TaxTMI 
TaxTMI 
2014 (1) TMI 876
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.... present case is a company which is engaged in the business of builder, developers and civil contractors. A survey u/s.133A was carried out at the premises of the assessee on 23.03.2007 during the course of which statement of Shri Manoj Patel director of the assessee company was recorded. In the said statement, Shri Manoj Patel stated that the income of the assessee company for the year under consideration was estimated at Rs.1,42,00,000/- for the purpose of advance tax. He further agreed to declare total income of the assessee-company at Rs.1,57,00,000/- including additional income of Rs. 15,00,000/- on account of errors of omission and commissions found in the books of account and the transactions round recorded in the documents. In the r....
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....sessee, as it is "income" which is offered for taxation after accounting all relevant expenses of the current year. The argument that the expenses claimed were already accounted and the company was incurring losses before the date of survey is an afterthought and the director was aware of the expenses incurred before arriving at the figure of Rs.15,00,000/- declared during the survey proceedings which is in addition to the regular profit as per the books amounting to Rs.1,42,00,000/- as admitted by the director in his above referred statement given under oath on 28/03/2007. Moreover the declaration made by the assessee is on account of unaccounted work in progress, which means the assessee has made such WIP in construction outside the books....
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....e Patel recorded on 28.03.2007 as reproduced above, the A.O. noted that the director had categorically stated that income for A.Y. 2007-2008 is Rs.1,57,00,000/- which (statement having been recorded on 28.03.2009) was surrendered after consideration of the errors and omission and commission pertaining to the books of account and thus, the profit declared amounting to Rs.1,42,00,000/- was arrived at after accounting all the expenses which remained to be entered on the date of survey in addition to profit of Rs.15,00,000/- determined for advance tax payment on 15.03.2007. Accordingly the A.O. was of the opinion that the expenses accounted after the date of survey are not allowable since "income" which has been offered for taxation is net i.e.....
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.... deduction. Further any claim of such deduction against the net income offered by the appellant by way of statement on oath by the director amounts to retraction from statement which is not permissible as per law in view of the following judgments. (i) Video Master Vs. JCIT, 93 ITD 102 (Mum.) (ii) Rameshchandra & Co. Vs. CIT, 35 Taxman 153(Bom) (iii) Hiralal Mayalal & Co. Vs. DCIT, 96 ITD 113 (Mumbai ITAT) (iv) Param Anand Builders Vs. ITO, 59 ITD 29 (Mumbai ITAT) Further on perusal of the break up of expenses produced, which is claimed after survey shows that the major expenditure is on account of interest to others. The loans on which this provision has been made are given by the family members and accordingly in my opinion....
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.....2007. A copy of Profit & Loss Account of the assessee for the year under consideration is placed at page no. 72 of the paper-book which shows that the income of Rs.15,00,000/- surrendered by the assessee during the course of separately declared as income and the entire routine expenses including the expenses in question incurred during the post survey period were debited the profit and loss account. In our opinion, all these facts and figures appearing in the relevant financial statements clearly show that the amount expenses of Rs. 8,17,7462/- were claimed by the assessee as regular business expenses incurred during the post survey period against regular business income which resulted in reduction of its regular business income which was ....