AI Drafter 
TaxTMI 
TaxTMI 
2019 (4) TMI 88
X X X X Extracts X X X X
X X X X Extracts X X X X
....on the facts and in the circumstances of the case, Ld. CIT (A) has erred in deleting the addition of Rs. 19,70,923/- for disallowance of set off of above expenses in view of section 115BBE of act and ignoring the findings in assessment order. 3. Thaqt the appellant craves right to add, delete and alter any of the grounds". 3. Briefly stated the facts as culled out from the records are that the assessee filed his return of income for Assessment Year 2013- 14 on 21.9.2013 declaring total income at Rs. 1,91,64,270/-. A survey action u/s 133A of the Act was conducted on 15.06.2012 in the premises of BCM Health Island and M/s. Totall Diabetes Hormone Institute of the assessee. During survey Shri Sunil Jain, Director of the assessee admitted undisclosed income of Rs. 4,41,88,232/- in hands of M/s. DTHRI Health Care Pvt.Ltd for A.Y. 2013-14 on account of out of books income from health camp receipts and expenses. Proceedings u/s 147 of the Act were initiated by issuing notice u/s 148 of the Act dated 15.2.2016 duly served upon the assessee after recording reason of satisfaction for reopening the case that income has escaped assessment within the meaning of section 147/148. Dur....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... deleted the impugned addition of Rs. 2,30,53,039/- observing as follows; 5. Ground Nos.3 to 6:- These grounds of the appellant are being taken up first as these go to the root of the dispute, All the above grounds of the appellant are directed against the addition of Rs, 23053039/- The detailed facts of the case as per the assessment order are reproduced at Para No,2 above and the detailed submissions of the appellant are reproduced at Para No.3 above. 5.1 Briefly stated the facts of the case are that action u/s 133A of The Act was carried out at the premises of the appellant on 15/06/2012. During the course of survey certain loose papers were found which were identified as 81-13. As per the above papers Page Nos, 5 to 8 contained the details of receipts from organizing of Health Camp for the period relevant to A,Y. 2013-14 and these receipts were not recorded in the books of the appellant company, Page Nos. 9 to 25 and Page Nos, 26 to 29 contained the details of expenses incurred which also were not recorded in the books of accounts. During the course of survey a statement of the director Dr. Sunil Jain was recorded which has been reproduced by the AO a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt of health camp expenses 11587502 Total 44188232 5.3 Thus at the time of survey instead of reducing the amount of expenses Incurred in organizing the Health Camp, the amount of expenses were wrongly added to the Health Camp receipt which resulted in double addition of Rs. 11587502/ -. The correct amount of additional income which was required to be considered at the time of survey is Rs. 21129807/-, calculated as under:- S.No. Particular Amount (Rs.) 1 Health camp receipt 32600730 Less Expenses as actually incurred in conducting the health camp 11470923 Net amount of additional income 21129807 Therefore, the net income as earned In organizing the Health Camp was of Rs. 2112980/- only and not of Rs. 44188232/- as considered at the time of survey. 5.4 Appellant also pointed out that a letter dated 12/03/2013 was also filed before the AO and copy of the same was also forwarded to the office of the JCIT and CIT wherein the above facts were stated and the return of income was accordingly filed taking the correct income as deduced from the papers found at the time of survey. It was further explaine....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... papers and there is no other independent information or enquiry to support or disprove the contents of the papers found except for the statement of Dr. Sunil Jain Director of the appellant Company. Scrutiny of the papers s how that on the one hand the papers record the receipts which are not accounted and on the other hand the papers record the details of expenditure relatable to the receipts as recorded in the papers found The unaccounted receipts are shown to be from holding of Health Check-up Camps and the unaccounted expenditure is shown to be on account of holding of such camps. The above facts are not disputed. Appellant has therefore argued that since the receipts and expenses are both noted in the papers found only the net income should have been taken as the undisclosed income and the statement given at the time of survey was thus erroneous as it did not take in to consideration this accounting principle as Dr. Sunil Jain who was a medical professional was unaware of such technicality. 5.7 AO has however rejected the above contentions by observing that Dr. Sunil Jain was sufficiently educated and hence such mistake was not an error on his part and the amount of R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e that an admission is the best evidence that an opposing party can rely upon and though not conclusive, is decisive of the matter unless successfully withdrawn or proved erroneous. In the light of the above AO was justified in holding that statement was binding however, it is to be noted that the statement made during the course of survey was modified by way of letter filed by the appellant explaining the mistake made at the time of recording of statement in the light of the papers found at the time of survey. The statement was therefore to be read with the papers found at the time of survey. As has been discussed and which is also an admitted fact that the total receipts as per the papers found were only Rs. 32600730/- and not Rs. 44188232/-. There is no dispute about this fact and there are no other independent evidences to show that gross receipts were more than or less than Rs. 32600730/- or to show that expenses were not incurred from the gross receipts. The Supreme Court in the case of CIT Vs. Durga Prasad More 82 ITR 540 (SC) has made the following observations:- "In a case where party relied on self-serving recitals in documents It was for the party to es....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... below:- "Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him. is not, in 'the opinion of the AO, satisfactory, the amount covered by such expenditure or part. thereof, as the case may be, may be deemed to be the l71come of the assessee for such financial year. Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income". From the facts of the present case it is seen that both the receipts and expenses are not recorded in the books of accounts but these are recorded in the papers found at the time of survey. The explanation regarding the source of the expenses has been given by the appellant as being from the receipts recorded in the papers found at the time of survey. It therefore cannot be said that the appellant has failed to offer any explanation regarding the source of the expenses. AO has rejected the above explanation that the appellant faile....
X X X X Extracts X X X X
X X X X Extracts X X X X
....come under sections 68, 69, 69A, 69B, 69C & 69D of The Act. From the facts and circumstances of the present case which are already discussed above, it is seen that the impugned income has been assessed on the basis of certain papers found during the course of survey, The gross receipts and the expenses noted in the papers have been added as income and both the receipts and the income are admitted to be not recorded in the books of accounts, As has already been held above gross receipts cannot be considered as income and the income has to be arrived at by considering the details recorded in the papers found in toto, Therefore, the expenses recorded in the papers are to be first deducted from the gross receipts to arrive at the income, The deeming provisions of the various sections cited above are therefore not attracted, It has also been held that provisions of section 69C of The Act are not applicable to the fact of the case, In view of the above the provision of section 11SBBE of The Act are also not attracted in the case, The AO was therefore not justified in disallowing the claim of set-off of expenses u/s 115BBE of The Act. In view of the above discussion the addition ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ey and shown in the return of income at Rs. 21135193 / -. The detailed facts of the case as per the assessment order are reproduced at Para No.2 above and the detailed submissions of the appellant are reproduced at Para No.3 above. 6.1 As seen from the assessment order the AO has disallowed the claim of set-off by holding as under:- "Such set-off cannot be allowed as the income offered during the survey proceedings is treated as income from unexplained sources u/s 68 of The Act and deemed income u/s 69C of The Act through which unexplained expenditure has been made. Therefore even setoff these expenses against the offered income cannot be allowed u/s 115BBE. Hence an addition of Rs. 19, 70,923/ - is also being made to the total income of assessee." 6.2 A detailed discussion on the issue has already been made in Para No. 5.1 to Para No. 5.10 above while discussing the addition of Rs. 23053039/- It is worthwhile to reiterate that the addition was based on papers found at the time of survey giving details of receipts and expenses. Both the receipts and expenses were not recorded in the books of accounts. There was therefore no credit in the books of....