TaxTMI 
TaxTMI 
2015 (2) TMI 943
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.... for scrutiny by issuing notice u/s 142(1) dated 12/9/2011. During the survey, the Department impounded various documents on the basis of which the assessee has surrendered an amount of Rs. 1,21,24,500/-. Subsequently, the assessee retracted from the statement with regard to disclosure of Rs. 1,21,24,500/-. During the course of assessment proceedings, the assessee has also challenged the jurisdiction of the A.O. to frame the assessment. The A.O. observed as under:- "It is observed that the assessee has retracted the disclosure of Rs. 1,21 ,24,500/- made at the time of survey and has challenged the jurisdiction of survey u/s.133A by the I.T.O. 4( 1), Thane. The issue of jurisdiction and its legality brought out by the assessee is not tenable as the I.T.O. Thane's action is legal and proper in view of-the clause (a) of Section 133A(1). The details furnished by the assessee have been scrutinized and it is observed. that the assessee has not given any explanation regarding the entries made cash receipts from the following parties appearing in the book (Friendship) impounded in the course of survey as under :- Survey No. Guntha 141 51.50 (Vide Two agreements) 140 ....
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....per Guntha from the individuals mentioned on the particular page. To clarify on Page No.1, the total sales effected are to 4 persons and the total area sold is 4.64 Gunthas. Thus, the total cash component received out of this transaction amounts to Rs.'6.96 lacs (4.64 x Rs. 150). In all, the total area sold amounts to 80.83 Gunthas and applying the cash component appearing on this note book of Rs.l,50,000/- per guntha,' the total cash component received by me amounts to Rs.l,21,24,500/-. Q, No.ll ; In answer to Question No.7 above you have stated that regular books of accounts have been maintained by you. Please state as to whether the cash component of Rs.l,21 ,24,500/- appearing in the register is accounted for in the regular books of accounts maintained by you. Ans;- The cash entries appearing in the note book found and inventorised are not accounted for in the regular books of accounts maintained by me. This element of cash component received by me is over and above the amounts received by me by way of cheques from various customers. In all, sales have been effected to 51 persons, out of which registration of sales has been done in respect of 22 persons. As for as th....
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....at this stage also, which is added to his income shown as undisclosed income." 3. Aggrieved by the above order, the assessee approached before the ld. CIT(A). The ld. CIT(A) dealt with each and every objection of the assessee and confirmed the order of the A.O. with regard to the undisclosed income of Rs. 1,21,24,500/- after having following observation:- "As far as the first objection is concerned, it is the contention of the appellant that the statement recorded during the course of survey was not voluntary and is not supported by any documentary evidence. Had the statement was not given voluntarily and it was taken by using coercive measures by the Assessing Officer, nothing prevented the appellant in approaching the higher authorities like Addl. CIT, CIT & CCIT. The appellant could have filed a detailed letter narrating how the statement was not voluntarily recorded before the above Senior Officers which was not done by the appellant. Hence the contention that the statement recorded was not voluntary by using coercive measures cannot be accepted. 2.3.3. During the course of assessment proceedings the copy of the impounded Register "Sundaram" was given to the appellant.....
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....ant had clearly entered the dates on which the documents were registered. Below this rate @ 1.50 was worked out on the entire area sold. A specific question was asked during the course of survey itself which was related to page No. 1 in respect of sale of 4.63 gunthas to 4 persons. The Proprietor Shri Aslam Chand Khan had agreed that 1.5 in the above noting indicates the cash component of Rs. 1,50,000/- received over and above the registration charges from the above individuals. Accordingly he had disclosed Rs. 1,21,24,500/- as cash component received from 55 persons as per the impounded documents. The relevant portion are in answer to Question 10 & 11 which are reproduced as under:- Q. No. 10: During the course of Survey Action in the business premises carried out today i.e. on 16-10-2008, a note book namely true Friendship (Sundaram) which is inventorised at sr. No. 1, it is seen that there are certain entries on different dates. This note book also contains certain entries indicating receipt of cash components against the sales effected to various persons, please explain the entries appearing in the note book? Ans: The entries in the note book indicate sales made to various p....
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....financial year 2008-09. This will be over and above the normal business profits that will be shown by me as at the end of the financial year. I also promise to pay the Advance Tax due on the additional income offered by me on the appropriate dates." 2.3.4 The submission of the appellant that the notings in the Sundaram Register was the expected price which might be received from the sale of specified plots from the prospective buyers and the dates from the probable date of transactions. This contention of the appellant is not acceptable for the following reasons:- (1) In the front page of the Register, the following has been noted by the appellant: "A.K. DEVELOPERS Palhar Village, Vasai Phata, Western Express Highway, Vasai (E), Dist. Thane PARTY PAYMENT RECEIVED (Cheque + Cash payment) This noting clearly indicates that the payments have already been received, otherwise the heading should be "PARTY PAYMENT RECEIVABLE/PROJECTIONS" had it been really a projection which is not the case. ((2) As mentioned in the above para 2.3.3., in page No. 3 and 4 the date of registration is mentioned as 9-06-2008 and 9-7-2008. In page 4 the first column in the page indic....
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....lothe the statements on affidavit with truthfulness and reliability. 3) Garibdas Chandrika Prasad vs. CIT (MP) 230 ITR 771 Affidavit filed by a partner of firm much after the search, contradicting his own statement recorded on oath during the course of search is an afterthought to cover up the undisclosed income and hence the contents of affidavit rightly rejected by the Assessing Officer. 4) Technical Glass Industries vs. CIT (All) 281 ITR 61 Chowkchand Balabux vs. CIT (Assam) 41 ITR 465 Assessee filed affidavit from some creditors - But failed to produce them before the Assessing Officer - Assessee failed to prove the genuineness of the affidavit and the averments made therein - Affidavits rightly rejected. 5) Munilal Ramdayal vs. ITO & Ors. (Ori) 76 ITR 151 Reasons for reopening of assessment - Affidavit of assessee's representative that the item was brought to the notice of the then ITO is self-servicing statement - unless it is corroborated by intrinsic or extrinsic evidence - Hence claim cannot be accepted. In view of the above discussion, I conclude that mere retraction of the statement by filing the affidavit is not an acceptable evidence in the eyes of law. Th....
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.... assessment when income is returned under an erroneous or misconception of law. it is always open to assessee to demonstrate and satisfy the authority concerned that a particular income is not taxable in his hands and it was returned under an erroneous impression of law. (4) The ITAT Bangalore Bench in the case of Carpenters Classics (Exim) (P.) Ltd. Vs OCIT 108 ITO 142 has held that, "Since the assessee had not taken any step to rectify its declaration before the authorities below before whom such declaration was made, there was no valid reason for retraction of the same after about a gap of two and half months in block assessment proceedings." (5) The ratio was laid down by the Hon.Punjab & Haryana High Court in the case of Surendra Kumar Charanjeet Kumar Singh vs. CIT 282 ITR 78 squarely applies to the facts of this case. The appellant surrendered certain sum during the survey u/s.133A of the I.T. Act. The adoption of gross profit rate based on the survey was justified by the ITAT. The onus in such cases falls on the assessee and not on the revenue to substantiate its claim. (6) It is worth to mention here that the decision of Punjab & Haryana High Court in the case of ....
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....the above discussion, the claim of the appellant that the statement recorded during the course of survey is invalid, cannot be accepted. 2.3.8. The next objection is that the cash component was not recorded in the regular books of accounts. In this regard I would like to point out the discussion in para 2.3.3 to 2.3.6 where it has been proved beyond doubt that cash was received by the appellant. Further in the statement itself the proprietor admitted to collecting the cash which is not accounted. Hence where is the question of accounting the same in the regular books.. 2.3.9. The appellant had furnished the copies of reply filed by the buyers of the plot in response to notice issued u/s.133(6) and the statement recorded by the Assessing Officer in few cases u/s.131 of the Income Tax Act along with the submission. I have perused the same. The Assessing Officer had deviced a standard format calling for the details. A sample of notice u/s.133(6) issued to Shri Mukesh 0 Patel is as under- "You are hereby required to furnish the following information duly verified regarding the transactions as reflected in your Books of Accounts for A.Y.2009-10 i.e. F.Y.200B-09: 1. Nature of tr....
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....survey. I have also given a clear finding in the above para that the impounded book contain the details of actual sale and on money received and they are not projections as alleged by the appellant.. During the course of hearing the AR was specifically directed to file documentary evidence such as copy of the deed of cancellation and proof to show that the amount collected was returned back to the concerned parties. It was informed by the AR that there was no agreement entered into with these 14 parties for getting it cancelled, but the advance taken was simply returned. He was not able to furnish any documentary proof regarding the cancellation. This submission of the Authorized Representative was noted by me in the order sheet. The alleged cancellation in respect of these 14 parties by the appellant is clearly an afterthought because no evidence to this effect was found during the course of survey. It was an event alleged to have occurred after the survey but without any documentary evidence. Hence the contention of the appellant is not tenable. In view of the detailed discussuion above the action of the A.O. in adding Rs. 1,21,24,500/- as undisclosed income is confirmed and this....
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....registered sale and details of cancelled sale for which no amount was received. The survey team as well as the Id AD presumed that cash element for each plot was received by the appellant. The A.O. did not object the price mentioned in the registered sale deed where stamp duty as per value determined by the competent authority was paid. Thus, there was no iota of doubt that sale of plots was made at the market value of the plots in the specified area and stamp duty was paid after obtaining permission of the competent authority regarding value of the plots. Thus, there is no issue of suppression of sale price of the plots and the appellant recorded the actual price received by him in the books of account and there is no, issue of any amount of cash element received by the appellant in excess of the sale price disclosed in the books of account. If the cash element of Rs. 1,50,000/- per Guntha is added to the price of plots, the resultant figure of sale would be unbelievable and unacceptable compared to the market value of plots in that area. It clearly shows that the actual market price was disclosed by the assessee which was also acceptable to the stamp duty authorities. It establis....
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.... Act. It is pertinent to mention that the statement of the assessee was recorded on oath in the presence of assessee's authorisd representative Shri M.A. Siddiqui wherein he agreed for surrender of on money received in cash with respect to the sale of various plots of land as per the note book namely 'True Friendship (Sundaram)' which was inventorised at Sl. No. 1. Even during the course of assessment proceeding, copy of the register "True friend (Sundaram)" was given to the assessee, however, the assessee could not controvert the same. The A.O. has mentioned in his order in detail the survey number and the area in each survey which was plotted and sold on which the assesse was in receipt of 'on money'. The impounded documents clearly shows that the assessee had received Rs. 1,50,000/- per guntha by way of cash on sale of plots. The A.O. has reproduced the entries in the page No. 3 & 4 of the impounded documents in his assessment order. With respect to survey No. 141, the total area sold worked out to 10.78 and 13.69 Gunthas respectively. The assessee had also mentioned dates on which these documents were registered. A specific question was asked during the course of survey which w....