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Income Tax Appellate Tribunal, INDORE “SMC” BENCH, INDORE
Before: SHRI KUL BHARAT
Appellant by Shri P.D. Nagar, A.R. Respondent by Shri Puneet Kumar, Sr. D.R. Date of Hearing: 11.12.2019 Date of Pronouncement: 26.12.2019 आदेश / O R D E R PER KUL BHARAT, J.M: This appeal by the assessee is directed against order of the CIT(A), Ujjain dated 12.12.2017 pertaining to the assessment year 2004-05. The assessee has raised following grounds of appeal:
[ Sudhir Kumar Jain, Dist. Ratlam] ]
That the learened CIT(A) erred in law in confirming the addition of Rs.3,78,150/- being the difference in the amount surrendered during the survey and the income offered for tax while filing the return of income. He erred in confirming the addition without appreciating the fact that:- a) Such differential amount of Rs.3,78,150/- was retracted before filing of return with proper explanation vide letter dated 16.8.2004; b) Difference of Rs.1,58,600/- represents amount due from debtors appearing in the list found during survey, were related to previous F.Y. relevant to A.Y. 2003-04; c) Some of the debtors had already repaid the amount before the date of survey amounting to Rs.1,19,550/- hence did not remain outstanding. Confirmation of addition made in spite of proper explanation towards partial retraction of the amount surrendered during survey on the ground that such retraction was delayed, is unjustified, improper, bad in law and deserves to be quashed.
2. That the learned CIT(A) further erred in law in confirming the addition of Rs. One lac out of Rs.2 lacs given for purchase of agricultural land jointly by two parties as per agreement dated 21.7.2003. He ought to have considered that the amounts were advanced at Rs.1,51,000/- and Rs.49,000/- by both of them hence the appellant’s share being Rs.One lac only, was offered for tax. It being a mistake at the time of survey was rectified with proper evidence and confirmation hence confirmation of addition made at Rs.One lac on the ground of delayed retraction is unjustified, improper, bad in law and deserves to be set aside.
[ Sudhir Kumar Jain, Dist. Ratlam] ]
3. That the learned CIT(A) erred in law in confirming addition made at Rs.13,27,300/- being the entire amount of cheques/cash deposited by the appellant in current account with bank during the year u/s 68 of the Act. He erred in law in not appreciating the following vital facts:- a) Out of Rs.13.27 lacs, cheques deposited in bank were Rs.6.71 lacs which were duly confirmed from the debtors or received by way of repayments of loans given. b) Deposit of cash of Rs.6.56 lacs in the bank account represents cash of Rs.4 lacs surrendered as income out of cash found during survey which were offered for tax and balance amount was also recovered from debtors against advances given. Addition so made and confirmed without considering explanations along with documentary evidences is wholly unjustified, improper, bad in law and deserves to be quashed.
4. That the learned CIT(A) further erred in law in confirming the addition of Rs.6,21,591/- being the amount of credit entries during the whole year in savings bank account of the wife of the assessee (Smt. Jyotibala) who is being assessed to tax and such account was prop3erly reflected in her books. Considering the credit side of the bank account ignoring the withdrawals made from time to time and deposits being collection of cheques except cash deposit of Rs.20,000/- only vitiated the assessment order and its confirmation is wholly unjustified, improper, bad in law. 5. The appellant further craves leave to add, alter and/or to amend the aforesaid grounds of appeal as and when required.
[ Sudhir Kumar Jain, Dist. Ratlam] ]
The facts of the case are that a survey action u/s 133A of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) was carried out at the business premises of the assessee.
Thereafter, case of the assessee was picked up for scrutiny assessment. It is observed by the A.O. that during the course of survey proceedings, the assessee had surrendered an amount of Rs.15,00,847/- in different heads. In respect of debtors a sum of Rs.7,88,150/- was surrendered, in respect of advance payment to purchase land of Rs.2 lakhs, excess cash found of Rs.4,14,000/- and investment in purchases of Rs.98,697/-. The assessee did not disclose the entire surrender, which was made during the course of assessment. In respect of debtors, the assessee filed certain evidences. The A.O. on the basis of the evidence supplied restricted the addition in respect of debtors of Rs.3,78,150/-. Further, the A.O. made addition
[ Sudhir Kumar Jain, Dist. Ratlam] ] in respect of profit of Rs.24,157/-. The A.O. also made addition in respect of debts of Rs.26,500/- and amounts deposited in the bank account of Rs.19,48,891/-. Against this, the assessee preferred appeal before Ld. CIT(A), who partly allowed the appeal, thereby the Ld. CIT(A) confirmed the addition of Rs.3,78,150/- and deleted the addition made on account of gross profit, bad debt and confirmed the other expenditure. The Ld. CIT(A) also confirmed the addition of cash deposits of Rs.19,48,891/-. Aggrieved against this, the assessee preferred an appeal before this Tribunal.
Ld. Counsel for the assessee Sh. B.D. Nagar reiterated the submissions as made in the written synopsis. The submissions of the Ld. Counsel for the assessee are as under:
[ Sudhir Kumar Jain, Dist. Ratlam] ] [ Sudhir Kumar Jain, Dist. Ratlam] ] [ Sudhir Kumar Jain, Dist. Ratlam] ] [ Sudhir Kumar Jain, Dist. Ratlam] ]
Ld. D.R. opposed these submissions and supported the orders of the authorities below.
[ Sudhir Kumar Jain, Dist. Ratlam] ]
I have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. Ground No.1 is against confirming the addition of Rs.3,78,150/- in respect of the difference in the amount surrendered during the course of survey and income offered for filing of return of income. I have gone through the evidence filed by the assessee. The amount was retracted even filing of the return of income.
In respect of amount of Rs.1,58,600/-, the assessee has demonstrated that the amount was given during the assessment year 2003-04. Therefore, the amount was required to be added in that year. The assessing officer is directed accordingly. Regarding the amount of Rs.1,19,550/-, it is stated that the amount outstanding was received back before the date of survey. In support of this, the assessee has drawn my attention to the written
[ Sudhir Kumar Jain, Dist. Ratlam] ] submissions. However, no supporting evidence has been filed. Therefore, I sustain this addition. Regarding amount of Rs.1 lakh, it is stated that the Ld. CIT(A) has wrongly confirmed the addition of Rs. 2 lakhs. In fact, the land was jointly owned by two persons, therefore, the addition should have been restricted to Rs.1 lakh. I have perused the agreement. As per this agreement, the land is jointly owned. Therefore, the assessing officer should have made addition of Rs. 1 lakh only. I find merit into the contention of the assessee. Therefore, the A.O. is directed to delete this addition. Ground No.1 is partly allowed.
Ground No.2 is against confirming the addition of Rs. 2 lakhs. I have already discussed this in ground No.1 and needs no separate adjudication. Ground No.2 is allowed.
Ground Nos.3 & 4 are regarding confirming addition of Rs.13,27,300/- and confirming addition of Rs.6,21,591/-.
[ Sudhir Kumar Jain, Dist. Ratlam] ] In respect of confirming the addition of Rs.13,27,300/-, it is stated that out of Rs.13.27 lakhs, cheque deposit in bank was amounting to Rs.6.71 lakhs, which was duly confirmed by the debtors and out of remaining deposit of cash of Rs.6.56 lakhs, Rs.4 lakhs was surrendered out of cash during the survey, which was offered for tax and balance amount was also recovered from debtors against advances given. It is stated that credit in current account with Mandsaur Khetriya Gramin Bank was of Rs.13,27,300/-. The A.O. made addition of the total credit entries appearing in the bank account u/s 68 of the Act. It is stated that detailed explanation was submitted along with the documentary evidences for each and every credit entry. It is submitted that a sum of Rs.6,56,500/- was deposited by way of cheques. The narration of such deposits is given in respect of the cash deposit. It is stated
[ Sudhir Kumar Jain, Dist. Ratlam] ] that Rs.46,500/- was surrendered during the survey and deposit of Rs.2 lakhs was out of the cash surrendered during the survey. Further, it is contended that a sum of Rs.75,000/-, Rs.1 lakh and Rs.35,000/- were realised from the debtors. So far the cheque deposit in bank account, the assessee has given supporting evidences, therefore, the A.O. is directed to delete this addition. However, in respect of the cash deposit of Rs.6.66 lakhs, it is stated that Rs.4,46,500/- is out of voluntary surrender made by the assessee during the course of survey. Hence, the A.O. is directed to delete this addition. In respect of the remaining amount of Rs.2,10,000/-, it is stated to have been received from the realisation of sale proceeds. The assessee has not filed any confirmation from the debtors. Hence, the addition of Rs.2,10,000/- is sustained. This ground of assessee’s appeal is partly allowed.
[ Sudhir Kumar Jain, Dist. Ratlam] ]
In respect of Ground No.4, it is stated that the amount of credit entries during the whole year in the savings bank account of wife of the assessee Smt. Jyotibala Jain, who is assessed to tax and the amount was properly reflected in the books of accounts has been added. In support of this, the assessee has filed her return of income of the current and earlier years were filed and as per the balance sheet, as on 31.3.2005 & 31.3.2004, accumulated capital was Rs.3,40,578/- and Rs.4,08,721/-. Looking to the evidences submitted and more particularly, the amount which has been credited in the account of the wife of the assessee who herself is assessed to tax, it is also informed that no action has been taken in her hands. I therefore, under these facts cannot sustain these additions.
Accordingly, the A.O. is directed to delete this addition. Ground No.4 is allowed. [ Sudhir Kumar Jain, Dist. Ratlam] ]
In the result, the appeal filed by the assessee in for the A.Y. 2004-05 is partly allowed.
Order was pronounced in the open court on 26 .12.2019.