TaxTMI 
TaxTMI 
2020 (2) TMI 585
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....ade on account of unexplained investment merely on the ground that the aforesaid unexplained investment which was voluntarily accepted by the assessee later got retracted by him? (ii) Whether the ITAT was justified in deleting the addition of Rs. 28,97,500/- made on account of unexplained investment merely on the ground that the aforesaid unexplained investment which was voluntarily accepted by the assessee later got retracted by him? (iii) Whether the ITAT was justified in deleting the addition of Rs. 3,72,79,410/- by taking net profit rate on unaccounted sales even when the assessee failed to provide any documentary evidence of the corresponding expenses?" 3. The facts of the case, in brief, are that the assessee filed its return of income on 15.11.2007 for the assessment year 2007-08 declaring total income of Rs. 1,41,350/-. A survey action under Section 133A of the Act was carried out in the business premises of the assessee on 15.03.2007 wherein undisclosed income of Rs. 60.00 Lac on account of underhand transactions in purchase of land as well as excess cash was found. Such statement of one of the partner of the assessee Firm, namely, Shri Prem Kumar Agrawal was recorded....
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....ere also got verified along with the books of accounts. Thereafter, dissatisfied with that order dated 28.3.2013, the Revenue filed an appeal before the Tribunal, which was registered as ITA No.412/Ind/2013. The assessee also preferred an appeal being aggrieved by a part of the order of the CIT(A), which was numbered as ITA No.490/Ind/2013. The Tribunal vide common order dated 31.1.2018 dismissed both the appeals thereby upholding the findings of the CIT(A). Hence, the Department is in present appeal. 5. Before this Court, the appellant has restricted the challenge to the impugned order passed by the Tribunal to the extent of deletion of the amount of Rs. 23,02,500/- and Rs. 28,97,500/- made on account of unexplained investments and further deletion of Rs. 3,72,79,410/- by taking net profit rate on unaccounted sales. The submission of the learned counsel for the appellant with regard to the Substantial Question of Law Nos.(i) and (ii) is that the Tribunal should not have deleted the said additions because they were arrived at keeping in view the difference between the consideration mentioned in the sale deed and the fair market value declared by the Stamp Valuation Authority. As ....
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....uation Authority had determined the market price of this land at Rs. 42,69,500/- and Rs. 42,44,000/- respectively, resulting in the difference of Rs. 23,02,500/-. Applying the provisions of Section 50C of the Act, the addition was sought to be made. However, the provisions of Section 50C of the Act were not available to the Revenue as the assessee was the purchaser of the land. With regard to the substantial question of law No.(i) raised by the appellant, the learned Tribunal while considering the cross-appeals for the Assessment Year 2007- 08 came to hold as under:- "22. Apropos Ground No.1 of Revenue's appeal challenged the Ld. CIT(A) finding deleting the addition of Rs. 23,02,500/- unexplained investment. 23. We have heard the rival contention and perused material on record before us. We find that the Ld. AO taking the basis of the statement of one of the partner Shri Prem Kumar Agrawal in which he accepted that the investment made in the business are more than the price of the property and accordingly offered Rs. 52,00,000/- as unexplained investment. However, the statement was retracted on the very next day of completion of survey proceedings by way of filing of aff....
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....s in the appeal, the learned Tribunal observed that the Assessing Officer after making addition of Rs. 23,02,500/- on the basis of the provision under Section 50C of the Act being the difference of market value and purchase cost of the plots purchased, as discussed hereinabove, made the remaining addition at Rs. 28,97,500/- as unexplained investment in the properties. This was done on the basis of the surrender made by the partner at Rs. 52 Lac. The said amount of Rs. 23,02,500/- was subtracted from the surrender made by the partner to the tune of Rs. 52 Lac to arrive at the remaining addition of Rs. 28,97,500/-. The view taken by the learned Tribunal that the Assessing Officer had erred in making the addition of Rs. 28,97,500/- finds support from the finding arrived at while deciding the ground No.1 of the Revenue's appeal relating to unexplained investment under Section 69 in purchase of land, that the addition could not have been made without bringing any evidence on record and merely on the basis of the statement given during the course of survey which was not on oath and was retracted by all the partners by submitting an affidavit on the very next day of the survey. The r....
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....ce of evidence but it is not conclusive evidence. The veracity of such evidence can be judged vis-a-vis the material evidence and the obtaining circumstances of the case in which it was made because it can always be explained by the person who has made such confession or admission. In the present case, a perusal of the findings recorded by the Tribunal shows that the aforesaid two additions of Rs. 23,02,500/- and Rs. 28,97,500/- towards unexplained investments were made by the Assessing Officer merely on the basis of the statements given during the course of survey and that there is no incriminating material or documentary evidence available with the Assessing Officer to substantiate the said additions for the assessment year 2007-08. That apart, the retraction was immediately made on the very next day by filing an affidavit signed by all the partners. Therefore, in the given facts and circumstances of the case, the retraction cannot be said to be for extraneous reason. Thus, in our considered opinion, the substantial question of law No.(i) and (ii) raised, do not arise in the present appeal. 12. As regards the substantial question of law No.(iii) claimed by the appellant-Revenue,....