SHRI GULREZ KHAN,UJJAIN vs. THE DCIT, RATLAM

Brief facts of the case as culled out from the records are that the assessee is an individual engaged in the business of Hotel and Travel Agency. A survey u/s 133A of the I.T. Act 1961 was carried out on the business premises of the assessee on 25.09.2012. During the course of survey additional income of Rs.3,50,62,772/- was offered to tax on account of excess cash of Rs.8,80,060/- undisclosed investment of Rs.1,31,00,000/- in construction of Hotel Hilton Tower, undisclosed investment of Rs.69,29,812/- for Imran Marriage Hall, on account of Commission of Rs.43,52,900/- and on account of property of Rs.98,00,000/- with Shri Chechani. However out of above declaration, the assessee has declared only Rs.94,50,000/- in his return of income. During the course of assessment proceedings assessee was asked to justify as to why the income of Rs.94,50,000/- offered to tax as against Rs.3,50,62,772/- declared during the course of survey. Assessee gave detailed submissions which did not find any favour by the Ld. AO. The Ld. AO after giving recording observation made addition for Income from other source at Rs.2,56,12,772/-, disallowance u/s 40A(3) of the Act at Rs.88,550/- and addition in respect of undeclared receipt at Rs.2,87,492/- thereby, assessing income at Rs.3,56,14,914/- as against the income declared at Rs.96,26,100/- in the Income Tax Return filed on 28.03.2015 which was selected for scrutiny assessment by servicing of notices u/s 143(2) & 142(1) of the Act.

Aggrieved assessee preferred an appeal before the ld. CIT(A) but failed to succeed.

Now the assessee is in appeal before the Tribunal raising following grounds: (1) Ld. CITCA) erred in confirming addition of Rs. 25,12,930/- as undisclosed investment in Marriage Hall in addition to amount of Rs.44,16,882/ - already declared by the appellant by rejecting the retraction made by the appellant and ignoring the facts on record. (2) Ld. CITCA) erred in confirming addition of Rs. 98,00,000/- as undisclosed income being receipt as per agreement to sell found in course of survey rejecting retraction of disclosure made at the time of survey and ignoring the facts on record. (3) Ld. C!T(A) erred in confirming addition of Rs. 1,31,00,000/- for unexplained investment in the hotel building on the basis of valuation report and after rejecting retraction ignoring blatantly the clear facts on record. (4) Id. CIT(A) erred in confirming addition as per previous ground of appeal taking market value of land at Rs. 79,00,000/- despite the fact that land was already acquired in earlier year and shown as such in that year:; Return of Income. He simply went by disclosure made at the time of survey and ignored vital facts on record. (5). Id. CIT(A) erred in not giving set off of Rs. 43,52,900/- being income earned while working out unexplained investment and confirmed the addition on the basis of disclosure made at the time of survey ignoring the facts on record and ignoring the basic principle that either income can be added or investment but not both. He thus confirmed double addition of the same income. (6) ld. CITCA) erred in confirming addition of Rs. 88,550/- u/s:, 40A(3). (7) Ld. CIT(A) erred in confirming addition of Rs. 287492/- as undeclared receipt. 3

We have heard rival contentions and perused the record placed before us. The assessee has raised various grounds running from 1 to 9 challenging various additions confirmed by the Ld. CIT(A) which were made by the Ld. AO. In the survey action u/s 133A of the Act conducted at the business premises of the assessee on 25.09.2012, additional income of Rs.3,50,62,772/- was offered for tax by the assessee but in the return of income filed subsequently, only income of Rs.94,50,000/- was declared. So there was a short fall in declaration of Rs.2,56,12,772/-. This amount was added by the ld. AO along with other minor disallowance of Rs.3,76,042/-. Assessee failed to get any relief by Ld. CIT(A).

Before us Ld. counsel for the assessee contended that various material facts which were going to the root cause to the addition made in the hands of assessee could not be placed before the Ld. CIT(A) due to unavoidable circumstances. It has been judicially well established that the additions in the course of survey cannot be made, merely on the basis of statements since they have no evidentiary value as they are not given under oath. The revenue authorities had to connect the additions with material facts including incriminating material found during the course of survey.

We, therefore, in the given facts and circumstances of the case and submissions made by Ld. counsel for the assessee and in the interest of justice and being fair to both the parties, restore all the issues raised in this appeal to Ld. CIT(A) for afresh adjudication and also direct the assessee to place all material facts in support of the contention that excessive addition has been made by the Ld. AO. The Ld. CIT(A) after appreciating the same may decide as per the provisions of law. Needless to mention that proper opportunity of being heard to be provided to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes.