Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI ANIL CHATURVEDI
आदेश / ORDER PER ANIL CHATURVEDI, AM :
This appeal filed by assessee is emanating out of the order of Commissioner of Income Tax (Appeals) – 1, Nashik dated 06.03.2017 for A.Y. 2013-14.
The relevant facts as culled out from the material on record are as under :-
Assessee is an individual stated to be Proprietor of Raj Electricals which is engaged in dealing in Electrical goods. In this case, Department had conducted survey u/s 133A of the Act on 21.11.2012 wherein the discrepancy with respect to excess stock and excess cash was found.
Assessee had voluntarily agreed for the additional income of Rs.5 lakhs
in addition to the regular income. Assessee thereafter in the return of
income filed electroncially for A.Y. 2013-14 declared the total income of
Rs.4,86,290/-. The case was selected for scrutiny and thereafter
assessment was framed u/s 143(3) of the Act vide order dated
11.03.2016 and the total income was determined at Rs.11,06,290/-.
Aggrieved by the order of AO, assessee carried the matter before
Ld.CIT(A), who vide order dated 06.03.2018 (in appeal No.Nsk/CIT(A)-
1/715/2015-16) dismissed the appeal of the assessee. Aggrieved by the
order of Ld.CIT(A), assessee carried the matter before the Tribunal. Since
there was no appearance on behalf of assessee, the Tribunal vide order
dated 22.06.2018 in ITA No.1212/PUN/2017 dismissed the appeal of the
assessee. Thereafter, assessee moved an M.A. praying for recalling of
the order. After considering the submissions of assessee, the Tribunal in
M.A.Nos.14 & 15/PUN/2019 vide order dated 01.03.2019 recalled the
order passed in ITA No.1212/PUN/2017 for A.Y. 2013-14. Thus, the
assessee is now in appeal in 2nd round. The grounds raised by the
assessee reads as under :
“1. The learned CIT(A) erred in. confirming the addition of Rs.5,00,000/- made by the A.O. without appreciating the said addition was not justified in law.
The learned CIT(A) erred in holding that the addition of Rs.5,00,000/- was justified on the ground that in the course of survey statement recorded u/s 133A, the assessee had declared additional income of Rs.5,00,000/- on being unable to explain the sources of stock and cash found on date of survey and hence, he cannot go back on his declaration once the income was declared in the survey statement.
The learned CIT(A) failed to appreciate that that in the balance sheet and return of income filed post survey, the sources of the stock and cash were duly explained by the assessee and the dept. had not pointed out any discrepancy in the sources explained by the assessee and hence, the addition made solely on the basis of the declaration made in the statement u/s 133A was not justified in law.
The learned CIT(A) further erred in confirming the addition of made by estimating household expenses without Rs.1,20,000/- appreciating that the assessee had already declared returned income of Rs.4.86 lacs which was more than enough to explain the source of household expenditure and hence, the above addition made on the basis of presumption and surmises was not justified in law.”
All the grounds being inter-connected are considered together.
AO noted that during the course of survey u/s 133A of the Act
discrepancy with regard to discrepancy in stock of Rs.11,69,932/- and
excess cash of Rs.70,462/- was found. Assessee had voluntarily agreed
to declare the additional income of Rs.5,00,000/-. AO noted that
however in the return of income filed by the assessee, subsequent to
survey assessee had not included the admitted additional income of Rs.5
lakhs. The assessee was asked to explain as to why the additional
income admitted during the course of survey has not offered to tax in the
return of income. In the absence of any satisfactory explanation, AO
noted that the additional income offered by the assessee was voluntary
and there was nothing to show that the admission was extracted under
any undue influence or coercion. He therefore held the additional
income admitted by the assessee during the course of survey be brought
to be tax and thus made addition of Rs.5 lac. AO also noted that
assessee has not filed capital account and family details and he was
therefore of the view that household expenses could not be examined
properly and therefore he estimated the drawings of the assessee at
Rs.1,20,000/- and made its addition. Aggrieved by the order of AO,
assessee carried the matter before Ld.CIT(A), who upheld the additions
made by the AO. Aggrieved by the order of Ld.CIT(A), assessee is now in
appeal.
Before me, Ld.A.R. reiterated the submissions made before AO and
Ld.CIT(A) and further submitted that the addition of Rs.5 lakhs has been
made merely on the basis of admission of additional income by the
assessee during the course of survey. He submitted that the statement
recorded during the course of survey does not carry any evidentiary
value and for which he placed reliance on the decision of Hon’ble Apex
Court in the case of CIT Vs. M/s. S. Khadar Khan Son reported in 300
ITR 157. He further submitted that apart from making the addition of
Rs.5 lakhs, AO has also made addition of Rs.1,20,000/- on account of
low household expenses which is also not based on evidence. He
therefore submitted that addition be deleted. He alternatively submitted
that when the addition has already been made of Rs.5 lakhs, further
addition of Rs.1,20,000/- is uncalled for, more so as there is no basis for
its addition and therefore the addition be deleted. Ld. D.R. on the other
hand supported the order of AO and Ld.CIT(A).
I have heard the rival submissions and perused the material on
record. I find that Ld.CIT(A) after considering the decision cited by the
assessee and various other decisions cited in the order has noted that
there was no retraction of additional income by the assessee nor any
material has been placed by assessee to show that the additional income
was admitted by coercion or undue pressure. He has thus concluded
that non-declaration of admitted income was a well planned devise to
frustrate the efforts of the Department to unearth unaccounted income.
These findings of Ld.CIT(A) has not been controverted by assessee. In
such a situation, I find no reason to interfere with the order of Ld.CIT(A)
as far as addition of Rs.5 lac is concerned. With respect to addition of
Rs.1,20,000/- on account of low house hold expenses, I am of the view
that once the addition of Rs.5 lakhs has been made in the present case, it would take care of the addition of low household expenses of Rs.1,20,000/- and in such a situation, separate addition on account of low household expenses is not called for and therefore, I direct to delete the addition of Rs.1,20,000/-. Thus, the grounds of the assessee are partly allowed.
In the result, the appeal of the assessee is partly allowed.
Order pronounced on 25th day of October, 2019.
Sd/- (ANIL CHATURVEDI) लेखा सद�य / ACCOUNTANT MEMBER
पुणे Pune; �दनांक Dated : 25th October, 2019. Yamini
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A)-1, Nashik. 4. Pr. CIT-1, Nashik. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक सद�य” / 5 DR, ITAT, “SMC” Pune; गाड� फाईल / Guard file. 6.
आदेशानुसार/ BY ORDER
// True Copy // // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.