2022 (2) TMI 751

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....ion. Against the said order and findings of the ld PCIT, the assessee is in appeal before us. 3. The ld. AR submitted that during the year under consideration, survey proceedings were carried out on 30.11.2015, and during the course of the survey proceedings on the basis of certain documents and details found, it was observed that there is income of Rs. 43,00,935/- which had not been reflected and the same was accepted to be included in assessee's income. The assessee while filing the return of income duly included the said amount of Rs. 43,00,935/- in the return and paid due taxes thereon. During the course of assessment proceedings, the ld. AO has examined the issue on various aspects including the legal position as well as the factual position of the case and after complete verification of the fact the assessment order was made. 4. It was submitted that in the notice u/s 263, the ld PCIT observed that proper inquiries and verification were not made on following two issues: a) That during survey income surrendered for advances given was Rs. 43,00,935/- which included advances given out of books to two persons. It is observed that advances to two persons during thre....

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....otation of funds. The produce is being received, the same is being sold, and payments are being made to the farmers. It was on the basis of appreciation of these facts it was observed even during survey proceedings that the total advance in one of the party comes to Rs. 7,21,103/-, however to round it off the income of Rs. 8,00,000/- was taken. Similarly in the case of the other party, the said amount came to Rs. 8,13,202/- which was rounded off as Rs. 9,00,000/-. 8. It was submitted that in these facts, it was therefore not correct to say that the amount was Rs. 21,63,310/- and Rs. 16,26,405/- is the amount of advance given and it was Rs. 8,00,000/- and Rs. 9,00,000/- only which could have been estimated on the basis of these documents. This amount was also determined at the time of survey proceedings and was also verified at the time of assessment proceedings. The said amount was duly included in the return and therefore there is no error and the said order on this issue cannot be said to be erroneous or prejudicial to the interest of Revenue. 9. Similarly in relation to the other issue, the agreement for purchase of property was made at Rs. 60,00,000/- and only Rs. 36,00,0....

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.... of Rs. 16,26,405/- during the FY 2014-15 to 2015-16 which was also out of the regular books. As per the details submitted and information gathered during the course of survey, out of total amount of Rs. 21,63,310/- advanced to Shri Hemraj Jyani, the assessee surrendered Rs. 8,00,000/- in the year under consideration. The AO is directed to take necessary action as per the Income-tax Act 1961 in respect of unrecorded transactions of Rs. 5 04 720/- and Rs. 10 38 165/- in AY 2014-15 and 2015-16, respectively. (ii)/ Issue/point 2:- During the survey proceedings, an agreement for purchase of house property was found. As per this document, the assessee had purchased a house property for an amount of Rs. 60,00,000/-. A payment of Rs. 36,00,000/-was made on 27.11.2015 and the remaining payment was made on 30.04.2016. The Assessing Officer failed to verify the said information as to whether the registered deed was executed or not. The AO is directed to examine this issue after verifying necessary details and documents from the assessee." 12. We have heard the rival contentions and perused the material available on record. On perusal of statement of Shri Pawan Kumar Jain....

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....3. We therefore find that the matter relating to unrecorded advances found during the course of survey and taxability thereof has been enquired by the AO and specific queries have been raised in respect of documents found during the course of survey as part of notice u/s 142(1) dated 29.11.2018, the reply submitted by the assessee has been duly examined by the AO including the statement of the assessee recorded during the course of survey where there is clear mention about rotation of funds and how the final figures of Rs. 17 lacs has been arrived at, the findings of the survey team, the surrender made by the assessee and additional income offered in the return of income. It is therefore not a case where the AO has merely gone by the surrender made and additional income offered by the assessee in the return of income rather the AO has examined the whole gamut of documentation found during the course of survey and thereafter has accepted the additional income so offered by the assessee towards the discrepancies found during the course of survey. Thus, it cannot be said that there is failure on part of the Assessing officer to make proper enquiries and verifications which should have....

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