Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK
Before: S/SHRI N.S SAINI & PAVAN KUMAR GADALE
per square feet. Rather, the documents found during the course of
survey have more precedence with more evidential value. The assessee
has admitted the undisclosed on this account as apparent as apparent
and offered to file the revised return disclosing such income. In view of
above, the Assessing Officer added the balance income of Rs.25,04,095/-
(Rs.4,71,532 – Rs.69,67,437/-) to the total income of the assessee.
Similarly, the Assessing Officer required the assessee to prove the
expenses of Rs.36,27,893/- claimed in the profit and loss account. The
assessee filed supporting evidences in share of vouchers and registers.
The Assessing Officer observed that the vouchers produced are self made
and not fully verifiable and cash payments were made in most of the
case. In view of above, the Assessing Officer disallowed 10% of total
expenses of Rs.36,27,893/- and added Rs.3,62,790/- to the income of the
assessee.
On appeal, with regard to commission payment, in the written
submission, it was stated as under:
i) The statement given during the survey was a provisional and not the final. ii) The director of the assessee company was not aware of the accounts and made the statement out of pressure. iii) The commission was not declared as income as Asiana Homes Pvt Ltd., did not confirm the amount. However, statement was made to furnish detailed calculation on 23.11.2012 after consultation with Asiana Homes Pvt Ltd.
4 ITA No . 417/CT K/ 2016 Asse ssment Year : 20 12- 13
iv) The AO has not found any mistake or non-disclosure of income by the assessee. v) Although during the survey, it was submitted to file the revised return, but later on it was not found that commission income should be increased and, therefore, the original income filed was correct. vi) Several judicial pronouncements on this issue was referred by the assessee. 7. The CIT(A) confirmed the action of the Assessing by observing as
under:
“2,2 I have considered the matter and perused the materials on record. It is a fact that in the course of survey proceeding, a sheet of paper was found in the business premises of the assessee wherein the amount of commission due to the assessee from the joint developer M/s. Asiana Homes (P).Ltd. was calculated at Rs.94,71,532/- as on 26.12.2011. Based on this calculation, the assessee, in the course of survey admitted that the commission due from M/s. Asiana Homes (P) Ltd. which had not been disclosed as income in the return already filed would be disclosed after checking up of the facts and figures and a revised return would be filed. Accordingly, a revised return was filed after the survey but the amount of commission shown in that return stood at Rs.69,67,437/- only. In the course of assessment proceeding, the assessee filed a calculation sheet before the AO and claimed that the calculation of commission at Rs.94,71,532/- in the sheet of paper found at the time of survey was not correct and the correct calculation would be Rs.69,67,437/-, However, no satisfactory evidence was filed before the AO in support of the calculation of commission at Rs.69,67,437/-. In the course of appeal hearing, the same calculation sheet has been filed and it is contended that the calculation has been made correctly. However, in absence of any supporting evidence, the calculation so made cannot be accepted as correct and authentic. No confirmation from the joint developer M/s. Asiana Homes (P) Ltd. has been filed either before the AO or before the undersigned to show that the commission due to the assessee for the previous year 2011-12 is actually Rs.69,67,437/-. In view of this, the action of the AO to consider the amount of commission at Rs.94,71,532/- cannot be questioned. Hence, the addition of Rs.25,04,095/-on account of commission is confirmed.”
5 ITA No . 417/CT K/ 2016 Asse ssment Year : 20 12- 13
Before us, ld A.R. submitted that during the course of survey
conducted by the revenue on 20.11.2012, a statement was found
regarding the provision for commission income computed at Rs.94,71,532
as on 26.12.2011. It was stated that it is a provision and not a final one.
This statement was given by the Director of the assessee, who is fully
unware f the accounts to disclose such higher commission under pressure.
However, the Director promised to furnish the detailed calculation on
23.11.2012 after consultation with Asiana Homes Pvt. Ltd. Ld A.R.
submitted that the assessee had admitted increased commission income
but at the time of filing revised return based on the survey does not finds
that the commission income should be increased and the amount of
commission income filed at the time of original was correct. Ld A.R. relied
on the decision of Mumbai Benches of the Tribunal in the case o DCIT s.
Samta Marine Kakinada, 18 SOT 135 (Mum), wherein, it was held that in
the absence of any material on record that the expenditure was false, no
addition could be made merely on the basis of disclosure made during
survey. He also stated that same view has been taken by the Delhi
Benches of the Tribunal in the case of ACIT vs Smt. Usha Rani
Talla,(2010) 6 ITR (Trib) 37(el). Ld A.R. also relied on the decision of
Hon’ble Madras High Court in the case of CIT vs. S.Khader Khan Son
(2008) 300 ITR 157 (Mad), wherein, it was held that statement taken
during the survey u/s.133A has no evidentiary value as section 133A does
not empower the Assessing Officer to administer oath and take a sworn
6 ITA No . 417/CT K/ 2016 Asse ssment Year : 20 12- 13
statement. He, therefore, prayed that since the Director of the assessee
company had stated to file the revised return with enhanced income on
commission but later on it was found that there was no enhanced
commission income, therefore, it was stated that no enhanced
commission should be shown.
Contra, ld D.R. supported the orders of lower authorities.
We have heard the rival submissions, perused the orders of lower
authorities and materials available on record. In the instant case, during
the course of survey operation, a sheet of paper was found in the
business premises of the assessee wherein the amount of commission due
to the assessee from the joint developer M/s. Asiana Homes (P).Ltd. was
calculated at Rs.94,71,532/- as on 26.12.2011. Based on this calculation,
the Director of the assessee, in the course of survey admitted that the
commission due from M/s. Asiana Homes (P) Ltd. which had not been
disclosed as income in the return already filed would be disclosed after
checking up of the facts and figures and a revised return would be filed. It
is the contention of ld A.R. that the Director of the assessee company
was not aware of the financial transactions of the assessee but under
duress stated that if there is any enhanced commission income, a revised
return would be filed after the survey. But later on when it was found
there was no enhanced commission income, in the revised return it was
7 ITA No . 417/CT K/ 2016 Asse ssment Year : 20 12- 13
stated that the amount of commission shown in that return stood at
Rs.69,67,437/- only. In the course of assessment proceeding, the
assessee filed a calculation sheet before the AO and claimed that the
calculation of commission at Rs.94,71,532/- in the sheet of paper found
at the time of survey was not correct and the correct calculation would be
Rs.69,67,437/-. We find that the CIT(A) in his order has stated that no
confirmation from the joint developer M/s. Asiana Homes (P) Ltd. has
been filed either before the AO or before him to show that the commission
due to the assessee for the previous year 2011-12 is actually
Rs.69,67,437/-. We also find force in the submission of ld A.R. of the
assessee based on judicial decisions that statement taken during survey
u/s.133A has no evidentiary value as section 133A does not empower the
Assessing Officer to administer oath. We find that if the assessee has
adhered to his first disclosed amount of Rs.69,67,437/-, it was the duty of
the department to call M/s. Asiana Homes (P) Ltd., to confirm the
commission. In view of above, in order to render substantial justice to
the assessee, we set aside the order of the CIT(A) and remit the matter
back to the file of the Assessing Officer to confirm from the joint
developer M/s. Asiana Homes (P) Ltd. regarding actual commission
payment and pass a fresh assessment order as per law after affording
reasonable opportunity of hearing to the assessee.
Since we have restored the issue of commission to the file of the
Assessing Officer, the other ground regarding disallowance of expenses
8 ITA No . 417/CT K/ 2016 Asse ssment Year : 20 12- 13
paid of Rs.1,81,395/- is also restored to the file of the Assessing Officer
for fresh adjudication.
In the result, appeal of the assessee is allowed for statistical
purposes.
Order pronounced on 28 /02/2018. SD/- SD/- (N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Cuttack; Dated 28 /02/2018 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : SJ Developers & Housing Pvt Ltd., Plot No.A/103, Miknik Mall, Rajdhani Gas Building Opp. ISCON Tmple, Bhubaneswar 2. The Respondent. ACIT, Corporate Circle 1(2), Bhubaneswar 3. The CIT(A)-1, Bhubaneswar BY ORDER, 4. Pr.CIT-1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. SR.PRIVATE SECRETARY //True Copy// ITAT, Cuttack