TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 1088
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....efly stated, the facts of the case are that survey proceedings were conducted at the business premises of the assessee on 23.09.1998, in the course of which as claimed by the department, certain incriminating documents were found and Xerox copies of the same were obtained by the survey team. That though the partner of the assessee firm Sh. Rafique Charolia in his statement recorded during the course of the survey proceedings had offered an additional income of Rs. 15 lac for A.Y. 1997-98 and Rs. 20 lac for A.Y. 1998-99, however the same was thereafter not offered for tax by the assessee firm in its returns of income filed for the said respective years. 3. That the A.O during the course of the original assessment proceedings recorded the statement of the partner Sh. Rafique Charolia (supra) on 07.02.2001, who confirmed his confession made during the course of the survey proceedings, but on the very next date, viz. 08.02.2001 the said partner retracted from his statement recorded during the course of the survey proceedings. The A.O however going by the offer of additional income by the partner in his statement recorded during the course of the survey proceedings, therein assessed t....
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.....O for framing fresh assessment had thus categorically directed that the A.O while framing the fresh assessment was not to be guided by the offer of the additional income made by the partner of the assessee firm during the course of the survey proceedings, but was to estimate the income of the assessee firm on the basis of the 'material' gathered during the course of survey proceedings, and that too after confronting the same to the assessee. The A.O in blatant violation of the principles of judicial discipline, therein acted in clear defiance of the aforesaid directions of the Tribunal and without relying upon and confronting any such 'material' as was obtained during the course of the survey proceedings, once again, solely on the basis of the statement of the partner of the assessee firm, viz. Sh. Rafique Charolia (supra), therein made an addition of Rs. 15 lac and vide his assessment order dated. 26/12/2007 assessed the income at Rs. 15,35,110/-. That the A.O while framing the assessment also initiated penalty proceedings u/s 271(1)(C) for concealment of income and tax. 5. The assessee assailed the 'fresh assessment' order before the CIT(A). The CIT(A) duly appreciating that th....
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....orized representative (for short 'A.R') of the assessee submitted that no penalty could be sustained on the basis of an addition which in itself was backed by an estimation. The Ld. A.R taking us through Para 2.1 of the order of the CIT(A), dated 29.01.2010, passed in the quantum appeal of the assessee, therein submitted that while for the statement of the partner of the assessee firm, viz. Sh. Rafique Charolia (supra) recorded during the course of the survey proceedings had wrongly been acted upon by the A.O for making an addition of Rs. 15 lac in the hands of the assessee as the same was retracted by the partner as on 08.02.2001, while for the copies of the 4 pages which were obtained by the survey officials during the course of the survey proceedings, viz. Bill No. HCS/011/98, dated. 05.07.1998, Page titled as R-105/106 and Receipt No. 868, dated. 25.08.1998, and thereafter were taken support of by the A.O for justifying the addition of Rs. 15 lac in A.Y. 1997-98 and Rs. 20 lac in A.Y. 1998-99 in the hands of the assessee, therein glaringly revealed that they were relatable to the period relevant to A.Y. 1999-2000, and did not pertain to the year under consideration. It was thus....
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....eal of the assessee came up before the Tribunal in the course of the second round of litigation, therein the Tribunal vide its order dated. 14.06.2006, while restoring the matter to the file of the A.O for framing a 'fresh assessment' had specifically issued directions on the following two counts:- (i). The A.O was directed that while framing the assessment he was not to be influenced by the declaration made by the partner of the assessee firm. (ii). The A.O was directed to estimate the income of the assessee firm on the basis of the 'material' obtained during the course of survey proceedings, and that too after confronting the same to the assessee and affording him reasonable opportunity to put forth an explanation as regards the same, so that the correct income of the assessee could be ascertained. We find that the A.O in the course of the denovo assessment proceedings knowingly acted in defiance of the directions of the Tribunal, and rather proceeded with and again framed the assessment on the basis of the statement of the partner of the assessee firm, viz. Sh. Rafique Charolia. That still further no material gathered during the course of the assessment proceedings was ever a....
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.... that though the CIT(A) finding that the 'fresh assessment' framed by the A.O was not in conformity with the directions of the Tribunal had therein set aside the additions so made by the A.O. The CIT(A) further duly appreciating that everything was not correct with the 'books of accounts' and state of affairs of the assessee firm as was projected before the department, had thus determined the income of the assessee firm on the basis of an estimation, viz. @ 8% of the gross receipts of the assessee firm, therein leading to a consequential assessment of the income of the assessee firm at Rs. 2,43,488/- which thereafter had been upheld by the Tribunal while dismissing the appeal of the department vide its order dated. 27.04.2011. We though are of the considered view that in the backdrop of the totality of the facts of the present case, the estimation of the income of the assessee firm was duly justified, but then in light of the fact that the lower authorities till date had failed to place on record any such incriminating material gathered during the course of the survey proceedings, which could establish beyond any scope of doubt the 'concealment of income' on the part of the assesse....