2015 (7) TMI 1309 - AT - Income Tax

Tribunal reduces undisclosed income addition in Revenue's appeal, citing unreliable records and limited information.

A.C.I.T., Gwalior Versus Shri Om Prakash Kukreja,

A.C.I.T., Gwalior Versus Shri Om Prakash Kukreja, - TMI Issues: Appeal against deletion of addition of undisclosed income surrendered during survey operation.The judgment pertains to an appeal by the Revenue against the deletion of an addition of undisclosed income surrendered during a survey operation for the assessment year 2007-08. The only ground of appeal raised by the Revenue was whether the CIT(A) erred in deleting the addition of Rs. 24,09,475 made on account of the undisclosed income surrendered. The Department conducted a survey operation where a difference in stock was found compared to the record of the assessee, leading to an initial surrender by the assessee of Rs. 24,75,000. However, the assessee retracted the statement after a year. The Revenue argued that the delay in retraction justified the addition made on account of the stock difference. The physical verification of stock was done, and the addition was not solely based on the assessee's statement but also on the inventory of stock found during the survey. The Tribunal found that while the addition was justified, the full amount added by the AO was not warranted. The supervisor of the assessee lacked knowledge of the stock prices, and the inventory did not mention the location of the raw material found during the survey. The Tribunal concluded that the account books of the assessee were unreliable, and restricted the addition to Rs. 10,00,000 as an estimate and on the preponderance of probabilities, instead of the original Rs. 24,09,475. Hence, the appeal of the Revenue was partly allowed, and the judgment was pronounced on 24th July 2015.