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TMI Blog2025 (4) TMI 1260X X X X Extracts X X X X X X X X Extracts X X X X ..... business receipt as recorded on Oath during the survey by Dr Attajissaom S Poonawala partner of the said Firm. However, for the year under the consideration, the Gross Receipt has been offered for taxation amounting to Rs. 1,13,08,880/- which includes the said income of Rws.85,88,540/-. Further, there is a difference between the word "Receipt" and "Profit from Business and Profession". Further, under normal provisions of the Income Tax Act, taxable business income will be computed after allowing deduction u/s - 30 to 38 of the Income Tax Act,1961. Ground No. 2: Rely on the Brown loose Diary by Survey Personnel and Comparison of Actual Income with Tentative Profit and Loss Account: The learned officer has relied on the Brown loose diary as evidence, which cannot be considered as Corroborative evidence. Further, the learned officer and the same confirmed by the Hon'ble CIT(A) erred that, the survey was conducted on 08/03/2019 and as per the Tentative Profit & Loss Account Gross Receipt shown Rs. 62,24,650/- and after deducting expenses towards purchase and other direct expense, Net Profit was found Rs. 15,96,596/-. However, the view considers by the learned officer an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny Finances from Financial Instructionbasicrequirement is to produced Projection of Gross Earning ie Receipt. Assessee currently availing LAP Loan facility from Kotak Bank which is dulyreflecting in Balance Sheet produced Before Income tax Department. Survey Party of Income tax Department has impounded Day to Day ReceiptBooks which reflect Assessee actually Collection from its Business but the Department has never verified the said Day to day Receipt Books whichindicates the Actual Collection made by Assessee for the said period. FromReports Generated from CT scan and X ray Machine which is pre-seriallynumbered which cannot be altered or modified which can be verified for thepurpose of verification of Actual Receipt of Assessee. Assessee hereby prove the Gross Receipt which Income Tax Department haverelied upon is incorrect and it's Tentative Projection. Calculation of Actual and maximum Capacity of the same is as follows:- Actual as 31/03/2019 IF at Maximum Cap on 31/03/2019 Amount Capacity Per test rate Amount Capacity Per test Rate CT Scan 12,52,000 2 per day 2000/- 18,78,000 3 per day 2000/- X-ray 5,47,750 5 per day 350/- 7, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Remuneration to Partners etc was accounted on 31/03/2019 when books of Accounts was finalized. We hereby enclosed chart with Reconciliation with Tentative P&L which your honor has not taken in consideration while issuing Show Cause Notice. 1. Actual Depreciation of Rs 20,36,750/- was not taken into consideration tentative Profit and Loss Accounts we hereby Enclosed Proof of Depreciation which Audited under Income Tax Act. 2. Actual Electricity Expenses for the period is Rs 5,54,220/- but as per Tentative Profit and Loss Accounts is only Rs 369140/- we hereby Enclosed Proof of electricity bill to Prove Assessee claim. 3. Actual Oxygen Gas expenses for the period is Rs. 105000/- but as per Tentative Profit and Loss account is only NIL we hereby Enclosed proof of Oxygen gas bill to prove Assessee claim 1. Professional Fees of Rs 9,63,070/- paid to Dr Bhavesh Kansara but as per Tentative Profit and Loss Accounts is only Nil, we hereby Enclosed Proof of Form 15A to Prove Assessee claim. 5. Actual Salary Expenses for the period are Rs 20,41,854/ but as per Tentative Profit and Loss Accounts is only Rs 12,69,572/- we hereby Enclosed Proof of Salary paid for the period to Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the survey team had relied upon a brown loose-leaf diary, which, according to him, does not constitute corroborative evidence. However, this contention is not tenable, as the diary reflects actual receipts from CT scans, X-rays, and OPD services. There exists a discrepancy of Rs. 85,88,540 between the figures recorded in the diary and those reflected in the books of accounts produced during the survey. b. Examination of the regular books of account clearly indicates that the assessee failed to disclose income amounting to Rs. 85,88,540. c. Furthermore, the partner of the assessee's firm admitted under oath during the survey proceedings that the amount of Rs. 85,88,540 represented undisclosed business income. d. The assessee also claimed that the figures noted in the brown diary were merely tentative projections of gross receipts prepared for the purpose of availing loans from various financial institutions. The assessee intended to expand the business by introducing an IPD unit, additional X-ray machines, and pathology testing equipment, all requiring increased working and fixed capital. It was submitted that the assessee was already availing a LAP loan facility from Kota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the expenses were not properly taken care of during the survey. The declared survey amount is included in both expenses and gross receipts. Here, the assessee enclosed the re-conciliation with tentative P&L Account and the addition made on the assessment order, the details of which are as under: - "We hereby enclosed chart with Reconciliation with Tentative P&L. AO has stated in his Assessment order that we have replied to his show cause Notice on which AO relied on for addition of Income as under as mentioned in Assessment order as under 1. Actual Depreciation of Rs 20,36,750/- was not taken into consideration tentative Profit and Loss Accounts. We hereby Enclosed Proof of Depreciation which Audited under Income Tax Act. 2. Actual Electricity Expenses for the period is Rs 5,54,220/- but as per Tentative Profit and Loss Accounts is only Rs 369140/- we hereby Enclosed Proof of electricity bill to Prove Assessee claim. 3. Actual Oxygen Gas expenses for the period is Rs. 105600/- but as per Tentative Profit and Loss Account is only NIL we hereby Enclosed proof of Oxygen gas bill to prove Assessee claim. 4. Professional Fees of Rs 9,63,070/- paid to Dr Bhavesh Kansara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neration from partnership firm. AO has not stated about loss claimed in return as well as carried forward loss and he has not adjusted in computation while doing assessment. AO has also not considered carried forward loss of up to Rs. 17,45,881 (2,63,109+14,35,988) determined by the income. The assessee has filling return of Income after remuneration of partners Rs. (6,14,854) is taxable income out of which assessee has claimed carried loss of Rs. 17,45,881 Enclose here with copy of Return of Income which shows carried forward loss of Rs. 17,45,881 which is Claiming Return of Income for A.Y. 17-18." 5. The Ld.DR vehemently argued and relied on the order of the revenue authorities. The Ld.DR relied on the written submission which is containing pages 1 to 17. The relevant part is reproduced as below:- "Conclusion In light of the above facts, law, and judicial guidance, the Revenue submits that the addition of Rs. 85,88,540/- on account of suppressed receipts has been rightly made by the Assessing Officer and justly upheld by the first appellate authority. The case against the assessee is compelling on evidence the assessee was found maintaining parallel records of income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble ITAT dismiss the assessee's appeal on this issue and uphold the assessment of the said amount as the assessee's income. This would be in the interest of justice, revenue, and parity with numerous precedents dealing with tax evasion uncovered in surveys." 6. We have heard the rival submissions and perused the material available on record. During the course of the survey proceedings, the assessee declared an amount of Rs. 85,88,540/- as undisclosed income. However, during the assessment proceedings and also before this Bench, the assessee submitted a reconciliation statement, explaining that the earlier declaration was based solely on information drawn from unaudited books of account. Upon finalization of the accounts, the assessee observed a reduction in the turnover initially declared at the time of the survey. Specifically, the turnover was revised from Rs. 1,48,13,190/- to Rs. 1,13,08,880/-, resulting in a difference of Rs. 38,04,310/-. The Ld. AR confirmed that the assessee had declared a net profit rate of 7.76% during the relevant assessment year. It was fairly conceded by the Ld. AR that the net profit margin should be applied to the difference in gros ..... X X X X Extracts X X X X X X X X Extracts X X X X
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