TaxTMI 
TaxTMI 
2023 (4) TMI 57
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.... not considering that every assessment year is a separate and independent proceeding and for the relevant assessment year the highest of the undisclosed assets/capital/income was added by the AO which is theoretically, practically and logically correct on the part of the AO. (3) That on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not considering the fact that the assessee company failed to prove the genuineness of unaccounted liability of Rs.3,50,55,906/- . 3. Brief facts of the case are that the assessee is a Private Limited Company engaged in business. A search and seizure operation under section 132 of the Act was conducted on 07.08.2014 at the residential and business premises of Gupta Nutritions Group. The assessee-company is related to M/s. Gupta Nutritions Group of cases and was also subjected to the search. Certain incriminating material was found and seized. Notices were issued to the assessee to file return under section 153A of the Act. In response, the assessee filed the return of income under section 153A of the Act and offered undisclosed income by adopting a particular method for computation of undisclosed income....
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....ssing Officer stating that the figure of unaccounted assets /unaccounted capital/ unaccounted liability/ unaccounted sales have been given by the assessee itself and the ld. Assessing Officer has rightly adopted the highest figure as unaccounted income. 6. Per contra, ld. counsel for the assessee heavily relied on the detailed finding of the ld. CIT(Appeals) and further stated that the appellant adopted a particular method of accounting for computing undisclosed income and after giving the details of computed value of unaccounted assets, excess of unaccounted assets over unaccounted capital and gross prof it on unaccounted sales for each year, thereafter calculating cumulative effect thereof as undisclosed income of previous year was deployed in the business itself and not distributed to the members and finally the difference in cumulative value over previous year was offered for taxation. Further he submitted that the ld. Assessing Officer accepted the submission and working of the appellant for assessment years 2012-13 and 2015-16, but adopted the different method for assessment year 2013-14. He further submitted that for assessment year 2014-15 also, the ld. Assessing Officer....
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....e ld. CIT(Appeals) deleted the addition made by the ld. Assessing Officer observing as follows: - "I have carefully considered the findings of the AO and the submission of the appellant. It is a fact that a search and seizure operation u/s 132(1) of the Income-tax Act, 1961 was conducted on 07/08/2014 at the residential and business premises of Gupta Nutrition's Group of cases. Gupta family is mainly engaged in the manufacturing and sale of atta, maida, sujji, bran etc. The appellant M/s River Valley Flour Mills Pvt. Ltd. is related to Gupta Nutrition Group and also covered u/s. 132(1) of the Act. During the search certain incriminating material in the form balance sheet for the F.Y.2011-12 to 2014- 15 was found and seized. The said balance sheet contained both accounted and unaccounted transactions. Based on this incriminating document the appellant admitted undisclosed income of Rs.3,08,800/- for the year under appeal. However, during the assessment proceeding, the AO on perusal of seized balance sheet; noted that the appellant has shown unaccounted assets of Rs.3,50,62,464/-, unaccounted capital of Rs.3,08,800/-, unaccounted liability of Rs.3,50,55,906/- and unaccounted....
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....apital, liabilities or profit as contained in the balance sheet seized so as to disbelieve the claim of the appellant. In view of the detailed submission made by the appellant I find enough force in the argument of the appellant. Accordingly, I hold that the AO erred in adopting a different principle of taxing the amount of undisclosed income for the current assessment year, whereas the AO has accepted the declaration on account of undisclosed capital for earlier A.Yrs as well as other assessee's of the same group in various assessment years before him. Further, the AO has not cast any doubts on the figures shown for undisclosed balance sheet. It is well settled law that when a document found in the search/survey has to be relied upon as a whole. There is no discretion available with the Department or the assessee to rely upon a part of the document favourable to it and plead for rejection of the other part which is not favourable to it, or in respect of which no supporting material is found. In the case of S.P. Goyal v. DCIT CIT [2002] 82 ITD 85 (Mum.) (TM), it has been held that a document found in the search/survey has to be relied upon as a whole. There is no discretio....
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....d by the person by whom it purports to have been so executed or attested." The presumption available u/s 292C is not a conclusive presumption. It is a rebuttable one. It may be used against the assessee until and unless it is not rebutted by the assessee. The onus is on the assessee to rebut the presumption that the books of account or the documents found during the course of search/survey do not belong to him or are not in his hand. In the instant case the AO has not rebutted that the undisclosed assets, liabilities and capital shown in the seized balance sheet doesn't belong to the appellant. Since the appellant already declared a sum of Rs. 3,08,800/- for the relevant assessment year, I find no merit in the action of AO towards enhancing the disclosure in current year without giving any cogent reason for his action. In view of these factual finding, the AO is directed to delete the addition made of Rs.3,47,53,664/-. Accordingly, this ground is allowed". 9. From perusal of the above finding of ld. CIT(Appeals), we notice that the ld. CIT(Appeals) found error in the working of the ld. Assessing Officer adopting at different principle of taxing the amo....
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....counted capital shown by the assessee is Rs.53,49,618/- and it has also been accepted by the ld. Assessing Officer but decided to follow the different methodology for A.Y. 2013-14 since the value of unaccounted assets was higher than the unaccounted capital . 11. Hon'ble Supreme Court in the case of Radhasoami Satsang -vs. - CIT (supra) has held as follows: - "We are aware of the fact that strictly speaking res judicata does not apply to income tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where as fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year". 12. In the judgment ci ted above, Hon'ble Supreme Court has mandated the need for consistency and certainty and in case of departure from settled position, strong and compelling reason needs to be spelt out. In the instant case, we find that the ld. Assessing Officer has not raised any doubt on various fi....