TaxTMI 
TaxTMI 
2019 (10) TMI 248
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.... survey u/s 133A of the Income Tax Act, 1961 (hereinafter called as 'the Act') was carried out at the business premises and assessee on 3.5.2005 by the Income Tax Officer Ward- 2, Ratlam. During the course of survey, certain books of accounts and loose papers were found and same were impounded by the survey party. It was observed that entries in the books of accounts on the date of survey was recorded till 15.1.2005. During the course of survey statement of the assessee was recorded. In the statement, the assessee offered additional income of Rs. 32,28,920/- for the year under appeal. However, while filing the return of income, the assessee declared total income of Rs. 10,63,748/- and out of the income declared during the survey of Rs. 32,48,920/-. The assessee incorporated only an income an income of Rs. 9,56,331/-. Case of the assessee was picked up scrutiny assessment and assessment u/s 143(3) of the Act was framed vide order dated 24.12.2017. While framing the assessment, the A.O. made various additions on account of unaccounted cash of Rs. 2,730/-, unaccounted investment in stock of Rs. 2,68,998/-, unaccounted investments/advances of Rs. 12,35,990/-, advances to Shri Kamlesh V....
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.... be appreciated that out of 6 items of goods, which were physically found in the business premises of the assessee during the course of survey except one item i.e. udad the assessee has taken the surplus quantity of the stock at the same figure, which were determined by the survey party. The only point of difference in the surplus stock as determined at the time of survey and determined by the appellant while furnishing the return of income is as regard to quantity of valuation of udad and that too is a solely attributable to working of books stock at two different points of time. He contended that books stock of udad as on 15.1.2005 was taken at Rs. 29,400/-. Correct books stock as on the date of survey i.e. on 3.3.2005 was of Rs. 2,96,692/-. He contended that at the time of survey, the stock of udad as per books of accounts was taken at 21.00 qtls. only of a value of Rs. 29,400/-, whereas at the time of return, the books stock of udad as on 5.3.2005 i.e. the date of survey was worked out at Rs. 213.370 qtls. on a value of Rs. 2,96,692/-. The Ld. Counsel submitted that the stock of udad as per his books of accounts completed subsequently was of Rs. 213.370 qtls. on the date of sur....
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..... It was only while filing the return of income, the assessee retracted from the statement. The case laws as relied by the Ld. Counsel for the assessee are not applicable under the facts of the present case. 5. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. Undisputedly, the books of accounts of the assessee at the time of survey on 3.3.2005 were found to be returned till 15.1.2005. It is the contention of the assessee that no opportunity to recast its trading account was given. It is further contended that the difference was due to non recording of the purchases. In fact sales of the udad has been taken into account but purchases are not considered which was recorded subsequently. It is further contended that the sales have been determined on the basis of the vouchers. We have given our thoghtful consideration to these submissions of the assessee. During the course of survey statement recorded u/s 133A of the Act would not be a strong piece of evidence. In case the assessee is in a position to reconcile the discrepancy with positive material, in that event, the A.O. should give relief to the a....
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....found and impounded. In the said book, the ledger account of various farmers and villagers to whom loan on interest basis were given by the separate entity name and style of M/s. Ramlal Birdichand Vani HUF. It is contended that HUF did not furnish return of income prior to assessment year 2004-05. The HUF is separately assessed to income tax since assessment year 2004-05. Since the document relates to the other independent entity, the authorities below were not justified in making addition at the hands of the assessee. 10. Per contra, Ld. D.R. opposed these submissions and supported the order of the Ld. CIT(A). 11. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The contention of the assessee is that the document relates to a separate entity who has filed its return of income since 2004-05. The fact that HUF namely M/s. Ramlal Birdichand Vani HUF was assessed to tax is to be verified at the end of the Assessing officer. Therefore, this issue is set aside to the file of the A.O. to decide it afresh. The ground of the assessee's appeal is allowed for statistical purposes. 12. Ground No.4 ....
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.... assessment year 2004-05 was to the extent of Rs. 4,15,000/- for which he has already revised his return by declaring additional income of Rs. 4,39,379/-. He further submitted that interest income of Rs. 1,22,019/- is also shown in the return for the assessment year 2005-06. Total additional income declared at Rs. 9,82,398/- as against total surrender of Rs. 11,81,019/-. 13. Ld. D.R. opposed these submissions. He submitted that these submissions were not made before the A.O. and the facts were not explained to the A.O. Therefore, authorities below were justified in making the addition. 14. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The contention of the assessee is that there was a peak investment which is lower. Therefore, no addition is called for. This fact requires verification and reconsideration by the A.O. We therefore, considering the fact that before the A.O., the assessee had not made such argument, we set aside this ground to the file of the A.O. to decide it afresh after considering the submissions of the assessee. The assessee's appeal is allowed for statistical purpos....
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....account by him while working out additional income. He submitted that it was duly explained to the A.O. that as on 31.3.2004, the appellant was having investment of Rs. 1,46,528/- and Rs. 6,98,340/- respectively in the business carried out under the name and style of Gordhanlal Ramlal Vani and in individual name. It was further shown that out of total investment to the extent of Rs. 6,98340/- which the appellant was having in his business carried on in the individual name, as on 31.3.2004, investment to the tent of Rs. 6,48,650/- was made in form of stock. It was further explained that out of such stock of Rs. 6,48,650/-, the appellant was having stock of worth of Rs. 6,34,720/- on the date of survey i.e. on 3.3.2005. He further submitted before the A.O. that under the provisions of the Income Tax Act, 1961, only those investments can be regarded as unexplained which have not been fully recorded in the books of account and for which an assessee fails to give any explanation and since in the instant case, out of total stock of Rs. 15,71,080/- found physically at the time of survey, the appellant had explained the investment to the extent of Rs. 6,82,244/- and, therefore, only remain....
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....rther contended that no opportunity was given to reconcile the difference in the cash. 21. On the contrary, Ld. D.R. opposed these submissions and supported the order of the authorities below. 22. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. We find that the assessee has reconciled difference by placing bank statement and cash book. There is no contrary material brought by the revenue to rebut this. Therefore, we direct the A.O. to delete this addition. This ground of the assessee's appeal is allowed. 23. Ground No.3 is general in nature needs no separate adjudication. 24. In the result, the appeal filed by the assessee in ITA No.491/Ind/2018 for the A.Y. 2005-06 is allowed for statistical purposes and the appeal filed by the assessee in ITA No.492/Ind/2018 for the A.Y. 2005-06 is partly allowed. Order was pronounced in the open court on 27.09.2019. ============= Document 1 SHRI BABULAL VANI PROP. M/S. BABULAL RAMLAL VANI 50, Laxmiganj, Jobat, Dist. Jhabua GROUNDS OF APPEAL Grounds of Income-Tax appeal before the Hon'ble Income-Tax Appellate Tribunal, Indore Bench....