a difference between a statement made during a survey under Section 133A of the Act and that made during the course of search under Section 132 (4) of the Act. 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement of Shri Manohar Lal Agarwal and specifically by relying on his reply to question No. 23 of his statement. As per the assessment order, the excess stock of Rs. 5,08,98,166 has been worked out after giving the benefit of discount and the gross profit rate but mainly relying on the statement of one of the partners of the assessee-firm. If the statement of Shri Manohar Lal Agarwal and others are excluded in view of the above legal position, the value of the alleged excess stock can be ascertained in the light of the facts of this case. The legal issue is decided in favour of the assessee We also find support from Paul Matthew s sons Vs CIT [2003] 263 ITR 101, S. Kadar Khan Sons [2008] 300 ITR 157 (Madaras) affirmed by Hon ble Apex court in CIT Vs S. Kadar Khan [2013] 352 ITR 480 (SC). 3.4 The reliance placed by the ld. CIT(A) on certain decisions are based on the peculiar facts available in those cases only not available in the present case. The ld. CIT(A) in his order in A.Y. 17-18 (in ITA No. 374/JPR/2024(D)) has wrongly placed reliance on the case of Ravi Mathur (RHC) incorrectly stating that the evidentiary value of the statement recorded during survey was upheld whereas, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case here hence, the same is completely distinguishable. The decision in the case of Dinesh Jain is also not applicable in as much as there also, the lower authorities were not satisfied with the explanation furnished w.r.t the impounded document though the assessee had earlier admitted income based thereon, which are not the facts in the present case. Moreover, Meeta Gutgutia (Supra) is a much later decision making a comparative study of the relevant provisions in detail. Thus, respectfully following the ratio laid down in the above cited decisions, we are of the considered opinion that, the plea of the Revenue that the CIT(A) should have solely relied upon the survey statement of Shri Naresh Jain recorded u/s 133A(3)(iii) (or even u/s 131 on oath) admitting income but ignoring the impounded documents found and the explanation furnished thereon with the supporting evidences should be ignored, can not be accepted. We are thus not in agreement with the dissenting findings recorded by the CIT(A) on this aspect. For the above reasons, the modified ground of appeal no. 2 taken by the assessee is hereby allowed. However, except the above legal aspect decided by the ld. CIT(A) agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent parties. Undisputedly, Nisha Jain purchased the property and she became the real and beneficial owner of the property. There is no dispute with regards to the source of payment of total purchase consideration including all expenses at Rs. 64.18 lacs out of which Rs. 29.58 lacs paid through cheque and Rs. 33.60 was paid in cash. Further, Rs. 1 lac was paid towards stamp charges details are available at APB 85, which is a copy of the ledger account in the books of M/s Quick Advertising Company. The AO never held the assessee to be the benamidar of Smt Nisha Jain. These facts and findings could not be rebutted by the ld D/R. Further heavy reliance is placed on the statement of the assessee recorded during the survey u/s 133A is completely misplaced. In the case of Naresh Jain ITA 349/JPR/2024(A) 358/JPR/2024(D) for A.Y. 2016-17, we have already dealt with this issue in detail in para 3.2 of our order dated 05-08-2024 (Reproduced hereinabove) holding that survey statement alone, cannot be relied upon as such statement has no binding evidentiary value. We also agree with the ld. CIT(A) that the AO used the statement to corroborate said material found during the survey however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring survey u/s 133A. On a careful consideration of the rival contentions, the material available on record and in the light of the judicial pronouncements, we find no force in the ground of the Revenue in as much as undisputedly, the amount of construction expenditure was already booked by the wife of the assessee, Smt. Nisha Jain in the regularly maintained books of accounts of her proprietary M/s Quick Advertising Company, Kota to the extent of Rs. 27,97,131/- and the balance of Rs. 7,02,869/- has already been offered by the assessee with the clam of telescoping. The said books of accounts containing the relevant ledger account, etc. were produced before the authorities below. However, the ld. AO could not find any fault therein, nor he rejected the books of accounts. We have also seen the impounded documents relied upon by the AO however, we find that no blind reliance could be placed on the statement of the assessee, alleging admission because in the same very statement, he clearly stated that he was not in a position to tell the exact amount of expenditures recorded in the accounts. Further, we find that the ld. CIT(A), recorded categorical findings of fact after verificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available on record and the findings recorded by the AO ld. CIT(A)and the decisions cited at bar. The facts are not denied that the assessee had disclosed additional income in A.Y 13-14 to A.Y 16-17 totalling to Rs. 1,11,90,778/-. This amount was in the form of cash withdrawals from excess salary claimed to have been paid to the employees of Bhagat Public School which, was offered for taxation in the ITR furnished for these years. The income so offered was duly assessed by the AO also and the ld. CIT(A) has recorded factual findings on this aspect in relation to the A.Y. 13-14 to A.Y 16-17. On the other hand, the ld. CIT(A) has confirmed various additions totaling to Rs. 1,11,90,778/- as detailed in his order. There is nothing on record to show that the additional income so offered in these years stood utilised elsewhere and was not available for the undisclosed investment/outgoings made by the assessee in this year (to the extent they were confirmed by the ld.CIT(A)). The ld. DR was also not in a position to controvert these fact findings. On the other hand, the issue of telescoping is no more res integra and rather a well settled principle because in the case of Anantharam Veeras ..... X X X X Extracts X X X X X X X X Extracts X X X X
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