TaxTMI 
TaxTMI 
2022 (9) TMI 1136
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....ances of the case as well as law on the subject, the learned CIT(A) has erred in partly confirming the action of Assessing Officer by sustaining the addition of Rs. 6,33,339/- out of total addition of Rs. 35,00,000/- on account of alleged unaccounted business receipts. 2. It is therefore prayed that penalty levied by the Assessing Officer and confirmed by CIT(A) may please be deleted or the matter may please be set aside to the file of CIT(A). 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 3. The assessee in penalty appeal i.e. ITA No. 144/Srt/2020 (AY 2014-15) has raised following grounds of appeal: "1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer by partly sustaining the penalty on addition of Rs. 6,33,339/- out of total addition of Rs. 35,00,000/- on account of alleged unaccounted business receipts. 2. On the facts and circumstances of the case as well as law on the subject, the learned Assessing officer has erred in not specifying in the notice u/s 271(1)(c) r.w.s....
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....is year as well, she wanted to show her income around Rs. 43.00 lacs. On the basis of which the income of current year was estimated at Rs. 33,09,428/- (76,00,068-42,90,650). On the basis of such figure, the assessee offered Rs. 35.00 lacs as undisclosed income. The assessing officer noted that the assessee vide her confirmation letter dated 13.06.2014 again confirmed the discloser and payment of tax thereon. The assessing officer in para- 5, at page-4 of assessment order noted that the assessee has not shown the declared income of Rs. 35 lacks, while filing her return of income. On the basis of such discrepancies, the Assessing Officer issued show cause notice to the assessee to explain on or before 25/02/2016 but the Assessing Officer noted that till 26/2/2016, no response was made by the assessee. On the basis of aforesaid observation, the Assessing Officer made the addition of Rs. 35.00 lacs in the income of assessee and also initiated penalty under section 271(1)(c) of the Act. 6. Aggrieved by the additions made in the assessment order, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed her detailed written submissions. The submission....
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....ws & Sons Vs. CIT [263 ITR 101]. 7. The assessee further stated that she is running a pathological laboratory and the pathological tests conducted at her laboratory are very limited and the advanced level of testing are not conducted by her. Therefore, obviously, the margin as well as turnover of the assessee is restricted. During the course of survey proceedings, some loose papers reflecting professional receipts for the month of February 2014 were found and her statement was recorded under section 131(1A). In her statement, the assessee had stated that the cash book for the F.Y. 2013-14 was incomplete and only bank related entries were passed but entries of cash receipts and other cash transactions were not yet. The assessee also stated that in reply to question No.12, the assessee clearly stated that her cash book for FY 2013-14 was not complete and on the basis of the papers related to the Feb-2014, the gross receipt was estimated at Rs. 76,00,078/- In the previous year the assesse has shown gross receipt of Rs. 42,90,650/- and the gross receipt in the current assessment year is more. The assessee also furnished the total gross receipt, gross profit, net profit and net profi....
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....11. The ld. CIT(A) after considering the submissions of the assessee and material available on record granted partial relief to the assessee by taking a view that the main contention of the assessee was that during the course of survey proceedings, the loose papers were found only for one month on the basis of which the professional receipt of the entire year was estimated which was baseless and illogical without any evidence. It was contended before him that statement recorded during the course of survey proceedings has no evidentiary value and no addition can be made on the basis of such statements and that the assessee had not made a total retraction from declaration made by her and the affidavit filed was of clarificatory nature whereby, the assessee conveyed the fact that the declaration made through statement during survey proceedings was conveying her intention of declaring enhancement of gross professional receipts of the current year and the working made during survey on the of basis of receipt of one month was not correct and the assessee had filed her correct return of income. The ld. CIT(A) has held that the loose papers and incriminating papers were found only for the ....
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....39/-. And on the basis of such figure the income of the assessee for whole of the financial year was extrapolated at Rs. 76,00,078/-. On the basis of gross of income for proceeding assessment year of Rs. 42,90,650/-, the assessee wanted to declare income of Rs. 43,00,000/-, as there was difference of Rs. 33,09,428/- (76,00,078 - 42,90,650/-), the assessee disclosed round figure of Rs. 35 lacks as unaccounted receipt. The ld AR for the assessee submits that the copy of the statement recorded during the survey action is filed on record. And as per answer to the question No.12, the assessee offered Rs. 35 lacks. During the survey incrimination material only for the month of Feb-1014 was found. The books of the assessee on the date of survey was not complete. No other incrimination material was found during the survey. The estimation of survey team on ad-hock basis was just an estimation which cannot be compared with the actual receipt, the actual receipt always differs in the other months. The assessee has stated the Assessing officer has wrongly made the addition of gross amount of professional receipt on estimated basis of the entire year without appreciating the fact that only the ....
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....nth of Feb,2014, which was quantified as Rs.6,33,339/-. The method of extrapolating and estimating the gross profession receipts of Rs. 76,00,000/- for the entire year is not logical as the same cannot remain consistent all throughout the year. The ld. CIT(A) has held that he is agreed with the contention of the assessee that the actual receipt for the whole year is bound to differ from month to month and variations are possible depending on seasons, climatic changes, festivals, vacations, etc. and the gross receipts cannot be the net profit of the assessee. On comparison of the return if income for earlier years, the ld CIT(A) held that the assessee has offered substantially higher gross professional receipts of Rs.69,15,375/- as against Rs, 42,90,650/- shown in earlier year. Thus, effectively the assessee has offered additional receipts of Rs.26,24,725/- as actually earned by her against the alleged difference of Rs.33,09,438/- on the basis of extrapolation method. It was also held that the theory of extrapolation is not logical for determining the actual total Income and it is established law that the assessment should be made on the basis of only incriminating documents found d....