TaxTMI 
TaxTMI 
2013 (8) TMI 706
X X X X Extracts X X X X
X X X X Extracts X X X X
....he course of survey proceedings vide letter Annexure A-1, there was surrender of an amount of Rs.6.00 lacs. Later on, the said amount was disclosed by the assessee by crediting it in profit and loss account vide Annexure A-2. Return of income was filed by the assessee declaring an income of Rs.87,997/-. Scrutiny proceedings which were initiated by way of issuance of notices under Sections 143(2) and 142(1) of the 1961 Act culminated in assessment at an amount of Rs.29,93,210/- vide order dated 30.12.2009 (Annexure A-4) . Aggrieved by this assessment order, challenge to the same was made before the Commissioner of Income Tax (Appeals), Karnal. Accepting some of the pleas of the appellant- assessee, his appeal was partly allowed vide order dated 28.3.2011 (Annexure A-6). This order was unsuccessfully challenged by the assessee as also by the revenue. Order of the Income Tax Appellate Tribunal is of 28.9.2011 (Annexure A-8) vide which the appeal was dismissed while appeal of the assessee was partly allowed. The present Income Tax Appeal has been preferred by the assessee raising the following questions of law:- Questions of law proposed by the Assessee: "1. Whether under the facts....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aisal of rival claims - discussion follows: When rival claims of the parties are examined on the canvass of stark facts, it is found that the assessee during survey operations had declared an additional income of Rs.6.00 lacs over and above his normal profits. During the survey, certain books of accounts and other documents of the assessee were also impounded. It was revealed that the assessee had not been maintaining books of accounts. It had also not accounted for the incriminating documents. Sequelly, correctness and genuineness of the books of accounts of the assessee had rightly come under a question-mark. When no regular books of accounts e.g. cash book, ledger etc. had been produced by the assessee on the date of survey, it is evident that these books were prepared later on so as to derive credit from concealed income and were product of an afterthought. Invoking provisions of Section 145(3) of the Act, the Assessing Officer had come to a firm finding that no reliance could be placed on the entries in the said books of accounts of the assessee. Many defects were noticed and pointed out in such books of accounts of the assessee and as such actual gross profits could not be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee had deposited Rs.10.30 lacs in cash, as per details given hereunder:- Sr. No. Date of deposit Amount (Rs.) 1 20.03.2007 3,00,000/- 2 23.03.2007 1,30,000/- 3 26.03.2007 1,00,000/- 4 16.03.2007 5,00,000/- Plea of the assessee on this count was that entries from No.1 to 3 pertained to surrendered income, whereas entry No.4 showed cash received from a trader for consignment sent on 15.3.2007. When called upon to explain, the assessee could not furnish any acceptable explanation as to how the cash shown in the table as above, was generated. It was explained by the assessee that receipt of Rs.5.00 lacs on 16.3.2007 was on account of advance taken from a trader for whom goods had been consigned for sale. Sequelly, cash to the tune of Rs.5.30 lacs remaining unexplained was taken as income from undisclosed source under Section 68 of the Act and was added to the income account of the assessee. From the incriminating documents impounded during the course of survey, certain bills were found in cash purchase exceeding Rs.20,000/- but those had not been shown by the assessee in its books of accounts, details thereof are as under:- Sr. No. Nature of payment Payment made ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lation of books of accounts. At the time of survey, books of accounts had not been found to have been written and these were prepared later on. Commissioner of Income Tax (Appeals) had been constrained to observe in para 1.10 of its order as follows:- "1.10. In view of the facts discussed above, the only inference which can be drawn is that the entire exercise was carried out just to set off the additional income declared during survey. Taking the enitrety of facts in consideration, the loss declared on sale of opening stock of rice is held to be non genuine and hence is disallowed." Again speaking about ingenuiness of books of accounts in para 3.4 of its order, the Commissioner of Income Tax (Appeals) had adversely commented against veracity of entries in the books of accounts of the assessee, in the following terms:- "3.4 As discussed above, that books of accounts of the year under consideration were not found to be written on the date of survey i.e. 19.01.2007. The accountant in the statement recorded during survey stated that no cash was available on the appellate firm. Further no surrender was made on account of unexplained cash. In view of this fact, cash introduced in the....