COMMISSIONER OF INCOME TAX vs. SUBHASH CHAND

PDF · subscribers
ITA - 875 / 2010HC Delhi16 July 20104 pages
For Petitioner: SONIA MATHUR
AI SummaryDismissed

What did the High Court hold?

The tribunal held that an admission made during a survey cannot be the sole basis for an addition if the assessee subsequently retracts it with supporting evidence. The assessee had provided evidence to support their book results, which were not found to be unreliable.

What were the facts?

A survey was conducted on the assessee's premises, leading to an addition of Rs. 10,83,540 based on the assessee's admission during the survey. However, the assessee later withdrew this admission, claiming no excess stock, cash, or renovation expenses.

What were the issues?

Whether an addition made solely on the basis of an admission during a survey can be sustained when the admission is retracted with supporting evidence. Whether a substantial question of law arises from the ITAT's decision to delete the addition.

Which sections of the Income-tax Act were involved?

Section 133A,Section 260A

AI-generated summary — verify with the full judgment below

ITA 875/2010 Page 1 of 4

13 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 875/2010

COMMISSIONER OF INCOME TAX ..... Appellant

Through: Ms. Sonia Mathur, Advocate.

versus

SUBHASH CHAND

..... Respondent

Through: None.

Date of Decision: 16th July, 2010

CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN

1.

Whether the Reporters of local papers may be allowed to see the judgment? No 2. To be referred to the Reporter or not?

No 3. Whether the judgment should be reported in the Digest?

MANMOHAN, J (Oral)

CM APPL. 11963/2010 This is an application for condonation of delay of 76 days in re- filing the appeal. 2010:DHC:3508-DB

ITA 875/2010 Page 2 of 4

For the reasons stated in the application, delay of 76 days in re- filing the appeal is condoned. Accordingly, application stands disposed of. ITA 875/2010

1.

The present appeal has been filed under Section 260A of Income Tax Act, 1961 (for brevity “Act 1961”) challenging the order dated 30th April, 2009 passed by the Income Tax Appellate Tribunal (in short “ITAT”) in ITA 4246/Del/2005. 2. Ms. Sonia Mathur, learned counsel for appellant submits that both the ITAT and Commissioner of Income Tax (Appeals) (in short “CIT(A)”) have erred law in deleting the addition of Rs.10,83,540/- made by the assessing officer on account of surrender made by the assessee during the course of survey under Section 133A of Act, 1961. 3. Briefly stated the material facts of the case are that on 08th March, 2002, a survey operation was conducted on the assessee’s business premises under Section 133A of the Act, 1961. During the course of survey, stock inventory, trading account and inventory of cash was prepared and the statement of assessee was recorded. On the basis of assessee’s admission, the assessing officer made addition of Rs.10,83,540/- to the income declared. The addition consisted of Rs.7,03,540/- on account of excess stock, Rs.2,75,000/- on account of showroom renovation and Rs.1,05,000/- on account of excess cash 2010:DHC:3508-DB

ITA 875/2010 Page 3 of 4

found. 4. However, immediately thereafter, on 13th March, 2002 assessee withdrew the admission and stated that there was neither excess cash nor stock or expense incurred on renovation. 5. Both the CIT(A) and ITAT have found that assessee had filed books of accounts along with necessary supporting evidence like sale/purchase bills, cash books and ledger etc. They have further found that books result have been rejected by the assessing officer on the sole reason that the purchase bills had not been produced; even though as per letters dated 13th March, 2002 and 22nd January, 2003, the purchase bills had been filed. Consequently, according to ITAT, the assessing officer could not have rejected the books results. In fact, the ITAT has, in the impugned order, concluded as under:- “We, therefore, hold that no credence can be given solely to the admission during survey for the purpose of making addition. The assessee has demonstrated that there was neither excess stock nor excess cash nor any expenditure on furniture or renovation etc. We, therefore, uphold the order of the learned CIT(A)”

6.

We are of the opinion that in law an assessee is entitled to explain his admission. In the present case, the assessee has duly supported his retraction with the book results by filing necessary evidence. Since in the present case, there is neither any finding that the book results are unreliable and/or that any investment has been made in 2010:DHC:3508-DB

ITA 875/2010 Page 4 of 4

renovation of showroom, we are of the opinion that no substantial question of law arises in the present appeal.

7.

Accordingly, appeal is dismissed in limine but with no order as to costs.

MANMOHAN, J

CHIEF JUSTICE JULY 16, 2010 js 2010:DHC:3508-DB

More judgments on Section 133A

All 5,893 judgments and leading authorities on Section 133A →

Recent GST High Court judgments

Search GST case law →