TaxTMI 
TaxTMI 
2012 (10) TMI 894
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....al questions of law:- "A. Whether the ITAT is justified in directing the AO to take the rate of Rs. 600/- against Rs. 428/- shown by the assessee and arbitrarily adopted at Rs. 800/- by the AO merely on the uncorroborated statement of a low-paid employee? B. Whether the order of the Tribunal is perverse as it has failed to appreciate that the discrepancies found at the time of survey were later on reconciled and to the extent of reconciliation, the additions ought not to have been upheld?" 2. Briefly stated the facts necessary for adjudication of the present appeal are that on 20.3.2007, a survey under Section 133A of the Act was conducted at the business premises of the assessee. During survey, the assessee surre....
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....to the tune of Rs.3,23,999/- only. The addition of the entire amount was, thus, bad in law and the assessee was entitled to relief to the extent of Rs. 27,16,001/-. 7. After hearing the learned counsel for the appellant and perusing the record, we do not find any merit in the same. The Assessing Officer while rejecting the aforesaid contention of the assessee had recorded as under:- "At the time of the survey on 20.03.2007, inventory of cash of Rs. 33,40,950/- was prepared. On the date of survey, Sh. Harbhajan Singh, Prop. Sohana Timber was asked to explain the source of this cash. He submitted that he has no explanation and surrender an amount of Rs. 30,40,000/- for taxation. However, at the time of filing of the return this amount w....
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....ted 19.11.2009 and his reply in this regard has already been reproduced in para 3. Thus excess cash of Rs.27,16,001/- is added to the income of the assessee." 8. The above said finding on appeal was affirmed by the CIT (A) with the following observations:- "15. Assessee himself in his letter dated 20.03.2007 offered for addition of Rs.30,40,000/- on account of "Difference in Cash as per books and found at the time of survey. In the return of income, assessee declared Rs.3,23,999/- and suppressed income of Rs.27,16,0001/-. 16. During the assessment proceedings, the assessee tried to justify his contentions by taking various pleas - that books of accounts were not complete at the time of survey and that exact cash could not be determ....
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.... time of survey was the cash found from the premises of the assessee. The assessee failed to explain the source of cash of Rs. 33,40,950/- found during the course of survey and as he had no explanation to offer, sum of Rs. 30,40,000/- was surrendered by the assessee. The said surrender as pointed out in paras hereinabove was not on account of the total cash found but on account of the difference in cash as per the books and cash found at the time of survey. While filing the return of income the assessee reduced the said surrender on account of cash to Rs. 3,23,999/- and the plea of the assessee was that this was the surplus found after reconciliation of the books of account by the auditor. The survey was carried out at the premises of the a....
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.... for in the books of account and the assessee offered no explanation as to the source of the said cash found from his possession. However, when confronted, the assessee declared income element in the unaccounted sales, difference in stock and cash in hand as its additional income for the year under consideration over and above the income as per the books of account. The said surrender was made by the assessee in the presence of his counsel and admittedly after the documents found during the course of survey were confronted to the assessee, for which the necessary explanation was not available with the assessee. The assessee did not retract its statement though it had voluntarily offered a sum of Rs.50 lacs as additional income. Thereafter, ....