ITO, BEHROR vs. RAMESH CHAND SONI, KOTPUTLI

PER SHRI KUL BHARAT, JM. These two cross appeals by the revenue and the assessee are directed

against the order of Ld. Commissioner of Income Tax (Appeals), Alwar, dated 2/11/2010 pertaining to the assessment year 2002-03. First, we take up revenue’s

appeal in ITA No. 87/JP/2011. The revenue has raised following grounds of appeals :-

Rs. 3,70,280/- from Rs. 13,82,826/-.

Tax Act, 1961 (hereinafter referred to as the Act) was carried out at the business

premises of the assesee on 10/8/2001. During the course of survey, the assessee

admitted, undisclosed income at Rs. 47 lacs but in the Income Tax return he

disclosed only Rs. 27,85,500/-. Subsequently, the assessment was completed under

Section 143(3) on 30/3/2005 and assessed the total income at Rs. 78,33,390/- as

against declared income of Rs. 30,83,000/-. In appeal, the Ld. CIT (Appeals)

confirmed the addition to the extent of Rs. 48,46,227/- including returned income.

The Assessing Officer also initiated penalty proceedings and imposed penalty vide order dated 17th March, 2008 of Rs. 13,82,626/-. The assessee aggrieved by this,

preferred an appeal before Ld. CIT (Appeals) who after considering the submissions

partly allowed the appeal thereby the Ld. CIT (Appeals) deleted the penalty in

respect of the amount invested in the building. The ld. CIT (A), however, affirmed

the action of the Assessing Officer in respect of the undisclosed Income of Rs.

9,00,000/-. It is observed by Ld. CIT (A) that out of addition of Rs. 14,03,225/-, the

addition of Rs. 6,53,225/- was confirmed by the Tribunal. Out of addition of Rs.

4,33,825/-, the ld. CIT( Appeals) restricted the penalty of Rs. 67,500/- and Rs.

1,41,900/- in respect of the concealed income. Aggrieved by this order, both the

revenue and the assessee have filed the appeals before this Tribunal.

not justified in restricting the penalty.

written submissions, he submitted that so far revenue’s appeal is concerned, he

supported the order of ld. CIT(A).

and gone through the orders of the lower authorities. There is no dispute with

regard to the fact that the AO levied penalty on sum of Rs. 27,48,500/- which was

duly disclosed in the return of income on the ground that had survey would have

not taken place, the assessee might have not disclosed this income. In our view,

this act of AO is contrary to the provisions of law and settled law. Therefore, we do

not see any infirmity into the order of Ld. CIT (A). Hence, the appeal of the

Revenue is dismissed.

the assessee has taken following grounds of appeals.

submissions as made in the written submissions and additional written submission.

It is contended that the assesesse had filed the return of income declaring income

of Rs. 30,83,000/-. The Assessing Officer, however, assessed the income at Rs.

78,33,390 and capital of Rs. 14,66,000/-. The matter travelled up to the stage of

Tribunal. The disallowances of addition as sustained by the Hon’ble ITAT have been

tabulized by the Assessing Officer at page nos. 1 and 2 of his order. He Submitted

that it was contended before the ld. CIT(A) that assessing officer do not appreciate

the factual aspect that the assessee in answer to question no. 2 of his statement

dated 21/08/2008 has clearly stated that the source of purchases of these trucks

was a loan raised from the friends. He submitted that sole reliance of the statement

as taken during the course of survey is not correct, on the part of the assessing

officer, he further submitted that it is settled position of law that there is no

evidential value of statement taken during the survey. He submitted that merely

because the assessee had not raised this ground against the addition of Rs.

9,00,000/-, it can not be inferred against the assessee.

the Ld. CIT(A).

and gone through the orders of the authorities below. We find that there is no

dispute with regard to the fact that qua these two additions same have been

sustained till the stage of ITAT and the ld. CIT(A) has given a finding of fact in his

order that this was not raised before the Tribunal. Therefore, the addition as made

was the part of the concealed income cannot be disputed. We therefore find no

infirmity into the order of the ld. CIT(A), the same is hereby affirmed. Ground no. 1

and 2 of the assessee’s appeal are dismissed.

Counsel for the assessee relied upon the submission made before the ld. CIT(A).

this addition of Rs. 67,500/- on the basis that the assessee had given a loan of Rs.

5 lakhs to shri Ashok which was not given for the purpose of business. Hence,

computed the notional income @ 1.5%. In our considered view, since this issue is

debatable with regard to interest rate to be charged, hence imposition of penalty on

this addition is not justified. We therefore direct the Assessing Officer to delete the

penalty on the amount of Rs, 67,500/-.

1,41,900/- on account of sale proceeds of old tyres. The Ld. Counsel for the

assessee relied upon the submissions made before the Ld. CIT(A) and submitted

that the Ld. CIT(A) did not judicially appreciate that the assessee having declared

the income under section 40A on the estimated basis on the trucks. Under

consideration, there was no necessity of making any separate disallowance or

addition which is a law well settled.

the authorities below.

contention of the Ld. Counsel for the Assessee that merely because the assessee has

been showing income on estimated basis, he was not required to disclose the

receipts on account of sale of old tyres. Therefore, we see no infirmity into the

order of the ld. CIT(A). This ground of the assessee’s appeal is rejected.

appeal of the Assessee is partly allowed.

the assess is partly allowed.

Order is pronounced in the open court on: 16.02.2017.

Sd/- Sd/- ( HkkxpUn ½ ( dqy Hkkjr) ( BHAGCHAND) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 16.02.2017. POOJA:- आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत