TaxTMI 
TaxTMI 
2015 (1) TMI 911
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....e." 2. In this case, order U/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act) was completed by the learned Assessing Officer on 29/12/2011 at Rs. 1,39,22,987/-. The Assessing Officer observed that there was a search/seizure operation in this group on 20/10/2009. During the course of search, cash/jewellery, stock in trade, valuables, documents, books of account and/or loose papers were found and/or seized from the premises of the members of the Sodhani Sweets Group of which one such member happens to be the assessee. The assessee filed return for A.Y. 2010-11 on 27/10/2010 at total income of Rs. 1,09,99,050/-. The case was scrutinized U/s 143(3) of the Act. During the course of search, the assessee in his statement recorded on oath U/s 132(4) of the Act on 20/10/2009 admitted to an undisclosed income, which was advanced by him as loan through his relative and acquaintances. In reply to question No. 18, the assessee stated that he had no account of the amounts of loans advanced to persons which according to him was done purely on the basis of faith and confidence of his close relatives as well as friends. This fact was again admitted by the assessee in reply to....
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....0/- as undisclosed advances given through the relatives. Against this, assessee has offered Rs. 8.40 lacs as other income in Sodhani Sweets Pvt. Ltd. which was not surrendered in statements, Rs. 8,00,417/- (40,00,417 - 32,00,000) extra amount offered towards investment in construction of workshop and shop at Ajmer Road and Rs. 5,36,063/- to cover any other discrepancies. Thus, against Rs. 34,60,400/- assessee has offered an amount of Rs. 21,76,480/- (8,40,000 + 800,417 + 5,36,063) leaving a difference of Rs. 12,83,920/- (34,60,400 - 21,76,480). 4. In search no evidence is found that assessee has advanced any other amount other than those specifically mentioned in the statement through his relatives. The surrender was made to make the amount round about to Rs. 2 crores. This fact was specified in letter filed before the Addl.DIT/DDIT on 15/12/2009. In view of above facts no separate addition for Rs. 34,60,400/- or for that matter of Rs. 12,83,520/- be made in the income of the assessee....." The learned Assessing Officer considered the submissions of the assessee carefully and held that the appellant reaffirmed the fact of surrender of Rs. 34,60,000/- in his statement and also co....
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....- is claimed to have been honoured. The learned CIT has referred the contents of letter dated 27/12/2011 submitted during the course of assessment proceedings on page Nos. 3 and 4 of her order and also reproduced the finding given by the Assessing Officer in assessment order. She held that the learned Assessing Officer only made addition of Rs. 29,23,937/- as advance to relative surrendered but not disclosed in the return. The learned Assessing Officer finalized the assessment without giving any finding with respect to short disclosure of cash to the extent of Rs. 76,76,080/-. The learned Assessing Officer finalized the assessment without giving any comment on the reply of the assessee, quoted in the assessment order, thus leaving it vague whether Rs. 76,76,080 had been overlooked to be added or had been omitted to be added back after proper application of mind. Therefore, it has been held that the Assessing Officer's order dated 29/12/2011 is erroneous and prejudicial to the interest of the revenue because, surrender on account of the undisclosed cash to the extent of Rs. 76,76,080/- was not disclosed in the return and was not added to the income in the assessment order dated 29/1....
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....any even if Rs. 83,86,096 is accepted as part of sales (of Rs. 10,90,46,258 as per P&L account), then the point to take cognizance of is that the company has offered only 6.43% of sales of Rs. 10,90,46,258 (as per P&L account of the company) as net profit for taxation, which means only 6.43% of so called sales declared of Rs. 53,18,872 + Rs. 8,40,000 has been offered for taxation. That means only Rs. 3,96,015 (Rs. 61,58,872/6.43%) has been offered for taxation in the return of the company. Here most important point to mention is that during search in the statement recorded u/s 132(4) on 20/10/2009 in response to question 16, the assessee stated that cash in hand of the company (even if all sales and expenses not posted in books are taken into account), then too cash in hand of M/s Sodhani Sweets P Ltd. will come to Rs. 6,44,200 only. The assessee confirmed in reply to question 17 that the amount of Rs. 98,39,600 is related to him and is not entered in regular books of accounts of the company and surrendered this amount willingly for taxation. The contention that cash balance as on 20/10/2009 in the cash book of the company is Rs. 83,86,096/- is only an afterthought and also an eyew....
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....ls sweets, is not explained. She further relied upon the decisions in the case of Chuharmal V. CIT (1988) 172 ITR 250 (SC) and Surjeet Singh Chhabra Vs. Union of India 1997 (89) ELT 646 (SC) and held that the order passed by the learned Assessing Officer is erroneous and prejudicial to the interest of the revenue. 4. Now the assessee is in appeal before us. The learned AR for the assessee supported the order of the Assessing Officer and reiterated the arguments submitted before the learned CIT. He further submitted that from the facts stated, it can be noted that immediately after search, assessee vide letter dated 01/12/2009 to DDIT (Inv.3) intimated the position of cash as per books as on the date of search. Thereafter, in course of assessment proceedings, assessee explained the position of cash availability as per the books of accounts vide letter dated 24/11/2011 and 27/11/2011 according to which the cash availability as per the books of accounts on the date of search worked out at Rs. 83,86,096/- after incorporating the cash sales and the cash payment not recorded in the books. The cash receipt and the cash payment was further supported by the detailed working of date wise ca....