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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: Shri G Manjunatha & Shri Ravish Sood
Date of hearing 04 -07-2018 Date of pronouncement 14-08-2018 O R D E R
Per G Manjunatha, AM :
This appeal filed by the assessee is directed against order of the CIT(A)-11, Thane dated 27-10-2016 and it pertains to AY 2012-13. The assessee has raised the following grounds of appeal:-
“1. The Learned Commissioner of Income Tax (Appeals) 11 on facts and in the circumstances of the case and in law erred in confirming Rs.50,00,000/- which was on account of declaration of cash on hand at the time of search proceedings, however the said amount had already been offered in the Income Tax Return of AY 2013-2014.”
The brief facts of the case are that the assessee is a partnership
2 ITA 98/Mum/2017 firm engaged in the business of real estate development. A search action u/s 132 of the Ac,t was conducted on the SMC group on 23-05- 2012. The assessee being part of SMC group was also covered under search action. During the course of search, incriminating material found in the premises of M/s Rohit Infra Projects Pvt Ltd showed that the assessee has made various cash payments in respect of its purchases which were outside the books of account. When such incriminating material was confronted to the assessee, Shri Bhuleshwar Mishra, partner of the assessee firm, in the statement recorded u/s 132(4) of the Act admitted to have incurred various expenditure in cash outside the books of account and accordingly, admitted undisclosed income of Rs.50 lakhs for the AY 2012-13. Consequent to search, notice u/s 153A of the Act was issued on 31-07-2013. In response to the notice, the assessee has filed its return of income on 24-03-2014. The case has been selected for scrutiny and notices u/s 143(2) and 142(1) of the Act were issued. In response to notices, the authorized representative of the assessee appeared from time to time and filed various details, as called for. During the course of assessment proceedings, AO noticed that though assessee has admitted undisclosed income of Rs.50 lakhs during search proceedings, failed to admit such undisclosed income in return of income filed in response to notice u/s 153A, therefore, called
3 ITA 98/Mum/2017 upon the assessee to explain as to why addition should not be made in respect of undisclosed income declared in statement u/s 132(4) of the Act. In response to show cause notice, the assessee, vide it letter submitted that during the course of search, by mistaken of facts, it has admitted undisclosed income of Rs.50 lakhs for the AY 2012-13 on account of cash transactions from Alibaug project, whereas the said undisclosed income pertains to AY 2013-14 and accordingly, the assessee has disclosed undisclosed income of Rs.50 lakhs in the return of income filed for the assessment year 2013-14. For this, filed necessary details including copies of income-tax return to prove admission of income for the AY 2013-14. The AO, after considering relevant submissions of the assessee observed that although the assessee has admitted undisclosed income for AY 2012-13, without any valid retraction, failed to admit such undisclosed income even though the incriminating material clearly establishes that such undisclosed income pertains to AY 2012-13. Accordingly made addition of Rs.50 lakhs to the total income of the assessee.
Aggrieved by the assessment order, the assessee preferred appeal before the CIT(A). Before the CIT(A), the assessee has reiterated its submissions made before the AO to argue that the undisclosed income admitted during the course of search, in fact , pertains to AY 2013-14,
4 ITA 98/Mum/2017 but by mistaken understanding of the facts, the same has been admitted for AY 2012-13. Assessee further submitted that it has disclosed undisclosed income of Rs.50 lakhs in the return of income filed for AY 2013-14, therefore, the AO was erred in making further addition of Rs.50 lakhs for the year under consideration only on the basis of search statement. The Ld.CIT(A), after considering relevant submissions of the assessee and also taking into account statement recorded during the course of search observed that incriminating material found during the course of search clearly establishes undisclosed income pertaining to AY 2012-13 and this fact has been categorically admitted by the partner in the statement recorded u/s 132(4). Therefore, there is no merit in the arguments of the assessee that it has admitted undisclosed income for AY 2012-13 by mistake understanding of facts. Accordingly, confirmed addition made by the AO. Aggrieved by the order of Ld.CIT(A), the assessee is in appeal before us.
The Ld.AR for the assessee submitted that the Ld.CIT(A) failed to appreciate the fact in the light of evidences filed by the assessee that addition cannot be made twice on any income when assessee has filed necessary evidence before the AO to prove tht such income has been admitted for AY 2013-14 and also explained the reasons for not admitting undisclosed income for AY 2012-13. The Ld.AR referring to 5 ITA 98/Mum/2017 the copy of ITR filed for AY 2013-14 submitted that the assessee has admitted undisclosed income of Rs.50 lakhs and also paid taxes and hence, any further addition for the same amount during the current year amounts to double addition and, therefore, the addition made by the AO should be deleted.
On the other hand, the Ld.DR strongly supported order of the CIT(A).
We have heard both the parties and perused material available on record. There is no dispute with regard to the fact of admission of additional income of Rs.50 lakhs in the statement recorded u/s 132(4) of the Income-tax Act, 1961. The assessee has admitted undisclosed income of Rs.50 lakhs for AY 2012-13. Although, the assessee has admitted undisclosed income for AY 2012-13, failed to disclose such income in the return of income; however, disclosed the same in the assessment year 2013-14. According to the assessee, it has admitted undisclosed income for AY 2012-13 by mistaken understanding of facts, whereas the said income, in fact, pertains to AY 2013-14. The AO has made addition only on the basis of statement recorded during the course of search ignoring the fact that the assessee has admitted such undisclosed income for AY 2013-14. The disclosure of undisclosed income for AY 2013-14 has not been disputed by the AO. The AO has 6 ITA 98/Mum/2017 made addition only on the basis of declaration in the statement recorded u/s 132(4). Except this, the AO has not given any reasons for not accepting return filed by the assessee for AY 2013-14 admitting undisclosed income of Rs.50 lakhs. No doubt, the assessee has not filed any retraction not to admit undisclosed income for AY 2012-13, but that by itself would not be a ground for the AO to make addition towards undisclosed income in the current assessment year, when he has not disputed the fact that the assesee has disclosed undisclosed income in the assessment year 2013-14. Therefore, we are of the considered view that when there is no difference in rate of tax for both the assessment years, i.e. AYs 2012-13 and 2013-14, there is no reason for the AO to make further addition of Rs.50 lakhs in the current assessment year when the assessee has already disclosed undisclosed income for AY 2013-14. Moreover, it is tax neutral as income is liable for same rate of tax for both the assessment years. Therefore, we are of the considered view that once, a particular income is offered to tax in one year, further addition cannot be made for same in another year. In this case, the assessee claims that it has disclosed Rs.50 lakhs in AY 2013-14. To this effect filed ITR copy for AY 2013-14. We do not know, whether these documents are filed before AO or not. Hence, we set aside the issue to the file of AO to verify the claim of assessee and if AO found
7 ITA 98/Mum/2017 that undisclosed income of Rs.50 lakhs is offered in AY 2013-14, then the AO is directed to delete addition made for this year. 7. In the result, the appeal filed by the assessee is allowed, for statistical purpose.
Order pronounced in the open court on 14th August , 2018.